President Akimitsu Ashida's Speech
on the Anniversary of MOL's Founding

April 01, 2008

On the occasion of Mitsui O.S.K. Lines (MOL) 124th anniversary, we are pleased to bring you a message from our President, Akimitsu Ashida.

Becoming a More Appealing Company

Brasil Maru Launched

Let me express my best wishes to all the MOL Group employees on the occasion of MOL's 124th anniversary.

This year also marks the centennial of Japanese emigration to Brazil, which has a historically strong relationship with our company. The third-generation Brasil Maru, launched as a very large iron ore carrier for Nippon Steel Corporation, succeeds a name rich in legend, engraved in the brilliant history of our predecessor Osaka Shosen Kaisha. The Brasil Maru returned safely to Oita Port in Japan on March 8 after its maiden voyage. Looking back at the achievements of the original - opening the world's first around-the-world route via South America in 1918, which served as the foundations for our growth - we can gain wonderful lessons even now as our company sets the stage for growth in a global market.

Our Group's business performance for fiscal 2007, the first year of the three-year midterm management plan MOL ADVANCE, is expected to reach an all-time record high - consolidated revenue will be 1,900 billion yen and consolidated ordinary income will reach the 300 billion yen level, surpassing the initial forecast by a considerable margin, thanks to our efforts to seize opportunities in the sharply rising dry bulk market. We expect consolidated ordinary income to place our company among the top 30 listed enterprises in Japan. I want to congratulate everyone in MOL and the MOL Group on this strong performance and express my sincere appreciation for your hard work, which was the driving force behind our success.

Increasing our appeal to all stakeholders

Thus, for four consecutive years through 2007, our robust performance always ranked our company in the top 40 listed companies in Japan. And, we can expect high-level performance this year as well. Our success has put the company in the spotlight, and we have attracted many applicants among new graduates. But this is no time to let up. The company is expected to continually increase its value, and that is the fate of a listed company. Today, I want to discuss my thoughts about what we should do to increase our corporate value, in other words, make our company even more appealing to all stakeholders. The MOL Group must respect and cooperate with stakeholders such as shareholders, customers, employees, communities, and business partners. First, we need to think about what really makes us attractive to these stakeholders, as we strive to be an ever more appealing company.

The strongest blade of grass becomes visible in a strong wind

Appealing to shareholders who invest in our company means increasing the value of their investment. As a listed company, we should seriously consider the assessment of shareholders who measure our success with higher stock prices, and reward them with increasing dividends that reflect our improved business performance. Though fiscal 2008 may see factors that decrease our profits -- such as the appreciating yen and high bunker prices - we expect to post around 300 billion yen in consolidated ordinary income, which is the same as the previous year. We plan to accomplish this growth by launching newly built vessels and stepping up our cost reduction efforts. There is a proverb "The strongest blade of grass becomes visible in a strong wind."(*) We can show our true strength as a company by soundly boosting our profits even when the winds turn against our business. And I think our strength will lead to even stronger trust from shareholders and investors. What's more, we can establish a rock-solid corporate base that will be largely immune to business downturns by increasing our equity capital to 1 trillion yen in 2010, from the approximately 700 billion yen today.

Consolidated results including group companies are critical in assessment of corporate value by investors. The contribution of our group companies is approximately 65 billion yen on an ordinary income basis, and we can say that their structure, including those of equity method companies is gaining considerable strength. But as we work to become a more attractive company to shareholders, we need to increase business efficiency in management as a group and produce strong group-wide results.

* Houhan Shu (History of the Later Han Dynasty)

Meeting customer needs

Another critical element is ensuring top-quality customer satisfaction so our customers will see the value in our services and pay a fair price. If customers are not willing to pay what we expect, then we must look at whether our services are in line with what they are really demanding. We think our company must offer services that precisely meet customer needs and we treasure customers who recognize the value in those services.

The Brasil Maru, as I said earlier, was built to meet customer needs - the desire for efficient transport by a 300,000MT DWT class large-scale vessel - and we plan to build five more of the same size carriers ahead of our competitors. We are also expanding our fleet of car carriers, product tankers, and very large liquefied petroleum gas (LPG) carriers, taking advantage of customer needs as they change in response to cargo volume and trade patterns. We continue our competitive fleet expansion to establish a portfolio of vessels that can flexibly meet customers' various short-term, mid-term, and long-term transport needs.

