1.
GV Wiaho Maru and J.P. Centaur of Monrovia under construction (3 shots)
0.10

2.
GV Workers on ship (5 shots)
0.34

3.
GV PAN Deck of ship
0.43

4.
SV Workers welding (3 shots)
0.53

5.
GV Workers placing timbers
1.02

6.
GV Ships in water at dock
1.05

7.
GV PAN FROM Barge TO oilrig
1.15

8.
GV Oil rig (4 shots)
1.38



Initials BB/1710 DSD/PN/BB/1740



Script is copyright Reuters Limited. All rights reserved

Background: Uncertain economic conditions are threatening to undermine Japan's world supremacy in shipbuilding. In recent years Japan has surged ahead of all other nations until last year it turned out five times more tonnage than its nearest competitor, Sweden.

But mush of that success was the result of Japan's production of mammoth supertankers. Japan emerged on the world's shipbuilding scene at a time when the demand for the giant tankers was developing. Japan quickly took advantage of the market conditions and developed shipyards specially designed for tanker construction.

But the soaring price of oil had a drastic impact on the demand for tankers. As prices rose, demand for oil declined. As a result there was less need for the tankers and Japan found itself with the capacity to build more tankers than the world needed. The reopening of the Suez Canal also reduced the demand for the giant ocean tankers.

But Japan's shipyards aren't idle. Some have tried to fill the gap with construction of other vessels such as oil rigs and smaller ships, but their production is less profitable in a yard specifically designed for other kinds of construction.

The shipyards are still building some supertankers, too, but those were already contracted and will in many cases by under construction until 1977. But lase May 318 tankers were lying idle around the world so the prospect for the new vessels is bleak.

Recently, Japan built the largest tanker in the world, the Nissei Maru with a deadweight of 484,337 tonnes, but it has been idle since its commissioning in late May. Plane now call for it make its maiden voyage in early August.

Yasushi Ichikawa, who directs operation at two of the Mitsubishi shipbuilding yards, is trying to guide his company into greater diversification in shipbuilding in order to reduce dependence on the heavy tanker business. Part of his programme also involves tightening the company's shipbuilding budget by eliminating overtime work and not hiring new workers to fill vacancies resulting from attrition. He says the company is also considering ways of shifting workers into other areas of Mitsubishi's corporate structure.

Shipbuilders have also appealed to the Government for help, especially with improved credit terms.