Navigating
the
Future
MOL REPORT 2019
| Year ended March 31, 2019 |
This report is printed on Forest Stewardship Council®
(FSC)-certified paper made of wood from responsibly
managed forests.
It was also printed using vegetable oil inks.
Printed in Japan
MOL GROUP CORPORATE PRINCIPLES
As a multi-modal transport group, we will:
1
Actively contribute to global economic growth and development,
anticipating the needs of our customers and the challenges of this new era
2
Strive to maximize corporate value through creativity, operating efficiency,
and promotion of ethical and transparent management
3
Nurture and protect the natural environment by maintaining
the highest standards of operational safety and navigation
MOL CHART
MOL CHART represents the values that are to be
shared by all members of the MOL Group worldwide.
These values shall be common guidelines to pursue
the best course of action for the highest quality of
output for our stakeholders and to achieve MOL’s
corporate goal.
Challenge
Honesty
Accountability
Reliability
Teamwork
Innovate through
insight
Do the right thing
Commit to acting with
a sense of ownership
Gain the trust of
customers
Build a
strong team
Our Foundation
2 MOL’s History: “Spirit of Challenge and Innovation”
4 Value Creation Model
For Our Sustainable Growth
6 Message from the CEO
12 Overview of the Management Plan “Rolling Plan 2019”
18 Message from the CFO
20
Special Feature
MOL Opens Up a New Sea Route for LNG Trade
—Joining the Yamal LNG Project
26
Addressing Sustainability Issues
26
Overview of MOL’s Sustainability Issues (Materiality)
28 Value-Added Transport Services
32
Marine and Global Environmental Conservation
36
Innovation for Development in Marine Technology
38
Human Resource Cultivation and
Community Development
42
Dialogue between the Outside Directors
46
Board of Directors, Audit & Supervisory Board
Members, and Executive Officers
49
Corporate Governance
Contents
Underlined words in this report are
explained in the Glossary on page 78.
Business Strategy & Review
54
At a Glance
56
Market Position (Fleet Size)
57 Market Data
58 Overview of Operations by Segment
Data Section
70 Financial and Non-Financial Highlights
72
Key Indicators
74
The MOL Group
76 The MOL Group’s Global Network
77
Information Disclosure and External Recognition
78
Glossary
79 Shareholder Information
MOL’s Communication Tools
MOL produces the following publications as a means of
promoting communication with stakeholders. The latest
versions of all reports can be found on our website.
https://www.mol.co.jp/en/ir/
Market Data
マーケット･データ
June 2019
2019年6⽉
Market Data
MOL Report
Investor Guidebook
Forward-Looking Statements
This report contains forward-looking statements concerning
MOL’s future plans, strategies, and performance. These
statements represent assumptions and beliefs based on
information currently available* and are not historical facts.
Furthermore, forward-looking statements are subject to a
number of risks and uncertainties that include, but are not
limited to, economic conditions, worldwide competition in
the shipping industry, customer demand, foreign currency
exchange rates, price of bunker, tax laws, and other regulations.
MOL therefore cautions readers that actual results may
differ materially from these predictions.
* As of June 30, 2019 unless otherwise specified
1
MOL’s History: “Spirit of Challenge and Innovation”
Throughout its more than 130 years of history, MOL has grown into one of the world’s largest full-line
marine transport groups by constantly anticipating the needs of its customers and future demand, while
overcoming various challenges along the way. What has enabled this is MOL’s “spirit of challenge and
innovation.” MOL will continue to nurture this spirit as it heads into the next 130 years.
2017
Delivery of the MOL FSRU
Challenger, the first FSRU
owned and operated by an
Asian shipping company.
1961
Delivery of the KINKASAN MARU,
the world’s first automated ship that
maneuvers the main engine from
the bridge and centrally monitors and
controls the machineries from
the engine control room.
1964
Mitsui O.S.K. Lines, Ltd. (MOL) is
established through the merger of
O.S.K. Line and Mitsui Steamship.
1968
Full containership
services commence.
1965
MOL launches Japan’s
first specialized car car-
rier, the OPPAMA MARU.
1884
Osaka Shosen Kaisha
(O.S.K. Line) is founded.
1890
O.S.K. Line launches its first
overseas route service
between Osaka and Busan.
1909
O.S.K. Line launches its first
long-distance ocean service
between Hong Kong
and Tacoma.
1942
1930
High-speed cargo ship, the
KINAI MARU, is constructed
and begins rapid transport
service on the New York route,
thereby dramatically shorten-
ing the required shipping days.
Mitsui & Co., Ltd. spins off its shipping
department to create Mitsui Steamship Co., Ltd.
1939
Cargo–passenger ships, the ARGENTINA MARU
and the BRASIL MARU, enter service on the South
America route. These vessels represent the state
of the art in Japanese shipbuilding at the time.
