Under the revised laws, shipbuilders can get tax breaks, subsidies and low interest loans if the minister of land, infrastructure, transport and tourism approves their business plans, such as those featuring restructuring measures or investment plans aimed at improving productivity.
The government will also offer financial assistance to local shipping companies that order ships built by firms with government approved business plans.
Japanese yards, hit hard by cheaper neighbouring countries, have embarked on another big round of mergers in a bid to drive economies of scale. Japan was the largest shipbuilding nation at the start of the nation but has seen its position eroded by China and South Korea over the last 20 years.
Many yards in Japan are now at risk of closure.
“China and South Korea are gaining market share at Japan’s expense, but all three regions are struggling to secure enough new orders to utilise their yard capacity,” a report from Danish Ship Finance issued this week stated.
Two-thirds of the global orderbook is scheduled to be delivered before year-end 2022. The front-loaded nature of the orderbook is most severe in Japan, where 95% of the orderbook is scheduled to be delivered in the period, compared with 73% in China and 60% in South Korea, according to Danish Ship Finance.