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It is my great pleasure to commemorate MOL’s 125th anniversary,
together with all of you from the MOL group companies.
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While
the average company’s lifespan is commonly said to be around 30
years, MOL has grown and evolved over a period four times greater. The
world economy is currently in what has been called a once-in-a-century
crisis, but in its lifetime MOL has overcome many serious ordeals and d=
ifficulties;
the Great Depression of the early thirties, World War II, the oil crisi=
s of
the seventies, the sharp appreciation of the Japanese yen after the Pla=
za
Accord in 1985, and others.
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Yet, here we are today celebrating the 125th anniversary of the
company’s founding. It seems to me that now is an opportune moment =
to
reflect on the severe challenges and battles our predecessors faced, and
remember how they dealt with those ordeals and overcame the difficulties =
they
were confronted with.
Gratitude for our Predecessors’ Dedication=
Since the outbreak of the financial crisis last year, the issue of employ=
ment
has taken center stage across the world. MOL suffered extreme employment
turmoil just over 20 years ago. Employees who joined MOL more recently may
not be aware that we suffered terribly from the hike in dollar-denominated
manning costs for Japanese seafarers, due to the sharp appreciation of the
yen triggered by the Plaza Accord in 1985. Under these circumstances, MOL
reluctantly introduced an “Emergency Employment Adjustment PlanR=
21;
and promoted the internationalization of its seagoing manning force. As a
result, over 3,000 Japanese seafarers (60% of our total number of seafare=
rs
at that time) left MOL to save the company collapsing. Thanks to this act=
of
extraordinary sacrifice and dedication by our predecessors, MOL was able =
to
shift the composition of its seafarers to one that was more multinational=
and
recover its global competitiveness. This lay the foundation for our
subsequent growth. It is with sincere gratitude that I, even now, remember
the selfless action of those who worked so hard for the company and were
prepared to make the ultimate sacrifice of leaving to ensure the survival=
of
the company. I will never forget the trouble we experienced 20 years ago,=
and
the memory of that time continues to spur me in my full efforts to enhance
MOL’s foundation.
Cash-flow is as important as Profit
With our healthy financial base achieved by strong and stable profits over
recent years, in the new fiscal year starting today I would like to maint=
ain
our profits at a level which ensures we can continue to stand strong and =
ride
out the tough business climate we are in. To achieve this goal, we must
respond nimbly to market movements and changes. Under the current tight
financial market conditions, we must pay closer attention to cash-flow. W=
hile
our company profit level was minimal prior to year 2000, cash-flow was al=
most
balanced, with the replacement of existing vessels being a major facility
investment. After year 2000, when our profits increased, pushing up our
cash-flow, we were able to embark on a major fleet expansion plan using t=
he
cash generated by these profits. By doing this, we were able to dramatica=
lly
enhance the fundamental strength of our business operations. However, in
order for us to continue receiving the vessels we contracted before the
current economic collapse, we must maximize operating cash-flow and keep =
our
finances in good shape. I would ask all of you to keep searching for ways=
to
improve our cash-flow as you carry out your daily duties, paying particul=
ar
attention to the improvement of credit control and the earliest-possible
collection of accounts receivable.
The Entire World is Our Local Market
If we look only to the Japanese market as our local market (i.e. cargo
transportation to/from Japan), we can expect domestic demand to decline
during this recession. However, the business field MOL operates in is
worldwide, and we must take the approach that the entire world is our loc=
al
market at arm’s length. In such a large market, opportunities for
MOL’s growth and expansion abound. In particular, there remains huge
potential for cargo transportation in regions such as China, India, the
Middle East, Central and South America, and Africa. These markets must be
regarded as part of our local market, or “domestic” demand, a=
nd
handled accordingly in keeping with the global nature of our business
activities. As world seaborne trade increases, so too will MOL’s
“domestic” demand. The key to our growth strategy is to seize,
without fail or hesitation, opportunities as they arise.
In order to take advantage of global “domestic” demand, we mu=
st
adopt a more globally competitive business system. While the globalizatio=
n of
MOL seafarers is already well established, we need to make further effort=
s to
enhance our global administrative structure. There is no doubt that Tokyo=
should and must continue to function as the company’s
headquarters. At the same time, when dealing with global
“domestic” demand, it is essential that daily operations
(business activities, back office operations, etc.) be performed at the m=
ost
optimum location by the most competent staff which give the best cost
performance.
When the international shipping industry returns to the growth track, we =
can
expect the lineup of major players to be quite different from that of tod=
ay.
Only shipping companies operating with reinforced cost competitiveness wi=
ll
be able to survive. To prepare for the new circumstances we find ourselves
in, we need to remain one step ahead of the competition and continually
search for new and bold ways to strengthen our competitiveness.
“Adversity Makes A Man Wise”<=
span
lang=3DEN-GB style=3D'mso-fareast-language:EN-GB'>
I believe that MOL employees will rise to the challenge and become strong=
er
and more competent as a result of the severe business climate we face.
Although the economic crisis will require a substantial effort to overcom=
e,
it also presents a precious opportunity for young staff to enhance and ho=
ne
their skills. As the proverb says, “adversity makes a man wise̶=
1;.
Doing What Needs to be Done i=
s the
Basic of Safe Operation
At the end of March, Japanese escort ships joined a multi-national force =
of
naval vessels deployed off Somalia to carry out “anti-piracy”
operations. This decision was made partly in response to our repeated
petitions to the Japanese government for action and a realization by the
government of the seriousness of the piracy problem in this area. Like th=
is
example, a commitment by all individuals at each position in the organiza=
tion
to not accept doing nothing but to do what needs to be done without delay=
is
the basic of safe operation. Especially in the current recession, where t=
he
“survival of the fittest” is very much at play, the highest
levels of safety and quality in the management and operational sides of o=
ur
transportation services are indispensable if MOL is to forge ahead of its
competitors and lead the international shipping industry. To avoid accide=
nts,
even in this difficult time when you may be tempted to take short-cuts, i=
t is
important that you renew your determination to ensure operational safety =
at
all levels and for all employees.
“Every Cloud Has a Silver Lining”
Now, we are facing an economic crisis such as none of us have ever
experienced. But there is a saying that “every cloud has a silver
lining.” Global seaborne trade has fallen, but the world economy wi=
ll
certainly recover and ocean shipping will return to growth sooner or late=
r.
Our company has moved swiftly to adjust its fleet size as an emergency
response to the current declining cargo traffic. While our initial fleet =
plan
to reach 1,200 vessels by 2012 will now be slightly delayed, we are
continuing our preparations to expand ship management capabilities to
accommodate our original plan. Working together, we can overcome this
difficult period and place ourselves in a position to seize new opportuni=
ties
for growth as and when the economy turns around.
Finally, I pray for the safety of all MOL group vessels, and wish everyone
from around the world who are part of the MOL Global Team success and
prosperity in the years that lie ahead of us.
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