Self-Reinvention to Adapt to External Changes
1884
1945
1946
1983
Japan’s first specialized methanol
tanker, the KOHZAN MARU,
enters service.
1984
MOL’s first in-house managed
LNG carrier, the SENSHU MARU,
enters service.
1989
Navix Line, Ltd. is estab-
lished through the merger
of Japan Line, Ltd. and
Yamashita-Shinnihon
Steamship Co., Ltd.
1989
Japan’s first full-fledged
cruise ship, the FUJI
MARU, enters service,
ushering in the era of
leisure cruises in Japan.
1999
Formed as a group of small-sized ship owners coming
together in order to survive as a business,
MOL advances and expands into overseas routes.
MOL grows into a world-leading full-line marine
transport group amid the postwar recovery
and rapid economic expansion of Japan.
The founding of MOL can be traced back to Osaka Shosen Kaisha
(O.S.K. Line), which was established in 1884 by ship owners in the Seto
Inland Sea area and their in-kind contributions of 93 vessels. At that
time, the sakoku (closed country) era of Japan had come to an end, and
the Meiji Restoration was already underway. Accordingly, the need for
marine transport on both domestic and overseas routes rose dra-
matically. The Company had actively expanded into coastal shipping
routes by the 1890s and successfully launched its first long-distance
ocean service around 1910. In these ways, the Company has grown as a
foundation underpinning the development of foreign trade in Japan.
Many Japanese merchant shipping fleets were destroyed during World War
II. Amid Japan’s successful recovery from the devastation of war, MOL
became an integral part of the development of the Japanese economy
through its marine transport services. While doing so, the Company grew
into a full-line marine transport group that possesses a wide range of ves-
sels. The Company worked to promptly respond to the need for specialized
and large-sized vessels and repeatedly took on challenges from a techno-
logical standpoint, including launching the world’s first automated vessel
that centrally controls the main engine from the engine control room and
Japan’s first specialized car carrier. This approach enabled MOL to create
new value and opened up the opportunities for business field expansion.
1995
Formation of world’s first
containership alliance
(a strategic international tie-up).
1996
Tokyo Marine Co., Ltd.
(currently, MOL Chemical
Tankers Pte. Ltd.) becomes a
consolidated subsidiary of MOL.
1999
New Mitsui O.S.K. Lines is
established through the merger
of MOL and Navix Line.
2004
Daibiru Corporation
becomes a consolidated
subsidiary of MOL.
2007
Delivery of world’s largest
iron ore carrier at the time,
the BRASIL MARU.
2010
MOL’s first participation in
the FPSO business.
2012
Delivery of world’s first hybrid car
carrier, the EMERALD ACE.
2016
Delivery of world’s first large ethane
carrier, the ETHANE CRYSTAL.
2019
An agreement to participate in the
LNG–to–Powership business is reached.
2018 April
Operations begin at Ocean Network Express
Pte. Ltd., a company formed through the
integration of three Japanese shipping
companies’ containership businesses.
2018 March
Delivery of the VLADIMIR RUSANOV as the first
vessel for the Yamal LNG project, the world’s
first project that uses ice-breaking LNG
carriers with Arc7 specifications.
Special Feature P20
2000
2008
2009
MOL actively invests in natural resources
and energy transport fields in anticipation of
economic development and the rising demand
for natural resources in China.
MOL implements its bold Business Structural Reforms
in response to the rapidly changing business environment.
Further, MOL transitions into a marine transport group
that fits the needs of the new era.
After the 1999 merger with Navix Line, which was particularly
strong in transporting natural resources and energy, MOL
aggressively invested in these fields, predicting China’s economic
development and increased demand for natural resources. The
Company continued to scale up its fleet of dry bulkers including
iron ore and coal carriers and tankers, which transport commodi-
ties such as crude oil and petroleum products. Reaping the benefits
of these upfront investments, profit in fiscal 2007 reached a record
high, thanks to the unprecedented boom in marine transport that
was driven by the rapid expansion of imports in China.
Against the backdrop of a global economic slowdown and the oversupply of vessels,
the shipping market stumbled and has continued to struggle with ongoing
stagnation. To respond to the increasingly difficult business environment, MOL
implemented the Business Structural Reforms, which targeted the dry bulker
business and carried out the integration of the containership businesses of three
Japanese shipping companies. Additionally, the Company invested preferentially in
its areas of strength, including the LNG carrier and offshore businesses, while
working to expand into the new fields of environmental and emission-free
businesses to meet the needs of the new era. In these ways, MOL will continue
to pursue challenge and innovation as a global leader in marine transport.
2
3
Our FoundationMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Value Creation Model
Through a two-pronged approach that involves the management plan, called “Rolling Plan,” and
initiatives toward the sustainability issues, the MOL Group aims to realize its 10-year vision to
“Become a Group of Business Units with No. 1 Competitiveness in Respective Areas.” At the same time,
by providing unique, high-quality transport services, the Group is working to resolve social issues and
increase corporate value as an indispensable lifeline that supports people’s daily lives and industries.
