“K” LINE UNVEILS CORPORATE PLAN TO CUT COSTS BY $230 MILLION

“K” LINE UNVEILS CORPORATE PLAN TO CUT COSTS BY $230 MILLION

“K” LINE UNVEILS CORPORATE PLAN TO CUT COSTS BY $230 MILLION

   Kawasaki Kisen Kaisha said it will implement a new three-year management plan that includes cutting costs by 30 billion yen ($230 million), strengthening its organization and expanding its logistics activities.
   The “KV-Plan” will commence in its fiscal year, which began in April, and succeed the Japanese group’s former five-year management plan, named “New “K” Line Spirit for 21.”
   “K” Line said the previous plan was stopped “in view of various huge changes to management circumstances.” The new KV-Plan will “tackle new imminent assignments with speed in the harsher and tougher management circumstances surrounding the shipping industry,” the group added.
   The new plan’s top priority is to turn around the group’s containerships business. This business “has greatly worsened due to the huge drop in freight rate level,” “K” Line said.
   Under a cost curtailment program named “Cost Slash-300,” “K” Line plans to cut costs by Yen 30 billion ($230 million), starting with Yen 20 billion ($153 million) of cost reductions in the current fiscal year. Accomplishing the plan will upgrade “K” Line’s global cost competitiveness, the group said.
   Under the plan, the Japanese group also aims to increase its shareholders’ equity, and lower interest-bearing liabilities to less than Yen 280 billion ($2.2 billion), regardless of the scale of business.
   The corporate plan will also enhance “K” Line’s regional businesses, such as those of “K” Line Pte. Ltd. in Singapore and “K” Line (Europe) Ltd. in London. It will “redouble efforts” to implement logistics businesses, including a roll-out of the business model Total Logistics Solutions, and seeking synergies with the group’s container shipping business.
   “K” Line said it will start publishing quarterly financial statements, starting in the third quarter of the current fiscal year, and introduce stock options to encourage senior executives to achieve.