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Suez Canal compensation no impact on Ever Given owner

Japan's Imabari says insurance will cover payout and that it has turned a profit

Shoei Kisen President Yukito Higaki said that negotiations over the Ever Given incident had helped "deepen relations" with Egyptian authorities.

TOKYO -- Japan's Imabari Shipbuilding, whose subsidiary owns the Ever Given container ship that got stuck in the Suez Canal earlier this year resulting in a blockage of the key shipping route, said on Monday that insurance will cover "to some extent" the compensation it has to pay out.

The company held a press conference where Yukito Higaki, president of Imabari and its affiliate Shoei Kisen, told reporters that the accident will have "no major impact" on its earnings.

Ever Given was impounded at a lake in the Suez Canal for three months, after it blocked traffic in the shipping lane for six days in March. Last week, the giant container ship set sail again after Shoei Kisen, the ship's owner, signed a compensation deal with Egyptian officials.

Higaki revealed that it took some time to reach settlement because both parties had difficulty agreeing on a price. The size of the settlement has not been disclosed but the Suez Canal Authority had claimed $550 million in compensation while Shoei Kisen had initially made a counter offer of $150 million.

The president also expressed gratitude to the Suez Canal Authority, saying: "I think this became an opportunity for us to deepen relations."

Imabari's business model is unique in that it operates both as a shipbuilder and sea transportation company. Higaki acknowledged that its business faces "various operational risks" including a contribution to "environmental pollution." However, he said the company has no intention of ending its container shipping operations despite the Suez Canal accident.

The shipping industry is rushing to find alternative fuels that can replace fossil fuels amid an acceleration in decarbonization efforts across multiple industries. LNG is seen as a key fuel that can pave the way for decarbonization. Imabari said that it plans to manufacture LNG fuel tanks as soon as possible. The company has been using products from Chinese manufacturers due to the high costs of making them.

However, with the support of the Japanese government, Imabari will switch to manufacturing those tanks. On Monday, the company also announced that revenue for the year ended March fell 2.5% to 371 billion yen ($3.3 billion). Imabari, controlled by the tight-knit Higaki family, is a private company and does not need to disclose its annual net income, but it said that it had turned profitable.

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