Customers
and Society
Marine and
Global
Environmental
Conservation
Innovation
for
Development in
Marine
Technology
Value-Added
Transport
Services
Human
Resource
Cultivation and
Community
Development
Governance
and Compliance
to Support
Businesses
MOL’s Sustainability Issues
(Materiality)
P26
Contributing to the Sustainable Development
Goals (SDGs) through addressing social issues
to minimize our negative impact on society and
maximize our social value
Value-Added Transport Services
P28
Realizing High-Quality Transport Services That Support People’s Daily Lives and Industries
• Offer safe and stable transportation
• Provide highly economical solution to customers
through large-volume and bulk transport services
• Provide high-quality transportat services that meet
customer needs
• Contribute to establishment of energy infrastructure
in emerging countries
PDCA Cycle Based on Changes
in the External Environment
Management Plan
“Rolling Plan 2019”
P12
1.
Concentrated investment of management
resources in the business fields where MOL has
strengths, which will mainly be offshore businesses
2.
Provision of “stress-free services,” which MOL
will offer from the customer’s perspective
3.
Promotion of environmental strategies and
development of the emission-free business
into a core business
10-Year Vision
Become a Group of
Business Units with
No. 1 Competitiveness
in Respective Areas
Continue to accumulate highly
stable profits while ensuring
other variable profits
Marine and
Global
Environmental
Conservation
Innovation for
Development in
Marine Technology
P32
P36
Human
Resource
Cultivation and
Community
Development
P38
Governance and
Compliance to
Support Businesses
P49
Marine Technical
Skills
Safe Operation
ICT
Technological Development
Human
Resources
Governance
4
5
MOL’s Business Foundation
Our FoundationMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Message from the CEO
We will sustainably increase our corporate value
by realizing our 10-year vision to
“Become a Group of Business Units with
No. 1 Competitiveness in Respective Areas.”
Junichiro Ikeda
President & CEO
How We See the External Environment
We need to take a step beyond conventional marine
transport model and enter new business fields.
both public and private sectors around the world are
promoting efforts to dramatically reduce greenhouse gas
(GHG) emissions by 2050 based on an international consensus,
namely the long-term targets of the Paris Agreement. In
light of this, we must sensitively capture the changes in
business strategies and focusing on environmental and
change, the most important role and essential value of
emission-free businesses.
marine transport remains to transport goods safely and
As we stated in “Rolling Plan 2019,” the time is over in
efficiently. We must continue to preserve this unchanging
which one successful business model can keep working
value. From a customer’s perspective, I would say that
and ensure growth in the future. We therefore need to
marine transport services still cause a certain amount of
the world, think beyond our conventional business models,
leverage our long-cultivated competitiveness and business
stress. Our ultimate mission is to reduce this stress as
and take prompt action to change.
foundation to take a step beyond the conventional marine
much as possible, and we will remain thoroughly committed
To adjust ourselves to such circumstances, in fiscal
transport model and enter new business fields.
to fulfilling this mission going forward.
Global trade systems as well as the overall economic structure
2017 we transitioned from our previous practice of
are clearly in a period of transition, making it extremely
adopting three-year management plan to setting a yearly
difficult for us to predict the future business environment.
“rolling type” management plan. The intention was to
When we look at the world, investment demand in developed
maintain flexibility in our management and foster a cor-
countries is slowing down, while that in the emerging markets
porate culture that proactively pursues changes by
is still growing although the outlook is becoming unclear.
appropriately ascertaining our future direction without
Under such circumstances where there is a mixture of
being constrained to our current business performance.
positives and negatives in the overall external environment,
In fact, by actively responding to diversifying demand, we
it is becoming more and more challenging for our company
have already taken on repeated challenges, which
To Continue Being the Chosen Partner
of Our Customers
We must make an unrelenting effort to further
enhance our intangible assets.
Now, the question is what can we do in order to be more
proactive in dealing with customers’ stress. When I con-
sider where the source of our value is, I believe that lies
with our intangible qualities, an example of which is our
human resources. They also include the track record we
have built in providing solutions to our customers based on
safe operations. The strong trust-based relationships we
have cultivated with our customers through such services
is another intangible quality. Of course, we have also been
to foresee customer trends.
cultivated our insight and built up a track record in the
So far I have talked about the changes that are happening,
promoting initiatives to develop other aspects of our
The growing level of environmental awareness is
energy domain. In addition, in terms of resolving
but there are certain things that do not change over time.
business, which include our technical skills and IT.
