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Working Together, Let’s Make 2018 the Link to a New Era: 2018 New Year Message from President Murakami

To everyone of the “K” Line Group, I extend my very sincerest wishes for a Happy New Year. As we enter 2018, I would like to take this opportunity to reflect on the past year and offer a look forward to the challenges ahead, begins the New Year Message from Eizo Murakami President & CEO.

 At the beginning of his New Year Message for 2018, President Murakami opens with observations on the global political scene drawing attention to US President’s withdrawal from Trans-Pacific –Partnership and Paris Agreement and also the Brexit issue. On the results of the elections in Germany, France and Netherlands, he said that the “right-wing and anti-EU parties surged forward in national elections. These outcomes demonstrated just how much anti-globalization sentiment there is. How the rise of protectionism will play out is a matter of concern for the shipping industry, which engages in global logistics.”  Recalling the developments in the Middle East and North-Korea’s repeated provocations, he described the situation as geo-political instability. Despite this instability, he said that the global economy has shown gradual improvement. “With economic activity gathering steam globally, the world’s economic growth rate, which in 2016 fell to its lowest level since the Global Financial Crisis, began moving upwards last year and appears to be gaining momentum.”

K Line business is based on global logistics; naturally, the international circumstances and global economy affected their operations. In FY2016 two of their major segments Containership and Dry Bulk Business were buffeted by market downturn; however, weak tonnage supply pressure and the robust international marine cargo helped gradual recovery and the Group’s performance in the first half of FY2-17, moved successfully back into the black. He attributed the result to their large scale structural reforms; but he cautiously observed that though through the combined efforts of everyone-executives and employees alike- have finally borne fruit, it also appears that more time will be required before we see substantial recovery in the supply-and-demand balance. We must therefore continue to be prepared for tough times.”

Talking about the medium-term management plan titled “Revival for Greater Strides-Value for our Next Century” , he said the focus will be on achieving sustainable growth through rebuilding portfolio strategy. To achieve this goal,they will strengthen business and generate stable earnings. They will leverage the Group’s collective “  strength to keep focusing on our customers with proactively incorporating advanced technologies, and develop the professional and diverse human resources that will support those initiatives.”

Referring to the new containership company Ocean Network Express (ONE) which is scheduled to start its service in April of this year, this company will deliver, he said, the advantages of expansion of scale brought by the integration of Containership Business and Overseas Terminal Business by the three major Japanese shipping companies. “ ONE will be an affiliated company accounted for by the equity-method, and thus will have a different operating format. Nonetheless, Containership Business will remain a core segment of our Group, and we will continue to give it our full support.”

Even after spinning off our Containership Business, he continued, we will work to ensure that the “K” Line Group continues to grow strongly by taking advantage of our high transportation quality and customer base. To that end, our entire Group must become even more integrated and execute each of our business strategies. In each of the businesses that will become the Group’s mainstays —Dry Bulk, Car Carrier, Energy Transportation and Marine Resources Development—we will advance initiatives to expand our revenue stability and develop new business through technological innovation and business model reform. And Logistics Business will succeed the network established by containership business and appropriately meet our customers’ needs. In this way we will strive to shape a new “K” Line Group.

The year 2018 will be the final year, President Murakami concludes his message, before we celebrate our centennial. It also marks 50 years since our first full containership, the first Golden Gate Bridge, began service on the North American route, and is the 50th anniversary of the completion of our first car carrier Toyota Maru No. 1.

Compared to those days, the per-vessel carrying capacity of containerships has grown by 20 times and that of car carriers has grown six-fold. Thus, the size of our business and our business environment has changed greatly in half a century. Nevertheless, status of the shipping business as an important infrastructure that supports people’s lives and the world’s economic activities remains unchanged. With an unwavering sense of pride and responsibility in our important role for society, and so that we may fulfill this responsibility, we must maintain our mental and physical health, as stated in our “Health Declaration,” and demonstrate our strengths to the maximum degree possible.

This spring, we will take a giant step forward as a brand-new “K” Line Group. Moreover, 2018 will be the year in which we solidify our foothold in preparation for the next 100 years.

I believe that, if we steadfastly execute our respective roles and consolidate our strengths as professionals, this one year will become an important link to a new era. Let us all join together on this journey toward a new tomorrow.

In closing, as we celebrate the New Year, I wish all of you, the members of the “K” Line Group and your families, Good Health and Prosperity, and pray that all of our ships will enjoy safe passage throughout 2018.

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