K Line: We Must Continue to Be Ready for Tough Times

2018 promises to be a decisive year for Japan’s K Line Group as the company steams its way toward rebuilding its portfolio strategy.

“This spring, we will take a giant step forward as a brand-new K Line Group. Moreover, 2018 will be the year in which we solidify our foothold in preparation for the next 100 years.

I believe that, if we steadfastly execute our respective roles and consolidate our strengths as professionals, this one year will become an important link to a new era,” K Line’s President & CEO, Eizo Murakami said in a New Year message.

First and foremost the company’s containership and overseas terminal business will be integrated with MOL and NYK’s respective businesses in a new company, Ocean Network Express (ONE), set to start operation in April 2018.

Moving forward K Line plans to focus on dry bulk, car carrier, energy transportation and marine resources development.

“ONE will be an affiliated company accounted for by the equity-method, and thus will have a different operating format. Nonetheless, containership business will remain a core segment of our group, and we will continue to give it our full support,” Murakami said.

“In each of the businesses that will become the group’s mainstays (…) we will advance initiatives to expand our revenue stability and develop new business through technological innovation and business model reform. And logistics business will succeed the network established by containership business and appropriately meet our customers’ needs. In this way we will strive to shape a new K Line Group.”

K Line is on the path of financial recovery having returned to the black in the first half of 2017 fiscal year.

Strenuous efforts were invested in large-scale structural reforms over the past two years in order to weather the storm brought about by the downturn in the container and dry bulk shipping businesses.

Aside to business overhaul, better financial performance has also been attributed to improving market conditions.

However, this is not the time to drop down the guard, as more time needs to pass before the market fully recovers, according to Murakami.

“While we may claim that the combined efforts of everyone—executives and employees alike—have finally borne fruit, it also appears that more time will be required before we see substantial recovery in the supply-and-demand balance. We must, therefore, continue to be prepared for tough times,” Murakami said.

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