another trend that has a significant impact on the marine
environmental issues, we decided to accelerate our
One thing is our role as a marine transport company and
However, focusing just on these aspects will allow us
transport industry. Especially in regard to climate change,
efforts by placing these issues at the center of our
the value we provide our customers. Even as the times
beat the competition only in the near term, as other
6
7
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Message from the CEO
companies will at some point catch up and we will lose
Marine transport is an industry that cannot be parted
our competitive edge.
from the effect of the market conditions. Even with a good
In the marine transport business, we are often not
level of stable profits, we cannot avoid the occasional impact
explicitly told the specific requests by the customers in
of fluctuating market conditions. However, at times of such
terms of methods or timing. This means we have to make
fluctuations, we can still minimize the negative impact and
concerted efforts to understand the nature of our customers’
maximize the positive if we are able to maintain “No. 1
businesses, including the direction of their strategies, our
Competitiveness in Respective Areas.” It is obvious that
position within their value chain, and their order of priorities.
such competitiveness determines our success or failure as
Then, based on such understanding, we need to offer them
the cycle repeats over the long run. That is why I sincerely
solutions that meet their needs. This is an area in which
and strongly believe we as a company should always
we can differentiate ourselves from the competition. To
keep this in mind.
Progress in Fiscal 2018
We succeeded in laying the groundwork for
our future in each business field.
For the progress we made in fiscal 2018, let me begin my
explanation with our business performance. In April 2018,
operations commenced at Ocean Network Express Pte. Ltd.
continue being the chosen partner of our customers, we
Our core strategies for achieving “No. 1 Competitiveness
(ONE), our integrated containership business venture.
must make an unrelenting effort to further enhance our
in Respective Areas” are “Concentrated investment of
However, due to such factors as confusion surrounding the start
businesses into core businesses,” I believe that offering
intangible assets.
Direction of “Rolling Plan 2019”
We will strongly commit to gaining “No. 1
Competitiveness in Respective Areas.”
management resources in the business fields where MOL
has strengths, which will mainly be offshore businesses,”
“Provision of ‘stress-free services,’ which MOL will offer
from the customer’s perspective,” and “Promotion of
of operations of ONE, we unfortunately posted a large deficit
LNG-based solutions will be the key to tackling issues
in the containership business. With that said, we were still
related to greenhouse gases and SOx, on the part of the
able to secure a net overall ordinary profit and profit
marine transport industry. In line with that, we achieved
attributable to owners of parent that were close to the initial
several milestones in fiscal 2018, including the LNG-fueled
environmental strategies and development of the emission-
forecasts, thanks to the steady accumulation of stable
tugboat ISHIN’s successful delivery and the conclusion of
free business into a core business.” Especially for
“Provision of ‘stress-free services,’ which MOL will offer
from the customer’s perspective,” we will remain dedicated
to thoroughly promoting such services. Some management
plans that I have seen seemed to lack consideration to what
profits from medium- to long-term contracts in the Dry
long-term charter contracts for LNG fuel supply vessels in
Bulk Business, Energy Transport Business, and other
Europe and Singapore. Looking into the future, we will
businesses, as well as the relatively strong market
further accelerate initiatives geared toward growth in this
conditions. The positive effect from the Business Structural
area so that our environmental and emission-free businesses
Reforms that we have implemented in the past also helped
become profitable enough to be considered as our valid
We developed “Rolling Plan 2019” by keeping the fundamental
is really useful for the customer. This comes from our
push up the results. I have gained a certain sense of
core businesses.
directions of the Rolling Plans of the past two years, but
tendency to focus on our competitors, which can cause us
refining it based on our analysis of the external environment
to lose sight of the essential perspective of our customers.
mentioned earlier, the needs of our stakeholders, and fields
Some think that providing “stress-free services” ultimately
accomplishment to see we have finally become a company
that can close its accounts without having to record a
significant extraordinary loss due to the negative legacy of
for growth. The major difference made this time was that
means differentiating, but that is not what we are aiming for.
the shipping boom in the 2000s.
out of the three elements we have thus far adopted in our
We want our customers to be impressed with our services,
management plans as the 10-year vision for the MOL Group,
and choose our services because of the fact that they are
we chose “Become a Group of Business Units with No. 1
truly useful. I wanted our management plan to clearly
Competitiveness in Respective Areas” as the element that
state the importance of seeing things from the perspective
best defines our vision. “No. 1 Competitiveness in Respective
of customers. We will therefore continue to position
Turning our attention to our 10-year vision, fiscal 2018
was a year in which we steadily laid the groundwork for
achieving it in each of our business fields. Regarding business
development, there were several significant achievements
made especially in our offshore businesses. In addition to
Focus Areas in Fiscal 2019
Through concentrated investment of resources,
we will further solidify our competitiveness
in respective areas.
