2022 Is the Year to Ensure the MOL Group's Sustainable Growth
Tokyo - January 05, 2022
MOL President & CEO Takeshi Hashimoto delivered the following "2022 New Year Online Message" to all MOL Group officers and employees on land and at sea on January 4.
Happy New Year, everyone. First of all, I would like to wish the entire MOL Group family the very best for the New Year. Now let me share some of my thoughts as we enter 2022.
2021 in Review
2021 was a year when we saw the continuing impact of the COVID-19 pandemic, which began in 2020. We formulated our new guideline and took various measures to prevent the spread of COVID-19 at all of our workplaces. I sincerely hope that our daily lives and economic activities would get back to normal more quickly as a result of these measures, but global infections have continued beyond expectations. I don't have to remind you of the burdens the pandemic put on your daily lifestyles, not to mention your work routines. In particular, it put additional strain on our seagoing employees and crewmembers aboard our vessels, who continued to support our business on the front lines, facing not only anxiety about the virus, but also the additional stress of longer onboard assignments due to restrictions on crew changes. I believe our company successfully fulfilled its responsibility to uphold the shipping industry as a key element of the worldwide social infrastructure. I want to express my gratitude to all of you once again.
On a positive note, I want to highlight the performance of our group employee Kae Kurahashi in the international sport event last year. She played a key role in helping Japan's national wheelchair rugby team win the bronze medal. Her commitment to success in this tough competition inspired courage in MOL Group officers and employees. We wish her ongoing success in the future and will continue to give our support.
Looking back at the world economy over the past year, demand showed a swift recovery due to proactive economic support measures in many countries. A shortage of semiconductors led to slowdowns in production of automobiles and other products, logistics were disrupted because of lack of capacity in responding to recovering demand, and energy and natural resource prices spiked-the ocean shipping market experienced the impacts of all these factors. But the industry as a whole remained solid, backed by expanding cargo trade and an improving fleet demand and supply balance. Thus, MOL Group's business performance improved remarkably. A significant increase in revenue for our container shipping company, Ocean Network Express (ONE), is the biggest factor, but the dry bulk business and car carrier business also improved significantly over the previous year. The LNG carrier business also brought in steadily increasing profits. On the other hand, 2021 was a tough year for the tanker business, which weathered a downturn in the VLCC market, and ferry and cruise ship businesses which faced a sharp decrease in passengers due to the COVID-19 pandemic. On a group-wide basis, however, we expect to post all-time record high results for this fiscal year. Key financial indices such as our debt equity ratio also shows a significant improvement.
MOL President & CEO Takeshi Hashimoto. Image by MOL.
Speaking of the business environment in 2022, I hope that the COVID-19 pandemic will be over and we will see a normalization of economic activities and social lives. However, I think the impact of COVID-19 will continue for a little while longer, partly due to the emergence of virus variants. In addition, 2022 will still be a year of high uncertainty, with globally expanding inflation and deterioration of the U.S.-China relationship. In addition, debate around the world related to social sustainability, especially the climate change issue, may intensify.
We must continue to pay close attention to worldwide trends related to environmental issues, particularly decarbonization, which will have a major impact on our business. We shall always keep our antenna up to monitor how national governments and international companies respond to various issues facing the world, such as the environment, the global economy, and geopolitical issues. In September of last year, MOL joined the World Economic Forum, the venue that brings together the world's leading organizations and companies, and I try to proactively participate in exchange of opinions as much as possible. So, everyone, please raise your awareness of changes in the world, proactively participate in various opportunities to discuss the future of our group and share your constructive opinions.
MOL announced the "MOL Group Environmental Vision 2.1" in June 2021, and already set forth three mid-to-long-term targets, namely, "Deploy net zero emissions ocean-going vessels in the 2020s," "Reduce GHG emissions intensity by approximately 45% by 2035 (versus 2019)", and "With the concerted effort throughout the Group, achieve net zero GHG emissions by 2050." We are progressing toward the introduction of LNG-fueled vessels, which is the most effective measure to reduce GHG emissions at the present moment, and introduced our plan to expand the fleet to 90 vessels by 2030. Last year, we announced to invest in LNG-fueled car carriers and Capesize bulkers. This year, we will not only accelerate investment in LNG-fueled vessels, but also invest in low-/de-carbonization businesses such as offshore wind power. We will also step up initiatives to reduce our environmental impact, by adopting the digital transformation (DX) and improving the vessel operational efficiency.
We also position reinforcement of group management as a high-priority issue in the coming year. On November 30, we announced tender offers targeting our group companies Daibiru Corporation and Utoc Corporation and the offering period is currently underway. When this is completed and these two companies become wholly owned subsidiaries, we will develop a system that enables both companies to grow by leveraging the group's management resources more effectively than ever. I believe that deepening collaboration with both companies will lead to group-wide global growth.
The quest for new workstyles in the post-COVID era is an important theme. We need to combine the best points of each communication method-online and face-to-face-and strive to improve productivity. The Improvement of Work Efficiency Committee in the Tokyo Headquaters has held repeated discussions in our search for a new workstyle worthy of the new era. Advancing digitalization of daily operations to take full advantage of the efficiency and convenience of online communication is not only quite effective, but also has become indispensable to maintaining our competitiveness. On the other hand, let's gain a new appreciation of the value of face-to-face communication. Since I took the post as president & CEO, certain things-namely, meetings with customers and business partners and visiting group companies-have not turned out the way I had hoped. Opportunities to verify, evaluate, and adjust my decision-making and opportunities to find out about new ideas are limited without having enough face-to-face conversations. When the pandemic finally eases, I look forward to creating more opportunities to exchange opinions with various people in various places while I continue my "freshman" year as President & CEO.
My Roles and Aspirations as President & CEO
In the "MOL Report 2021" issued last year, I said "I want MOL to be viewed as an excellent company in every respect. That is my goal," as my roles and aspirations. That means, both in Japan and around the world, MOL will become a company that can earn a favorable reputation not just for service quality but in all aspects of operations, including corporate robustness and profitability, the high quality of the company's personnel, a management philosophy that reflects our values and aspirations, technological capabilities, and social trust. This means MOL Group officers and employees can work with a strong sense of duty and great pride in a stable business environment. The MOL Group is active not only in conventional ocean shipping business, but is also moving to broadly expand its business to offshore, logistics, and real estate businesses. Let's aim to improve our corporate value based on the new MOL Group Corporate Mission, Group Vision, and Group Values "MOL CHARTS", announced in April last year, by steadily implementing our management plan and addressing sustainability issues. Compliance is obviously essential if we are to remain an excellent company. And I would like to emphasize once more that the foundation of our business is to ensure safe operation.
Finally, I want to pledge my commitment to safe voyages for all MOL Group-operated vessels. I wish you and your family a very happy New Year, as well as good health, happiness, success, and prosperity.
Mitsui O.S.K. Lines, Ltd. press release