Japan Launches 1 Trillion Yen Plan to Double Shipbuilding Output

Japan launched an ambitious plan with five pillars and an estimated investment of 1 trillion yen to double its shipbuilding output by 2035. The country's goal, after years of losing ground to China and seeing its capacity shrink, is to revive an industry that was once a global powerhouse, through the reopening of shipyards and investment in workforce and innovation.

The concrete goal is to raise Japan's annual shipbuilding capacity to 18 million gross tons by 2035, according to Yukito Higaki, chairman of the Japan Ship Exporters' Association (JSA) and head of Imabari Shipbuilding, at a press conference held on December 18, 2025. Higaki stated that, in addition to capital investment to boost efficiency at each shipyard, it will be key to deepen cooperation among domestic shipyards through flexible alliances, rather than relying solely on capacity expansion.

The plan relies on a shipbuilding support fund of approximately 350 billion yen over ten years, of which Japan's supplementary budget for fiscal year 2025 allocated 120 billion yen for its first three years. In total, the capacity expansion program would require close to 1 trillion yen, made up of 350 billion yen contributed by the shipbuilding industry itself, another 350 billion yen from the new fund, and 300 billion yen from existing state support mechanisms. Higaki warned that, if capacity proves insufficient, Japanese shipowners could be forced to place more newbuilding orders at foreign shipyards.

According to the latest data, public and private investments of 900 billion yen have already been committed, earmarked among other things for the addition of large cranes and the restoration of a dry dock damaged by an earthquake. Imabari Shipbuilding, Japan's largest shipbuilder, plans to install jib cranes and robots to boost its steel plate welding capacity at its Marugame headquarters and its Saijo shipyard, after receiving a 113.8 billion yen subsidy from the Ministry of Transport, the largest allocation to date, with a total group investment of close to 300 billion yen. Hakodate Dock, in Hokkaido, is seeking to restore its No. 4 dry dock, rendered unusable by a 1993 earthquake, in order to resume shipbuilding by 2032 and more than double its output of small bulk carriers from around five vessels in 2024; together with its parent company Namura Shipbuilding, in Imari, Saga Prefecture, they plan to invest up to 150 billion yen over the next decade, including 49.9 billion yen in state support. Kawasaki Heavy Industries, which will receive 15.6 billion yen in subsidies, is moving forward with the digitalization of its Sakaide plant using robots equipped with artificial intelligence, while Oshima Shipbuilding will install a crane and upgrade buildings at its Koyagi plant in Nagasaki to raise its bulk carrier output to around 10 vessels by 2031, 2.5 times the current level.

The Japanese government designated shipbuilding as one of 17 strategic fields for intensive investment, in an effort to strengthen competitiveness against China and South Korea. However, rising costs for production equipment such as cranes raise doubts about whether the investment plans can be carried out as originally projected; an industry executive noted that, while they value the government's support, the cash outlay is considerable and the plans must be examined carefully.