Areas” is not limited to universal factors such as profitability,
“Provision of ‘stress-free services,’ which MOL will offer
FPSO, which is already established as a pillar for our profit
Our core growth strategies basically remain unchanged in
cost competitiveness, safety, or trust. It also includes com-
from the customer’s perspective” as an important pillar
accumulation, FSRU is also becoming another pillar, as can
fiscal 2019. Continuing on from the previous fiscal year, we
petitiveness unique to each business that can be the reason
of our management plans going forward.
be seen in the projects we are currently involved with.
will focus our investment in areas where we have strengths,
our customers and business partners choose to work with
us. Moreover, the concept of relativity to the competition is
something I place particular importance on. As we constantly
compete with other major players, simply claiming on our
own that we are No. 1 is rather meaningless. Winning or
losing in a competition boils down to how our services
compare with those of our competitors. Accordingly, we need
to always ask ourselves what specifically sets us apart from
others and whether or not we are actually doing better than
them. Ultimately, it is imperative that we secure a position
that allows us to remain one step ahead of the competition.
Witnessing this progress, I became convinced that offshore
such as offshore businesses, LNG carriers, chemical
businesses have the potential to serve as our core in the
tankers, and ferries, in order to further solidify our
future. As for “stress-free services,” one excellent example
competitiveness in these fields. Meanwhile, as a change
of our success in fiscal 2018 is the accumulation of long-
adopted under “Rolling Plan 2019,” we have positioned
term contracts using new-order wood chip carriers. This
offshore businesses as the leading key area in which we
was achieved through a thoughtful sales process that
will concentrate investment. Since I became president,
revolved around the customer’s point of view, meaning that
I have always been troubled by the fact that, for many years,
the frontline personnel deeply understood what solutions
we have been unable to clearly state what will be our next
our customers needed and when they needed them, which
main business pillar to replace the dry bulk business.
allowed our personnel to make the appropriate proposals.
However, in light of the progress we have made in fiscal
In regard to “develop environmental and emission-free
2018, and the confidence we have gained through it, I now
8
9
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Message from the CEO
can say that the offshore businesses can be the leading force
this does not happen again. To regain trust from our
burden on society. In relation to the latter, we set “Strategic
is the same. For example, it is a fact that marine transport
to drive the Company’s future. In developing offshore
customers, we have adopted as a focus area for fiscal 2019
actions for compliance with SOx regulations” as a focus
places a burden on the environment, and this is something
businesses, I strongly believe that the fact we are the only
“Development of Groupwide safety and quality management”
area for fiscal 2019, and are preparing for SOx regulations
that causes concern and stress for our customers. To real-
shipping company in Asia owning an FSRU appealed to our
and are working to further reinforce the safety of
that will tighten in January 2020. For our overall environ-
ize the significant concept of providing “stress-free ser-
customers. As a matter of fact, the range and potential of
our operations.
mental strategies, the newly established Environmental
vices,” it is essential that we—as a provider of marine
our businesses are growing significantly. What has been
For “ICT” and “Technological development,” we launched
Management Committee will take initiatives to develop and
transport services that support the core of our various
making this growth possible is our comprehensive
our first application, “Fleet Viewer,” in May 2019 under the
promote Companywide strategies.
customers’ value chains—both maximize the positive impact,
strengths, including our long-cultivated marine technical
FOCUS Project, which aims to utilize voyage and engine
In terms of “Workstyle reforms,” progress is being
which is the solutions we offer for environmental issues and
skills, technological capabilities, the relationships with
data of our vessels, and we plan to release another app
made centered on reforms to the workplace. In May 2019,
minimize the negative, which is our environmental burden. To
shipyards and other various partners, and so on. This is
around October 2019. We believe these apps will help us
a non-territorial office, which is a remodeled version of the
that end, the Sustainability Issues that we have adopted are
not something that others can easily imitate.
enhance the safety of our operations and avoid economic
fifth floor of our Head Office, opened for a trial. This is an
inseparable from the three core strategies we have estab-
Meanwhile, just because we do not consider a certain
losses by promptly discovering equipment abnormalities.
attempt to realize the ideal workstyle we target in our reforms.
lished under “Rolling Plan 2019.” By promoting
business a key area, it does not mean that we will not invest
Such technology will also play a key role in realizing auton-
Currently, the effectiveness of this pilot office is being examined.
a two-pronged approach of executing our management
resources in it. There are some businesses that we have yet
omous sailing. When it comes to tangible aspects within
This new office aims to revitalize communication and
plan and resolving our Sustainability Issues, we aim to
to call key areas but still actually hold great competitiveness.
our technological development, we are steadily making
promote creativity. I look forward to seeing how it will
maximize our social and corporate value over the medium
For other businesses where we have thus far been unable
progress in the area of LNG-fueled vessels, including the
improve productivity, which is one of the goals of
to long term.
to fully demonstrate our competitiveness, my intention is to
previously mentioned delivery of the LNG-fueled tugboat
“Workstyle reforms.“
have them improve their competitiveness. As we did with
ISHIN. In addition, our vessels received the Ship of the Year
the Structural Reforms in the Dry Bulker Business and the
award, which is given by the Japan Society of Naval
integration of the containership business, we will take
Architects and Ocean Engineers to vessels that are outstanding
action to increase our competitiveness in such areas so that
in terms of concept and design, for two consecutive years.
all our businesses can play a role in contributing to profits.
