Riding Out Stormy Seas to a Brighter Future

Thank you very much for your continued understanding of and support for the business activities of the “K” LINE Group.

“K” LINE, a company approaching its 100th anniversary in 2019, declares in its Corporate Principle its intention to contribute to society for people’s prosperous living as an integrated logistics company grown from the shipping business. With this in mind, we continue to build our global business and to step forward into a new era with an eye to improved “K LINE Value ”, which symbolizes the corporate value of our Group. We do this by contributing to society through seaborne transportation of goods and distribution services with safe and stable transport that underpins the infrastructure supporting global economic activity.

The international shipping industry is a single market that extends around the globe. It is an arena of free competition with companies of various countries. The economic stagnation in resource-producing countries arising from depressed crude oil prices; slowing economic growth in China, which had been the driving force behind growing trade volume; and the various and growing geopolitical risks seen around the world have produced historic sluggishness in major market segments. As a result, the environment surrounding our businesses is extremely tough, and 2016 became a year of tremendous loss for our Group despite our best efforts to strengthen our cost competitiveness. I dare say that the situation has caused considerable concern and aggravation for everyone concerned.

At this situation, we made a couple of decisions aimed at strengthening our cost competitiveness. On one hand, we have implemented a structural reform that will involve in reducing our small- and medium-sized fleet vessels in the Dry Bulk Business, which has been the hardest hit by market conditions. And on the other, we have decided an integration of Containership segment by the three major Japanese shipping companies. This move is designed to ensure competitiveness through the pursuit of scale in the Containership Business, which is becoming increasingly oligopolistic. We also reexamined our business policies and medium-term management plan with focus on the current and future business environment.

We will execute company-wide initiatives to restore our earnings structure, with primary attention to the enhancement of stable and profitable businesses and the cultivation of growth-oriented, next-generation core businesses. We will also practice management that places primary emphasis on safe operation, which is the foundation of our business, as well as preservation of the natural environment, which is a topic receiving growing attention.

On behalf of the “K” LINE Group, I respectfully request your continued understanding and support.


May 2017