April 01, 2022
To everyone in the MOL Group, I am proud to say that today, the first day of fiscal year (FY) 2022, also marks the 138th anniversary of our founding.
Over the last fiscal year, our business far outperformed our initial plan on the back of robust demand for transport service in the containership business. In addition, we saw a recovery in drybulk and car carrier markets, and the LNG carrier business posted stable profits. We expect a record high profits in our FY2021financial results, which just completed yesterday, March 31. We could manage to catch the wave of the markets and achieved an excellent showing thanks to all of our teams' efforts, we continued to advance our business even in the face of significant changes in daily life and workstyles as COVID-19-induced confusion continued around the world. I deeply appreciate the efforts of all of you over the past year.
Review of Rolling Plan 2021
In Rolling Plan 2021, we set three core strategies - Environment strategy, Regional strategy, and Portfolio strategy - and each of them steadily accumulated achievements. Since our financial performance was significantly higher than the initial plan, and our financial position has dramatically improved. We made major progress toward realizing the Group Vision outlined in the Rolling Plan.
Looking at the environmental strategy, we carried forward investment in LNG-fueled vessels, which contribute to reducing greenhouse gases (GHG) emissions from the MOL Group, based on "MOL Group Environmental Vision 2.1," announced in June of last year. Our investment in LNG-fueled vessels for FY2021 targeted car carriers, Capesize bulkers, and coastal ferries. The order for two LNG-fueled ferries for MOL Ferry, announced in February, follows our 2019 order for two vessels to serve Ferry Sunflower, which will be the first LNG-fueled ferries in Japan. The MOL Group is taking a leadership role in the Japanese coastal shipping industry's response to environmental concerns.
Turning to our regional strategy, we regard Asia, where we expect strong economic growth, as our main focus region, and we are paying special attention to expanding our business in India. In this huge market, we precisely addressed the needs of local big customers in energy sector as we expanded our crude oil tanker and LPG carrier businesses. Taking these efforts as a business model, we will develop other business fields in other areas. I want to emphasize once again that cooperation - across the boundaries of local business bases, group companies, and the Head Office corporate divisions as well as the Head Office business divisions directly involved in the projects - is absolutely crucial as we forge ahead to implement our regional strategy.
In our portfolio strategy, we are working to make Daibiru Corporation and Utoc Corporation wholly-owned subsidiaries in the real estate and logistics businesses, respectively, as both companies account for major positions in our group's non-shipping businesses. We will develop organizational structures aimed at making the most effective use of group management resources and develop both companies' activities on a global scale. In addition, we established a strategic partnership through investment in the transport sector of Methanex, the world leader in the production of methanol, which is in the spotlight as a clean energy resource, and participated in the offshore wind power business in Japan and Taiwan. These projects marked major successes for our portfolio strategy.
Takeshi Hashimoto making the speech. Image by Mitsui O.S.K. Lines, Ltd.
Rolling Plan 2022
I think the business environment surrounding the MOL Group for this fiscal year will remain unstable. Economic and social confusion due to COVID-19 will be calming down, but the impact of the pandemic caused tremendous changes all over the world. Economic activities and social life are not likely to return to pre-pandemic conditions. This will drive real change as everyone responds to the post-corona world. In addition, a decline in demand associated with the end of logistics disruption, sharply accelerating global inflation, the Russian-Ukrainian situation, to name a few issues, make it more difficult than ever to forecast the business environment. We will continue the rolling plan approach and formulate Rolling Plan 2022 as our management plan for this fiscal year in consideration of the need for agility and a crisis management approach to respond to an unpredictable external environment.
"Integrating the collective strength of MOL Group to achieve global growth" - this is our theme of Rolling Plan 2022. To put the strategies in concrete terms, we will continue to build upon the three core strategies - Environmental, Regional, and Portfolio strategy - but this year we will newly demonstrate a clear intention to implement digital transformation (DX) to enhance the effectiveness of each strategy and our group's organizational strength. We will also establish core systems with the aim of creating new value through DX in addition to improving productivity and conducting operational reforms.
The group's financial position significantly improved as a result of an excellent showing in the FY2021 financial results, allowing us to expand the scale of our investments. We will certainly be assessing our target investment and to take proactive steps to make the investments required to fuel group-wide growth. We will place particular emphasis on investment in the personnel who underpin the growth of our business and in the environmental field, where we are working toward a low-carbon and decarbonized society. I want to approach environmental investment with a strong determination to fulfill social responsibility in developing our social infrastructure business as set out in the Group Vision.
Establishment of organizational structure to realize the Group Vision
To realize our vision for the MOL Group in the next decade, we must build the MOL Group's corporate value through the execution of Rolling Plan 2022 and ongoing efforts to solve sustainability issues as the two driving wheels. Therefore, we restructured our organization effective April 1.
We expanded and upgraded the functions of executive officers to establish new positions: Group Executive Officers, who will strengthen group-wide management as presidents of key group companies, the Chief Human Resources Officer (CHRO), who will support our HR strategy including diversity in human resources, and Chief Executive Representatives for East/Southeast Asia/Oceania and South Asia /the Middle East.
Speaking of the organization in the Head Office, we established the "Unit" as a new organization. "Unit" is mainly for organizations that handle many new businesses and need to foster lateral cooperation within the organization, with the aim of raising awareness of their executives and employees.
In addition, new divisions and a unit were added in the Head Office organization: the Real Property Business Division, which will support the planning of a growth strategy for Daibiru Corporation, the Global Maritime Resources Division, which will take the lead in addressing company-wide seafarer strategies and promote active roles for global seafarers and maritime officers, and the DX Co-Creation Unit, which will take full responsibility for leading the company's Digital Transformation (DX). Furthermore, we will newly establish the Legal Division in June, with the objective of enhancing our efforts to ensure compliance with relevant laws and regulations, which require a high degree of legal expertise.
I have high expectations that all group executives and employees work more closely together, transcending the boundaries of their own organizations, and focusing group-wide efforts to meet the challenge of global growth.
We issued our statement on the Russian-Ukrainian situation on March 7. Unfortunately, I am very sad that disastrous inhumane situation still continues. The MOL Group strongly supports various diplomatic efforts to restore peace, and sincerely hopes that peace comes to people in Ukraine and its surrounding nations as quickly as possible. We will also step up our efforts to assist with humanitarian support activities.
Transporting energy resources and other essential goods to people's lives - this is our social responsibility when we think of ourselves as a social infrastructure business. The MOL Group will prioritize to secure the safety of its crew, cargo, and vessels at all time, and follow the international framework of sanctions and Japanese government foreign policy, and fulfills our social responsibility while responding to situations in an appropriate manner and at the same time continuing discussions with parties concerned including business partners.
In fiscal 2022, we will continue our efforts to improve safety and quality, which are the foundation of the Group's business, and to ensure strict commitment of compliance. We will also take on challenges to solve various problems and achieve results by accurately understanding changes in the times and society. Let's make 2022 a fulfilling year.
Mitsui O.S.K. Lines, Ltd. press release