Our success with the ice-breaking vessels for the Yamal
And in case we ultimately see no progress or room for
LNG project is another example of our technological
improvement to obtain No. 1 competitiveness in a certain
advantage. I am proud of the high reputation we receive for
business, we in management will monitor it and examine
our technological capabilities. Following the lead of our
a wide range of options for dealing with it.
Technology Department, we will keep striving to spur logistics
innovations by anticipating the needs of customers as well as
society and refining our ICT and technological capabilities.
Turning to “environmental and emission-free businesses,”
we need to both capture new business opportunities as
explained earlier and further reduce our environmental
Fiscal 2019 Initiatives That Underpin
Our Management Policies
We will continue to work on our priority areas for
development and further evolve as a company.
To enhance the value we provide and realize “stress-free
services,” we will continue our efforts to strengthen our five
priority areas for development, which we have been adopting
since “Rolling Plan 2017.” Among them, what we value
above all else is the “Marine technical skills,” which is one
of the most important factors that supports our safe
operation. Having said this, however, an accident
regrettably occurred involving our cruise ship the NIPPON
MARU in fiscal 2018. In light of this, I would like to offer my
sincerest apologies for the trouble and worry we caused
our customers and all the parties concerned. At the same
time, I will promise we will strive to ensure an accident like
ESG Approach to Promote
Sustainability
MOL needs to tackle social issues head on through
fulfilling the essence of its business as a marine
transport company.
In Closing
We will steadily move forward with confidence
on the path we need to follow as a company.
As I mentioned earlier, in light of the rapid changes
In addition to formulating “Rolling Plan 2019,” we have also
occurring in the external environment, we will not be able
newly identified our Sustainability Issues (Materiality).
to offer our shareholders and other stakeholders expected
Looking at the recent trend of growing awareness and
returns by simply following our conventional business
importance of environmental, social, and governance (ESG)
model. I believe that our new management plan further
issues, we can tell that they are dramatically different from
clarifies the direction we need to head as a company going
the conventional thinking that calls for corporations to
forward while maintaining a proper awareness of our
realize a profit while also fulfilling their corporate social
current circumstances. Of course, we still need to flexibly
responsibilities (CSR). For example, Goal 1 of the SDGs is to
examine specific actions to take in response to the changing
“End poverty in all its forms everywhere.” To work on this
environment. However, I believe that “Rolling Plan 2019”
problem, we must consider what we can and should do as
provides a universal direction for us, and so we will steadily
a marine transport company to help eliminate poverty.
proceed in that direction with confidence. I will take
We must earnestly verify the essential value of our business
the lead with a strong belief that MOL, as a solutions
itself to ensure that we are playing a useful part in
provider for all matters related to maritime affairs centering
addressing this issue. It is for that reason that we placed
on marine transport, can provide “stress-free services” to
“Value-added transport services” as the first one among our
our customers and “Become a Group of Business Units with
Sustainability Issues. I believe that tackling issues related to
No. 1 Competitiveness in Respective Areas.” I would like to
SDGs or ESG head on through our business itself is the
ask our shareholders and all stakeholders for their continued
approach we need to take in order to further improve our
understanding and support as we pursue these endeavors.
corporate value.
That was an example on poverty or the economy, but our
basic approach to other themes such as the environment
10
11
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of the Management Plan “Rolling Plan 2019”
Road Map toward Improving Business Performance
We have been adopting rolling-type management plans since fiscal 2017. With “Rolling Plan 2019,”
we worked to create a management plan that is clear and can gain the support of our stakeholders.
Based on our recognition of the current situation, including changes in the external environment, we
formulated our 10-year vision to “Become a Group of Business Units with No. 1 Competitiveness in
Respective Areas” as well as the three core strategies that we will promote to realize this vision.
10-Year Vision
Become a Group of Business Units with
No. 1 Competitiveness in Respective Areas
Three Core Strategies to Realize the 10-Year Vision
1
2
3
Concentrated investment of
management resources in the
business fields where MOL
has strengths, which will
mainly be offshore businesses
Provision of “stress-free
services,” which MOL will
offer from the customer’s
perspective
Promotion of environmental
strategies and development of
the emission-free business
into a core business
To maintain our competitiveness
and ensure solid returns, we pref-
erentially allocate management
resources in fields where we have
strengths.
