Message from President and CEO on MOL Foundation Day Overcome this Crisis and Fuel New Growth
April 01, 2020
We are pleased to bring you a message from Mitsui O.S.K. Lines, Ltd. President & CEO Junichiro Ikeda.
FY2019 in Review
All MOL Group members, today we begin Fiscal Year 2020 and mark the 136th anniversary of our founding. During the last fiscal year, we have faced a severe environment, with a deceleration in the global economy starting in the second half and the expanding outbreak of the novel coronavirus since the beginning of this calendar year. However, over the course of the year, we continued working toward the achievement of our initial targets in “Rolling Plan 2019.” We should never be too optimistic about our future situation, but first I would like to express my appreciation for efforts of all MOL Group members over the last fiscal year.
Impact of the Novel Coronavirus
Now, the novel coronavirus is raging all over the world. In my view, it is inevitable that this will significantly affect global trade volume, including the product category, due to travel restrictions aimed at preventing the infection from spreading. In our company, starting in March, we have shifted to remote work as a measure against the novel coronavirus from a viewpoint of preventing spread of infection. This abnormal situation may become prolonged, but sooner or later be ended, and the economy must move toward recovery. I told you in my previous message that we must prepare ourselves to quickly go on the offensive without missing a chance. On the other hand, this is structurally different from the 2008 financial crisis triggered by the collapse of Lehman Brothers. The current crisis is shrinking the real economy, particularly human activity itself, so the real impact including the psychological effects, is immeasurable. In this sense, I think the ongoing economic effects triggered by the expansion of this outbreak may lead to significant changes.
Under such a crisis, we must make efforts to ensure profits in FY2020 and steadily execute measures to achieve it. To be specific, we will take steps to limit our market exposure while keeping in mind the loss in cargo transport volume—I think this sums up everything at the present time. In this fiscal year, we plan to operate businesses in which we are always conscious of controlling our market exposure.
About Rolling Plan 2020
Notwithstanding the current situation, our vision still remains unchanged despite the deteriorating business environment and changing economic conditions, and the roadmap toward realization of our vision is the Rolling Plan 2020 management plan. We continue working to make the MOL Group "a Group of Business Units with No.1 Competitiveness in Respective Areas" and build upon the three core strategies of our management policies.
In the same manner, we are moving forward with the allocation of management resources in business fields where we have a competitive advantage, while being conscious of financial discipline. I am aware that "stress-free" as a business strategy is now becoming part of our DNA now, and we will increase the number of MOL fans through approaches centered on innovative applications of information and communications technology (ICT). In our environmental strategy, we will set an ambitious goal under a "new" environmental vision, currently a work in progress, and more effectively address environmental issues.
In addition, I hope the divisions responsible will take the initiative to carry forward enhancement of our marine technical skills, use and application of ICT, technology development, and promotion of workstyle reforms.
Three years have passed since we launched the rolling-style management plan, and I have strong confidence about points such as improving the company's business performance and cultivating internal awareness, particularly frank communication. What I want to think about as we continue to push forward, in addition to our efforts accumulated over the years, is "toward new growth." As I told you in my New Year message, I think we will not only expand the scale of our business, but also achieve qualitative growth. What we need to fuel the growth of our company now are "Reforms of business models and a domain shift" and "Enhancement of organizational capabilities and efficiency." For the former theme, I took time for discussions with business divisions while formulating the rolling plan, and confirmed growth fields and tasks to address in each business field. We will work to reform our business models, moving aggressively into growth fields and enhancing our competitiveness by providing solutions to the issues we face. "Enhancement of organizational capabilities and efficiency" was born out of the idea that we must amply exert potential abilities unique to our group. I have appraised the efforts and contributions of business divisions over the years, but you must still have room to demonstrate your abilities. Factors that impede this are a mindset centering on your business divisions and the established concept that basically follows precedents. It is important to clear these away at once and think for yourself about what we really need. Under the watchwords "Refresh the organization," we determine specific numerical targets, and move forward with specific measures from streamlining operations to boosting efficiency using our group members' expertise, with the aim of improving our productivity in steps over three years. To achieve continual, sustainable growth, we need to change our corporate constitution on our own to meet economic and societal changes, and this is a goal that all of us, throughout the company, must achieve to secure our future.
To steadily implement Rolling Plan 2020, we established the following new organizations effective April 1. We established the position of Chief Environment and Sustainability Officer, a new executive officer in charge of promoting environmental strategies and sustainability. This position adds the viewpoint of promoting sustainability to our group environmental strategies, which we have discussed since last year, because we have no time to spare to address global environmental issues including climate change. We recognized anew, through the development of the "MOL Lighthouse" customer information platform, that the key to realizing the stress-free services we strive for is the use of ICT, and established the position of Chief Digital Officer, a new Executive Officer in Charge of Digital Business Strategy. Other new positions include the Executive Officer in Charge of Refreshing Organization to promote measures for improvement of our productivity, the Executive Officer in Charge of Enhancing group management to promote approaches that are based not only on the viewpoint of corporate management, but also on using the group companies’ expertise, and the Executive Officer in Charge of Domestic Regional Strategies to recognize and utilize local networks that are just under the surface.
Looking at our internal organization, we restructured the current Offshore Project Division into two. The division remains responsible for crude oil-related businesses such as FPSO projects and shuttle tankers projects. LNG-related businesses such as FSRU projects and LNG powership businesses are lead by the newly established Offshore Gas Project Division. We also transferred offshore wind power and its associated businesses, previously under the New and Clean Business Division, to the Steaming Coal and Renewable Energy Project Division to promote the business by uniting with our power company customers. We also consolidated divisions, restructured organizations, and transferred businesses. The purpose is to emphasize not conventional organizational units based on ship type, but promotion of projects from the viewpoints of customers. This concerns the "Enhancement of organizational capabilities and efficiency" as I mentioned earlier, and I hope you approach your work with a sense of speed under our more efficient organizational structure.
Even under today's severe environment, our business foundation is safe operation and compliance. Keeping in mind these two highest priorities, first, let's take action to minimize the impact on our business performance for FY2020 as we move ahead toward the vision set out in Rolling Plan 2020.
Meanwhile, all employees aboard our vessels at sea and our group members working overseas, and their families, are fulfilling their assignments even in the face of the current difficulties. We do our utmost to make their work environment safe and secure and support their family members at home while their loved ones are far away. Please approach your duties with safety and health as your top priorities.
Finally, our social life itself is threatened by restrictions on people's comings and goings due to the expanding novel coronavirus infection, but human activities will continue. I am recognizing anew the scale and importance of the ocean shipping industry's roles in supplying commodities and energy for our activities. Bearing in mind the responsibility our group shoulders as part of this infrastructure, we want to continue to expand our businesses and achieve further growth. I want this to be a full and fruitful year in which we bring together all of our group-wide strength. Let's all pull together and do our best.