NYK president Hitoshi Nagasawa commemorated today’s 137th anniversary of the organization’s inception.
Celebration
It gives me great pleasure to join you in celebrating the 137th anniversary of the creation of NYK by honouring the accomplishments of our forefathers. Today, October 1, marks the founding of NYK.
The NYK Group had a record-breaking fiscal year last year, and we anticipate continued success this year. The COVID-19 pandemic has put a tremendous amount of strain on all of the employees of NYK Group, including our sailors, truck drivers, and pilots of aeroplanes. Once again, I want to thank you all for your donations.
Let me explain the status of each business.
Ocean Network Express is still doing incredibly well in the liner and logistics industry. This is because the COVID-19 stay-at-home demand and logistics bottleneck have widened the supply-demand mismatch, leading to previously unheard-of levels of freight rates since the previous year. Despite the challenges in combining the container divisions of Japan’s three major shipping lines, we have produced strong results in a short amount of time, greatly enhancing the financial performance of the NYK Group.
Following the official receipt of a business improvement order in 2018, Nippon Cargo Airlines, which conducts the air cargo transportation industry, was forced to ground all of its aircraft. However, the business has now re-instituted a company-wide safe operation system, and it is currently working successfully and making a sizable profit as a result of favourable market conditions.
One step ahead
In the logistics business, 12 years have passed since Yusen Logistics (YLK) was established through the merger of Yusen Air & Sea Service and NYK Logistics Japan, and YLK is currently demonstrating the advantages of this merger.
In the bulk shipping business, the Automotive Transportation Division has been steadily increasing its performance through its efforts to remain “one step ahead.”
The development of several LNG-fueled car carriers with an eye to the future is another example of this commitment.
The Dry Bulk Business Division has long suffered from over-investment and sluggish market conditions.
Finally, in the Energy Business Division, we are facing many challenges, including a prolonged slump in the market for very large crude oil carriers (VLCCs), soaring prices for petroleum product tankers due to the situations in Russia and Ukraine, and wild fluctuations in the market for LNG carriers.
Under such circumstances, LNG carriers and LPG tankers have been performing stably.
Struggling business
The cruise ship and travel-related businesses have been struggling due to the significant impact of COVID-19.
However, everyone involved is doing their best, and the business environment is finally improving gradually, so I hope that they will continue to work hard.
This excellent performance could not have been achieved by the sales division alone.
We have also steadily implemented measures for the next generation.
Of course, the results have yet to come in.
Still, we can look forward to commercializing such projects as the offshore wind power generation business, fully autonomous ship systems, ammonia-fueled vessels, liquefied CO2 carriers, and the use of simulator technology in the maritime industry.
Bringing value to life
We are in the final year of our medium-term plan, “Staying Ahead 2022,” and thanks in part to the improvement in the business environment, we are nearly finished with it. We are already drafting the medium-term plan that will begin in the next fiscal year. It will cover the time up to about 2030. We would aim to advance ESG management in keeping with our core principle of “Bringing value to life.” We want to include the ideas from the debate of looking ahead to the year 2050 that young executive officers had last year into the medium-term management plan.
How much we can cut greenhouse gas (GHG) emissions is the first important consideration. Currently, the NYK Group generates roughly 17 million tonnes of GHG annually. We bear a significant portion of the costs associated with these emissions, which may include carbon taxes. I think that in the future, customers and society will favour businesses that sincerely try to lower GHG emissions. Therefore, such initiatives may be a growth tactic.
The second is to make governance stronger. Decision-making that is open and comprehensive compliance checks are still essential. For the past two to three years, our team has performed remarkably effectively with no significant scandals. The evidence demonstrates how crucial it is to strengthen governance.
The third goal is to set up a framework and environment that encourages our Group staff to work with a high level of awareness and improvisation when it comes to workplace culture, gender, work styles, and human rights.
Ensuring safe operations
The basic premise of these activities is to ensure safe operations by sea, land, and air.
With the above framework, we will incorporate specific investment, profit, business, and capital policies into the new medium-term plan.
We will announce it in the spring of next year, so please pay close attention.
As reported in the news daily, our business environment is dramatically changing.
What used to be a favorable wind may lose its momentum or turn into a headwind in the future.
So, please focus on carrying out what you need to accomplish.
I’d like to end by wishing all NYK Group ships, vehicles, and aeroplanes safe operations as well as all NYK Group executives, employees, and their families a long and happy life.
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Source: NYK