P14
Continuing on from fiscal 2017, we will promote efforts in our
priority areas for development. We will also pursue a variety
of initiatives through the two additional focus areas for
fiscal 2019 of “Development of Groupwide safety and quality
management” and “Strategic actions for compliance with
SOx regulations.”
P16
Recognition of Our Current Situation
In the near future, we will almost certainly face difficulties in keeping appropriate
and stable returns through conventional marine transport alone.
Changes in the External Environment
• Changes in trade patterns due to expanding protectionism, stagnation in seaborne trade
• Slowdown of the global economy
• Fleet supply pressure due to excess shipbuilding capabilities in China and South Korea
• Shift to a decarbonized society
etc.
With the aim of realizing our medium- to long-term profit and
business integration. Through these efforts, we aim to achieve
financial targets shown below, we have broken down our ordinary
our target levels for ordinary profit.
profit into two classifications, “highly stable profits” and “other
variable profits (losses),” according to the differences in profit
structure. While continuing efforts to accumulate highly stable
profits, we have reorganized the fleet to a more competitive one
that is resistant to market fluctuations in order to secure other
variable profits. In this way, we transformed our business model
to be able to secure profits regardless of the market environment
(please see the column below).
As a result, in fiscal 2018, although we recorded an ordinary
loss of ¥14.3 billion in the Containership segment due mainly to
the impact of confusion regarding the start of operations of
the integrated company Ocean Network Express (ONE), we were
able to record ordinary profit from other businesses of ¥52.8
billion, thanks to the stable profits generated primarily in the Dry
Bulk and Energy Transport businesses and the relatively
favorable market condition. This indicates that we have steadily
transitioned to a business structure that can achieve solid returns
no matter what the conditions of the market may be.
As we move forward, we will prioritize the allocation of
resources into businesses and projects where the MOL Group
boasts strengths with a view to generating highly stable profits.
At the same time, we will work on improving other variable profits,
a recently difficult task, in such ways as bringing ONE into the
black, leveraging its competitiveness bolstered through the
Medium- to Long-Term Profit Levels and Financial Indicators
Vision for profit levels over
the medium term
Fiscal 2027 Targets
Ordinary profit
ROE
Gearing ratio
¥80.0 billion–
¥100.0 billion
8–12%
2.0 times or less
¥150.0 billion–
¥200.0 billion
—
1.0 times
Ordinary Profit Forecasts
(¥ billion)
100
Projected medium-term levels
¥80.0 billion–¥100.0 billion
80
60
40
20
0
-20
¥38.5
billion
¥50.0
billion
56.2
55.5
58.0
65.0
Transitional costs related to containership
business integration
FY2018
Results
FY2019
Forecasts
FY2020
Plan
FY2021
Plan
Exchange rate
assumption
¥110.63/US$1
¥110.00/US$1
¥110.00/US$1
¥110.00/US$1
Highly stable profits (concluded contracts)
Highly stable profits (to be acquired)
Other variable profits
Highly stable profits +
Other variable profits
(losses)
= Ordinary profit (total)
Highly stable profits: Dry bulkers / Tankers (under medium-
to long-term contracts), LNG carriers / Offshore businesses,
and Associated businesses
Other variable profits (losses): Dry bulkers / Tankers (under
short-term / spot business), Car carriers, Containerships,
Terminals & Logistics, and Ferries & Coastal RoRo ships
Shareholder Returns
Set a 20% dividend payout ratio as a guideline in the
near term and work to improve this ratio over the
medium to long term.
Transition to a More Competitive Fleet Composition Highly Resistant to Market Fluctuations
In the Dry Bulk Business Unit, which has an enormous presence in our
business portfolio, the market plummeted to record-low levels after the
2008 financial crisis as the balance between supply and demand col-
lapsed due to the supply glut of new vessels. These severe conditions
continued over the long term. Under these circumstances, a large
number of vessels in the business unit became unprofitable because of
the high and rigid cost structure. Accordingly, the Dry Bulk Business Unit
had become a major factor behind our sluggish business performance
in the mid-2010s. Instead of just waiting for market recovery, we took
proactive actions to improve profitability. In fiscal 2015, we implemented
the Business Structural Reforms that involved sweeping actions to
eliminate unprofitable vessels primarily in the Dry Bulk Business Unit.
Although these reforms led to significant loss on the sale of vessels and
losses associated with the cancellation of charter contracts, they allowed
the business unit to successfully transition to a business model that can
generate stable profits regardless of movements in the spot market.
