[Company analysis] Mitsui Engineering & Shipbuilding Co., Ltd. (三井E&Sホールディングス)

「Mitsui Engineering & Shipbuilding Co., Ltd. (三井E&Sホールディングス)」is a major heavy industry company handling aerospace / energy and plants / engines / precision machinery. Unlike「Hitachi Zōsen Corporation(日立造船)」or「IHI Corporation」 who have withdrawn from the shipbuilding business, this company is still continuing its shipbuilding business. The number of consolidated employees is approximately 13,607.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Mitsui Engineering & Shipbuilding Co., Ltd.
Company name (Japanese)	三井E&Sホールディングス
Date of establishment	Wednesday, November 14, 1917
Headquarters location	東京都中央区築地5丁目6番4号
Capital	44,385
Consolidated sales	656,504
Consolidated operating profit	(59,703)
Consolidated total assets	999,100
Consolidated capital	280,239
Capital adequacy ratio	28.0%
Consolidated number of employees	13,607

 

 

 

2. Summary and Features

 
The shipbuilding division of「Mitsui & Co., Ltd.,(三井物産)」was established in Okayama Prefecture in 1917, is the origin of the current「Mitsui E & S」. In 1937, they became independent of「Mitsui & Co.」. Compared with other heavy industry companies in Japan, they have shipbuilding departments such as LNG and FPSO which have higher sales ratio. However, they still have a wide range of business fields such as logistics systems, kinetic energy, advanced machinery, plants, environment, IT, etc.

The distinctive feature is that unlike「Hitachi Zōsen Corporation(日立造船)」or「IHI Corporation」who have already withdrawn from the shipbuilding business,「Mitsui E & S」is still continuing its shipbuilding business. In particular, demand for LNG carriers is expected to increase over the long term, so they aim to establish competitive advantages in this field. For this reason, This company even purchased the German company「TGE Marine」who is a design company for small and medium-sized gas carriers, for 22.1 billion yen.

However, as the shipbuilding industry continues to be in a recession, veteran workers are started to retire and their human resources become more and more limited. Besides,「Mitsui E & S」is also trying to abandon the in-house manufacturing because they are inferior to Chinese and Korean companies in price competitiveness. Currently, this company forged business alliance with「Tsuneishi Shipbuilding Co., Ltd.(常石造船)」, which has shipyards in the Philippines and China, where labor costs are relatively low, and is trying to enhance its price competitiveness.

In fact, in 2013,「Mitsui E & S」showed a move to implement a business alliance with「Kawasaki Heavy Industries, Ltd.(川崎重工業)」in the offshore development and LNG carrier business. Both of them have strengths in their respective business fields, and they have a complementary relationship, so it seems a feasible plan. However, at that time, the negotiation did not went well due to the pride of each other. So the plan was cancelled.

 

 

 

3. Major Business

 

■ Environment / Energy
They are working on the development of marine resources using wind and biogas, biomass power plants, and offshore oil and gas production and storage facilities (FPSO).

■ Maritime logistics and transportation
Based on shipbuilding, they provide services related to the entire global supply chain, including services such as container terminal management.

■ Social / industrial infrastructure
They are constructing social infrastructure and chemical plants such as bridges and power plants, mainly in emerging countries. In Japan, they carry out conservation projects as a measure against aging infrastructure.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		731,464	703,216	656,504
Consolidated operating profit		8,304	-           5,224	-             59,703
Consolidated total assets		1,096,735	1,029,222	999,100
Consolidated net assets		367,608	356,837	280,239
Breakdown of sales	Shipbuilding business	126,690	112,472	96,879
	Marintime development business	228,419	191,182	222,458
	Machinery business	174,847	181,733	186,935
	Engineering business	162,598	180,381	68,972
	Others	38,909	37,445	81,257