MOL hunkers down

MOL hunkers down    MOL President Akimitsu Ashida said despite measures his firm has taken to reduce losses in the containership business, 'the very difficult environment of the container business is forecast to continue for another three or four years.'
   In a colorful New Year's message, Ashida said the company as a whole will have a profit this year, but its container business should protect itself like a 'rai-cho,' a Japanese snow grouse that 'refrains from flying, digs a hole in the snow to stay inside during winter. It traps air in its feathers to maintain its body temperature and saves its physical strength for the spring.

Ashida

   'In the containership business, which has taken a direct hit from the recession and posted big losses, we have reduced transport capacity by scrapping, redelivery, laying-up, slow steaming and so on, and have trimmed our organizational structure in response to declining worldwide container trade volume, resulting in cost savings of about 46 billion yen ($495 million),' he said. 'Through these countermeasures to narrow down the supply to meet reduced demand, we protect and shelter ourselves during the harsh business climate to seize favorable opportunities by ourselves once circumstance picks up.
   'We must be firm in our resolve to avoid the large losses we saw in fiscal year 2009 and strive to maintain at least some level of profitability,' Ashida told employees.
   MOL, which is involved in many segments of shipping in addition to the container business, returned to profitability in its third fiscal quarter ending Sept. 30, 2009, he said.
   The company expects to make about 10 billion yen ($108 million) in the 2009 fiscal year ending March 2010, which Ashida said would be lower than it should be. If the company was a ship, he said, it would be moving forward at 1 knot compared with 20 knots in fiscal 2008 or 30 knots in fiscal 2007.
   'I would like to see us recovering to a cruising speed of 10 knots,' he said which would equate to about 100 billion yen ($1.1 billion) in ordinary income.
   He noted that while the company had originally planned to increase the size of its fleet by 140 ships during 18 months after the financial crisis, mainly through newbuildings, MOL instead has scraped vessels and redelivered chartered tonnage, decreasing the size of its fleet by about 150 vessels to less than 900 vessels, which he said is about the same size as its fleet before the financial crisis.
   Looking to the future, he said the company will take delivery of about 150 new vessels over the coming three years.