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Message from President and CEO on MOL Foundation Day
April 01, 2024
We are pleased to bring you a message from Mitsui O.S.K. Lines, Ltd. (MOL) President & CEO Takeshi Hashimoto on MOL Foundation Day.
140th Anniversary of the Founding: Meeting the Challenge of a New Era
This year marks the 140th anniversary of the founding of Osaka Shosen Kaisha (OSK Line), one of our corporate roots, in May 1884. Since then, we have overcome numerous changes and turmoil in world affairs and major economic crises, while contributing to the development of the Japanese and global economies through ocean transport and achieving significant growth as a corporate group. Today's MOL Group is built on a history of ingenuity and efforts by our predecessors, who created numerous ship innovations and continually refined our safety and quality, as well as our operations. The driving force behind this is a strong sense of mission and an insatiable spirit of challenge as a key industry that has been passed down from generation to generation. Based on the spirit that we have nurtured for 140 years, today marks the beginning of a new chapter in our history and ever-evolving challenges for our group.
As I mentioned in my New Year's address, the situation surrounding our business is becoming more complex every day due to turmoil in world affairs, global economic trends, and the deterioration of the global environment. Several factors could have a significant impact on the business environment this year, including the U.S. presidential election scheduled for November, further tensions in U.S.-China relations, and a slowdown in the Chinese economy. Although the business environment remains challenging, we will continually follow our Corporate Mission to realize our group vision, working unwaveringly on our initiatives to promote global economic growth and the resolution of environmental issues and other social concerns as a social infrastructure company with its origins in the ocean.
'BLUE ACTION 2035' Review of FY2023
One year ago, we launched our management plan, "BLUE ACTION 2035," in which we set forth our group vision for 2035. To achieve this vision, we have embarked on reforms of our business portfolio and established an investment plan of 1.2 trillion yen for the first three years. In the last fiscal year, we proactively pursued investments in the energy business, mainly environmental investments, and in the real property business, which is expected to generate stable earnings, and were able to accumulate investment projects at a pace that exceeded our initial plan. We continued ordering new LNG carriers, acquired chemical tanker company Fairfield Chemical Carriers, invested in MODEC, Inc., formed a capital alliance with Japan's largest wind power generation maintenance company Hokutaku Co., Ltd., joined a redevelopment project in Sapporo by DAIBIRU CORPORATION, acquired the Toranomon Mitsui Building in anticipation of future redevelopment of our Head Office building. Furthermore, we made investments that set the stage for further growth and future business portfolio reforms. The group also set forth a "regional strategy" starting in 2021, and pursued the development of new businesses overseas, but attractive investment projects have been emerging from various regions since last fiscal year and we have already committed to several projects. In February of this year, our Europe-Africa organization took the lead and have been selected as the preferred shipowner to time charter out a Floating Storage and Regasification Unit (FSRU) for the planned LNG import terminal that is developed by GAZ-SYSTEM S.A. in Poland. New investment projects led by various regional organizations are under consideration for this fiscal year, and we are confident they will lead to future growth.
Speaking of business performance, in the last fiscal year not only were we able to enjoy the effects of the yen's depreciation, but our stable revenue business performed as planned and our chemical tanker and car carrier businesses were able to catch the wave of favorable market conditions. Turning to the current fiscal year's performance, some factors, such as the ongoing Houthi attacks on merchant vessels in the Red Sea, will have a significant impact on the shipping market, but at this point, we anticipate performance in line with the medium- to long-term profit targets outlined in "BLUE ACTION 2035."
In the last fiscal year, we implemented bold organizational restructuring and reforms of various internal systems and frameworks to establish the foundation necessary to implement the business portfolio reforms. I know this has been a huge challenge for all of you, but one year has passed since the introduction of the new structure and system, and during this time, I can recognize a broader and deeper understanding of the contents and concept of "BLUE ACTION 2035," and this has gradually led to positive results. I would like to thank all group company executives and employees once again for their efforts in getting "BLUE ACTION 2035" off to a smooth start in its first year.
'BLUE ACTION 2035' Initiatives for FY2024
Based on the results and challenges of the first year, I believe this second year will be particularly important as we prepare to put the entire group on a full-fledged growth trajectory.
