Message from President and CEO on MOL Foundation Day, "Heading for a Quantum Leap Forward in the Next Decade"
April 01, 2021
We are pleased to bring you a message from Mitsui O.S.K. Lines, Ltd. the new President & CEO Takeshi Hashimoto.
Today, as I take the helm from former President & CEO Junichiro Ikeda, I begin steering the management of the MOL Group, and I'm looking forward to working with you.
As we begin the fiscal year (FY) of 2021 with a new organization, I would like to look back at our recent history in 10-year periods. For 10 years in the 2000s, our group expanded its business and achieved significant growth thanks to the successful merger between former Mitsui O.S.K. Lines, Ltd. and Navix Line in 1999, and by catching the wave of rapid growth in emerging countries led by China. For 10 years in the 2010s, we suffered from the market's downturn and deterioration in earnings contrasting to the robust growth of the previous decade, and we made structural reforms to our business to emphasize stable profits. And with the dawn of the 2020s, we are now standing on stage to pursue new growth. I can sense the enormity of my responsibility as well as the rewards we will reap as we set the MOL Group's growth strategies for the next decade, under the circumstances as values change due to increasing environmental awareness, rapid advances in the IT industry, and other factors. Working closely with you, I will develop detailed strategies while always looking 10 years ahead, and take decisive actions.
FY2020 was in many ways the turning point for these changes. We issued a very conservative market outlook at the beginning of the fiscal year due to the global spread of COVID-19 infection. Looking over at various industries, some of them unavoidably faced extremely severe situations. However, backed by the skyrocketing tanker market in early spring and the strong containership business after middle of the year, we are anticipating quite high-level positive earnings. While I am thankful for the favorable earnings themselves and appreciate our team efforts to overcome such difficult market circumstances, I do not assume the conditions will sustain over a long term. We must be aware of another aspect-the extreme positive impact was in fact the result of great stress on the logistics system in the face of the COVID-19 shock. We may see a backward swing in the process of resolving this stress, therefore from now on, we must think of what will happen after this phenomenon is gone. Long-term remote work and restrictions such on meetings, business travel, and various social functions have changed the way of our day to day work, while advances in digitalization have also spurred key changes. Concerns remain about business in the wake of the pandemic, especially the impact on logistics. This does not warrant excessive anxiety, however it's important to keep our antenna out to ensure we make the necessary measures at the right time.
Developing organizational structures in preparation for the next decade
For the next 10 years starting from FY2021, I expect drastic changes to continue, coming at us more quickly than ever. Environmental awareness has been growing, and signs of various value shifts are everywhere. As we drive the new organizational structure starting in April, I am keenly aware of the need for management to look ahead to the next decade. At the same time, I ask everyone to please make a fresh start in the new fiscal year, based on your respective roles. Speaking of "fresh starts," we established the new MOL Group Corporate Mission and Group Vision effective today, April 1. The new group corporate mission "From the blue oceans, we sustain people's lives and ensure a prosperous future." indicates the group's raison d'être in a simple way. The MOL Group Vision "We will develop a variety of social infrastructure businesses in addition to traditional shipping businesses, and will meet the evolving social needs including environmental conservation, with innovative technology and services. MOL group aims to be a strong and resilient corporate group that provides new value to all stakeholders and grows globally." This expresses the group's vision in specific and comprehensive terms, and matches "the vision from 10 years from now" stated in our management plan, Rolling Plan 2021 (RP2021), which I will mention later. We will also revise the MOL group's common sense of values MOL CHART to MOL CHARTS by adding an "S" for "Safety." This newly increases safety awareness following the WAKASHIO incident last year in Republic of Mauritius and reflects our ongoing commitment to pursuing the world's highest level of safety in the group's core values. All of us here today embody the MOL Group Corporate Mission and will act upon a specific strategy-RP2021 and sustainability issues-to achieve the MOL Group Vision, based on MOL CHARTS, our shared sense of values.
Overall policy of RP2021
When we established RP2021, we had repeatedly discussed company-wide themes of environmental strategy and regional strategy as the horizontal axis, and growth strategy of each business segment as the vertical axis, in consideration of changes in the business environment that will occur in the next decade. We will announce the plan soon. Now let me give you a brief introduction of the overall policy.
Starting with the environmental strategy, based on accelerating changes around the world, we will review the "MOL Group Environmental Vision 2.0," which was announced in June of last year, and update it as "Environmental Vision 2.1". In version 2.1, we will move forward the target year to achieve Net Zero GHG emissions through our group business to 2050. At the same time, we will release the MOL Group's unique long-term roadmap to reduce emissions, and accelerate our actions on five strategies toward fulfillment of the roadmap. In addition, we see demand for LNG rising as a low-carbon energy resource until the arrival of the fully decarbonized era. While we will certainly address demands for transport and so on, we will also move ahead with other programs such as shifting our fleet to LNG-fueled vessels, introduction of alternative vessel fuels, and investment in renewable energy businesses. We will also make future investment decisions with an eye toward the introduction of carbon credits in the future.
The regional strategy is an important aspect of our overall business strategies. We will steadily pursue expansion of business in Asia, the top-priority region where we expect economic growth, especially in India and China. While increasing profits by honing our current businesses and improving customer satisfaction, we will boldly challenge new businesses by identifying potential targets under detailed strategies. Even as we move aggressively to seize new opportunities, it is critical to ensure optimal allocation of limited management resources. We will continue to appropriate oversight of our business portfolio and investment selection, while maintaining our stance of boosting organizational strength to enhance management resources from inside of the company. As we foster cooperation across existing organizations and group companies, the importance of communication, not only in the Head Office, but also across affiliates and overseas subsidiaries, will become more important in further improving our productivity.
I have been deeply involved in the energy-related business for many years and have cherished business growth potential, advancement, and resilience. While identifying growth potential based on solid forecasts and moving into action ahead of others, we will respond to changing situations by preparing to make another attempt, or a different attempt, and get projects on track by establishing an organizational structure that maintains its strength and can make ongoing progress. This is clearly expressed in the new group vision, and it's an especially important element as we address the incessant changes we will experience over the next decade. You will surely be able to leverage some of the things I have mentioned in your day-to-daywork. I hope you think about these ideas carefully and put them into practice.
Meeting Stakeholders' expectations
In conclusion, I would like to talk about the WAKASHIO grounding and oil spill that occurred last year. This terrible incident made us think deeply about our social responsibility as a corporation. Fulfilling our social responsibility means satisfying the expectations of all stakeholders involved in our businesses, such as customers, business partners, shareholders, employees, and communities. This not only encompasses measures to improve quality, safety (the very foundation of our business) and compliance of course, but also demands that we operate our business in a way that fully addresses the concerns of our broad range of stakeholders. We will always think about what our stakeholders expect, and strive to meet and exceed those expectations.
We cannot open up a prosperous future if we allow the fear of change to stop us. We will navigate these rough waters by responding to changes in positive ways and transforming our consciousness on our own. Starting today, let's all do our best as we work together toward success in the coming decade.