Our percentage of overseas customers has increased along with globalization of the ocean shipping industry, which is our core business, and has already surpassed domestic customers. When proposing a transport solution to overseas customers, each of whose cultures and customs are different, we need to tailor our services to their specific needs and expectations. If we plan out a service that takes such customer needs into account in advance and then follow through, our service will be an attractive solution and we will be well on our way toward making our company more appealing.

Creating a sense of energy by taking on new challenges

If the company is to be appealing to employees, it must address salary and compensation issues with an approach worthy of its business scale and accomplishments. Employees are critical asset for the company, and I don't consider them a "cost." It is the most important for employees that a company provides a workplace where employees feel challenging and rewarded and can do dynamic and challenging work. The global market, the focus of our group activities, continues to grow, and we must be ready for anything there. I hope each of us will push forward to become an unparalleled professional, never lose sight of global competition at each of our post, constantly seek to improve, produce results, and find value in our work. Our company has already recruited over 80 people as mid-career employees since 2001. About 30% of our new employees are women, and they are taking larger roles and more responsibility. I believe the company is changing to become a more challenging, more rewarding company even for employees, by recruiting and promoting capable, highly motivated people regardless of age, sex, and nationality.

People make the company. The appeal of a company also reflects the executive officers, general managers, and other leaders, who are its public face. That means our management must appeal to employees as well as the public. I ask all of our management to make every effort to create a corporate culture that helps the staff to grow and improve by clearly stating business strategies and policies, and by proactively transferring authority to them. A leader who appeals to employees also appeals to customers. Employees must also always think what they would do if they were in their superior's position. They must take the initiative in bringing up issues with their superiors and frankly discussing problems without hesitation. This will fuel a dynamism and sense of energy throughout the company.

Fulfilling social responsibilities

Our appeal to the community, society, and the world is expressed in the value provided by the ocean shipping industry in leading global cargo transportation and promoting worldwide economic growth. To contribute to sustainable growth as a multi-modal transport corporate group, we need to thoroughly reinforce our operating safety, which is the basis both our business activities and environmental protection. However, we must always bear uppermost in mind that even if we set lofty goals, we jeopardize the trust of society if we allow a single serious incident to result from inattention to the basics of safe operation. This type of inattention is most likely complacency in daily operations.

To business partners, such as shipowners and shipyards, what is the appeal of our company? Naturally, seeking lower prices from our partners to enhance our competitiveness will not make us more appealing to them. But only a company that offers opportunities for growth and expansion along with its partners, by growing itself, will be become a truly appealing company from a long-term standpoint. A one-way relationship is not the way to ensure ongoing growth for both partners. I hope that we can always keep good partnerships in which we can continue to improve by learning from each other, so we can be winners as innovative companies in the competitive global marketplace.

Revitalizing the containership business

Up to this point, I have talked about the MOL Group from the viewpoint of each stakeholder. Our most urgent task to increase our appeal is the revitalizing of our containership business, which is now facing a crucial moment in its turnaround. We presented the Board of Directors with a restructuring plan to achieve 50 billion yen in consolidated profits for the containership business by 2010. I think we will be more attractive to the financial community if we can achieve that goal.

In the classics that have survived human history, there is universal wisdom that applies even today in the advanced corporate management. In the Analects of Confucius, there is a phrase "The Master said, 'If I meet a wise man, I will follow him. If I meet an unwise man, I will see myself reflected in him.'" This is exactly the way corporate management should be, proactively introducing other companies' strengths in a quest for best practices while benchmarking our company's current position. To increase our appeal as a company, it is important to improve ourselves by reinforcing our strong points and improving our weak points. We dedicate ourselves to "flexible management" that changes strategies matching an ever-changing business environment. With a combination of freewheeling thinking and flexible responses we always set our antenna to read environmental changes, never miss vital information, and take decisive, appropriate action.

And as we set forth in the corporate principles, we will promote "an open and visible management style that is guided by the highest ethical and social standards." In other words, we will ensure full compliance with laws, regulations, treaties, and so on. As part of corporate governance, we must work hard to implement an internal control system that goes into full operation this year.

Finally, I pray for the safety of all of our Group vessels, and hope that fiscal year 2008 will be a healthy, happy, and prosperous one for everyone in the MOL Group around the world.