In the current fiscal year, we will continue to aggressively carry forward investment while controlling its overall scale, but we need to utilize deep knowledge and broad insight based on the experience of outside experts in our decision-making process, so that we can make appropriate decisions in a rapidly changing business environment. Accordingly, we have decided to establish an "Advisory Board" that will provide expertise from an independent perspective to assist the CEO in making strategic decisions. In addition, a project to transition to international accounting standards, aimed at enhancing access to overseas capital markets and expanding our institutional investor base, will begin in earnest this fiscal year. Both corporate and business organizations, led by the Accounting Division, need to cooperate to ensure the smooth realization of this project.
In my New Year's address, I mentioned "human capital," "digital transformation (DX)," and "safety" as important themes for this year.
First, let me discuss the area of "human capital." In line with our "Human Capital Vision," we have begun reforming our personnel system to create an environment in which all individuals can develop their strengths and maximize their abilities. With the expansion of our business domains, the organization of our group has rapidly expanded in recent years, and the number of people working with us has been increasing. Human capital is becoming more diverse in terms of nationality and expertise, and we urgently need to develop a new personnel system to respond to these changes. Since this is a critical topic that will determine the future success or failure of "BLUE ACTION 2035," we need to discuss it thoroughly and shape it into a solid system. In addition, to create a better office environment, the company cafeteria "Rhine" will be reopened tomorrow on the 15th floor of the Toranomon Head Office, and a new training facility will open this summer on the 35th floor of the nearby Toranomon Station Tower.
In the "DX Vision," we aim to transform ourselves into a corporate group that uses digital technology to address social issues by digitizing data and optimizing operations and organizations by FY2025. In a move to vigorously push ahead with our initiatives to realize the "DX Vision," we established the Headquarters of Technological & Digital Transformation in November of last year, to serve as an umbrella organization for the DX Co-Creation Unit, MOL Information Systems, Ltd., the Technical Division, the Offshore Technical Division, and the Smart Shipping Division. As of today, the headquarters has been reorganized into a unit system, and we established a new Technology & Digital Integration Unit to formulate and implement an integrated technology and digital strategy linked to "BLUE ACTION 2035."
Safety has always been at the very foundation of our group's business, and we have always strived to achieve the world's highest level of safety and quality. In January, we announced our "Safety Vision" and established our group's safety goals and ideals. We will solidify a safety foundation that will allow us to respond appropriately to changes in the external environment, advanced technologies, and the group's business portfolio. To realize our vision, we will continue to study the expansion of specific functions and the establishment of the system.
The advancement of regional strategy, one of the key elements of" BLUE ACTION 2035," is another important theme for this year. We have been experimenting with regional strategy, and as I mentioned earlier, there are many investment opportunities around the world where we can take advantage of our group's strengths. We will work on regional strategy with a more concrete and broader perspective to achieve results, focusing on enhancing the frameworks to pursue regional strategy and strengthening management functions. Development of new business overseas is essential for the global growth of our group. We look forward to further collaboration and cooperation among the corporate/business/regional organizations to further enhance our regional strategy.
This fiscal year will be a special one for the cruise business as it takes a major step forward. Our group has positioned the cruise business as a new growth area in "BLUE ACTION 2035" and is proactively investing in the business, and the new cruise business brand "MITSUI OCEAN CRUISES" is in full swing, and the luxury-class cruise ship, the "MITSUI OCEAN FUJI", which features all-suite cabins, will begin commercial operation in December. Let's work together as a whole group to support the challenges of the cruise business and make MITSUI OCEAN CRUISES a success.
In Conclusion
The MOL Group is committed to "BLUE ACTION 2035" as it takes the leap to becoming a global social infrastructure company, and I am very pleased and encouraged to celebrate the 140th anniversary of our founding with our business performance on track and in good shape, full of energy for future growth. Let's all reaffirm the aspirations and spirit of our group and carve out a history of new challenges in solving social issues and ensuring the further growth of our group.
Finally, our challenge is built on the most important foundations of safety and quality, as well as compliance. This is unwavering in any business environment. I would like to reaffirm this as we celebrate this milestone today. I will continue to take on challenges with a determination to work my old bones hard and make this a fulfilling year. Let's do our best together.