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Fuel costs force ferry company into bankruptcy

Date Posted: 2008-05-30

Rising prices for oil have stripped a local ferry operator of its cash, leaving the company without a viable business plan and sending it into bankruptcy and possible liquididation.

Arimura Industries, which has operated two passenger ferries and one cargo ferry, will cease operations June 8th. The company had operated under bankruptcy protection for some time and tried to work a rehabilitation plan, but was turned down by court administrators. Law administrator Hideki Matsushima said “we couldn’t imagine oil costs going so much higher, so its much better to go into bankruptcy than making a new plan.”

Attorney Matsushima says “bankruptcy trustees will transfer the business.” Arimura has already found a buyer for its cargo ship, and sales paperwork is under way. Company officials say the two passenger ships will sit idle until they raise enough cash to purchase fuel for operations. Arimura says its more than 120 workers will remain on the payroll until the ships are able to again operate.

The passenger ferries have operated between mainland Nagoya, Osaka, Naha, Miyako, Ishigaki and Taiwan since 1995, carrying passengers, foods, precision instruments and clothing. Arimura says more than 20,000 passengers ride its ferries each year. The cargo ferry has been operating at 100% occupancy between Taiwan, Ishigaki and Naha.

Fuel vendors have refused to sell to Arimura until it comes up with money to pay for it. Meanwhile, businesses—including import-export vendors—say they don’t know what they’ll do. Several importers dealing in clothes, as well as sundry goods trading companies, say they’ll just go out of business because they can’t get goods from Taiwan. Ishigaki and Miyako mayors and local politicians are asking Okinawa Prefecture, the national government, and even Taiwan for support to Arimura.

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