About Us Message from Management

May 26, 2011

Message from "K"Line's New President

Tackling New Challenges through the Efforts of All Members of the "K" Line Family!

Jiro Asakura
President & CEO

I was appointed to succeed President Kenichi Kuroya at the May 13 meeting of the Board of Directors. Former President Kuroya resigned suddenly due to personal reasons, resulting in a turbulent succession, but this is not a time that the Company can stand idly by. I intend to immediately undertake the responsibilities of president and move the Company foreword at full speed to overcome the various challenges we face, including overcoming the effects of the Great East Japan Earthquake so we can achieve our targets and goals.

During my tenure as vice president and senior managing executive officer, I oversaw the Drybulk sector, Human Resources and Energy Transportation Sector, but as president, I will look at the entire group from a balanced perspective and make every effort to build an optimal business portfolio and improve profitability and management efficiency. I will devote myself to my responsibilities as president and serve as a powerful driving force behind the "K" Line Group so the Group can prosper, and I ask for the full cooperation of all Group personnel.

At the end of April, "K" Line announced its newly reformed medium-term management plan entitled "K" LINE Vision 100-New Challenges. Following the collapse of Lehman Brothers, we were confronted with a global economic recession, so we implemented emergency measures and responded to the drastically altered business environment by announcing the "K" Line Vision 100 KV2010 in January 2010. Since then, the global economy has gradually recovered, and under former President Kuroya's leadership, "K" Line's financial performance and in particular the performance of the containership business rapidly recovered. As a result, we were able to achieve the initial targets set under the KV2010 plan-returning to profitability in fiscal year 2010 and resuming the payment of dividends-ahead of schedule. This was in part due to the recovery of the containership market, but it was also thanks to the unstinting and ceaseless efforts of all officers and employees to reduce costs and implement structural reforms, and I would like to take this opportunity to express my sincere gratitude for your hard work.

The new management plan is an extension of earlier plans and adopts the title "New Challenges" to promote strategic investment in new growth areas in order to respond rapidly to changes in market structures and the growth of emerging countries. Its objectives are to establish a stable earnings base and reinforce the Group's financial base by making a qualitative transition away from across-the-board expansion.

The earthquake temporarily caused a reduction in cargo movements of completely built-up cars from Japan, and there are concerns about electric power shortages this summer, making it extremely difficult to forecast the extent of future economic recovery. In the drybulk and tanker segments, some ironworks, coal-fired power plants, and oil refineries were damaged, and we expect sluggish growth in cargo movements to Japan until full restoration is completed. Nonetheless, these developments are temporary, and there is no cause for pessimism.

The "K" Line Group was unable to avoid temporary effects from the earthquake, but we are certain to overcome these hardships in the medium to long term. What we must do now is provide full-scale support to our long-standing business partners for their rapid recovery. I am confident that the cumulative effects of these efforts will lead to the total recovery of the Japanese economy.

Marine transport volumes increased rapidly after 2003 in conjunction with the brisk economic growth of emerging countries such as China and India, and ocean transportation by all ship types enjoyed growth as a direct result of this market expansion, however with the occurrence of the once-in-a-century financial crisis, marine cargo movements and marine transport markets entered an adjustment phase. The recent earthquake disaster, which far exceeded expectations, and a number of other pressing problems including the high value of the yen, rising fuel oil prices caused by persistent high crude oil prices, and rampant piracy in the Gulf of Aden and Indian Ocean have increased various risks, and addressing these changes is a new issue for management. The current business environment is by no means good, but shipping capacity demand is likely to increase in the future supported by gradual economic recovery in developed countries and strong economic growth in emerging countries over the medium to long term. By monitoring these changes carefully and responding appropriately with a sense of urgency, we can strengthen our business foundations even further. Accordingly, I request that all officers and employees raise their awareness of the problems that "K" Line is currently facing and make an effort to listen out for and absorb information on a daily basis.

Throughout the history of the "K" Line Group, we have been able to overcome our problems and make steady progress by directly confronting difficult issues and working together. It is precisely by viewing these adverse circumstances as a positive opportunity and drawing on the "K" Line Group tradition of enterprise to tackle new challenges that we can make substantial advances as we move toward the 100th anniversary of "K" Line.

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