Reducing Market Exposure within the Dry Bulk Fleet
Implementation of the Business Structural Reforms
Fiscal 2015
year-end
Fiscal 2016
year-end
Fiscal 2017
year-end
Fiscal 2018
year-end
45
46
46
43
12
27
27
21
33
49
20
31
(%)
Owned or medium- and long-term chartered vessels with medium- and
long-term contracts
Owned or medium- and long-term chartered vessels with short-term
contracts (market exposure)
Short-term chartered vessels with short-term contracts
12
13
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of the “Rolling Plan 2019” Management Plan
Concentrated investment of management resources in the business
fields where MOL has strengths, which will mainly be offshore businesses
Characteristics of the MOL Group’s Business Portfolio
One of the World’s Largest Full-Line Marine Transport Groups with a Highly Diversified Business Portfolio
• Unique business model that develops a wide range of highly competitive businesses as a group
• The Group’s comprehensive strengths that enable the provision of one-stop solutions to the various
transportation needs of customers
• Reduced market risks by a highly diversified business portfolio
• Accumulated marine technical skills and insights through horizontal expansion into various businesses
Highly specialized*
Strategic Fields for Resource Allocation—Fields Where MOL Has Strength
Environmental and
Emission-free
Businesses
Chemical Tankers
NVOCC
Business
LPG
Tankers
Ferries &
Coastal
RoRo Ships
LNG Carriers
Offshore
Businesses
Terminal
Business
Logistics
Business
Iron Ore & Coal
Carriers
Real Estate
Business
Crude Oil Tankers
Methanol
Tankers
Wood Chip
Carriers
Steaming
Coal
Carriers
Stable profits
Maritime
Affairs
Variable profits
Car Carriers
Containerships
Bulk
Carriers
Product
Tankers
Less specialized*
• The size of the circle indicates the
total amount of assets used (as of
September 30, 2018).
• Dotted lines show directions and
scale at which MOL is aiming.
* In plotting the vertical axis (from
highly to less specialized), each
business was considered compre-
hensively after taking into account
the perspectives listed below.
• MOL’s relative competitiveness
• Versatility of vessel type
• Niche or mass market
• Competitive environment
Concentrated Investment of Management Resources to Further Enhance Our Strengths
Offshore Businesses
LNG Carriers
FPSO, FSRU, Powership businesses, etc.,
where the knowledge and experience MOL
has accumulated in LNG and energy
transport can be applied to address envi-
ronmental and emerging market needs
High-value-added, highly difficult LNG
transport and handling businesses
based on track records in areas such as
operation of ice-breaking vessels
Chemical Tankers
Ferries
Total logistics business for liquid
chemicals, not limited to ocean
transport by tankers
Development of a cutting-edge ferry
fleet, capitalizing on increasing demand
caused by the modal shift
Policy on the Allocation of Management Resources
To establish an optimal business portfolio that enables sustain-
management resources into target fields. Under “Rolling Plan
able growth, we analyze and evaluate all of our businesses
2019,” we have clarified our intention to primarily invest man-
periodically from two perspectives: the stability of profits and
agement resources into fields centered on offshore businesses
competitiveness compared with other companies. Based on
where we can demonstrate our strengths.
this analysis and evaluation, we are strategically allocating
Strategy by Business
In terms of our respective business strategies, while taking
No. 1 Competitiveness in Respective Areas,” we will
into account changes in the external environment, we have
further enhance the strengths of each business and accelerate
determined the following strategies for achieving growth by
initiatives to promote “stress-free services” that are truly
leveraging the strengths of each business to their fullest. To
convenient for customers.
realize our vision to “Become a Group of Business Units with
Business
Dry Bulk Business
Strategies for Growth
Dry Bulkers
Provide services based on customer needs such as solutions for environmental issues, etc.
Energy Transport Business
Tankers
LNG Carriers
Product tankers:
Utilize a tanker pool to maintain service network while reducing market
exposure and to ensure fee-based revenue
Chemical tankers: Become a total logistics solutions provider for liquid chemicals by actively
expanding business domains vertically
Expand businesses in high-value-added fields where we can leverage our track record as
an industry leader and vast insight
Expand the LNG bunker fuel supply business
Offshore Businesses
Collaborate with companies that have the top position in each field and local partners with a
massive regional presence
Steaming Coal
Carriers
Build and introduce next-generation steaming coal carriers that offer benefits to
customers in respect to safety, efficiency, and environmental performance, etc.
Product Transport Business
Car Carriers
Reorganize service network with an emphasis on operational profitability while making
the most of the cost competitiveness of the fleet
Containerships
Swift turn to profitability for ONE by optimizing cargo and service portfolio and generating
synergistic effects of business integration
Logistics
Develop asset-light businesses
Ferries
Capture demand through steady fleet expansion
Associated
Businesses
Tugboats: Promote efforts toward new technologies and overseas businesses
Real Estate: Actively develop overseas businesses
Please see the “Overview of Operations by Segment” section on pages 58–69 for details on progress.
14
15
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Overview of the “Rolling Plan 2019” Management Plan
Enhancing Management Resources That Support Business Plans
Progress Made under “Rolling Plan 2018”
Priority Areas for Development and Focus Areas for Fiscal 2019
To realize “stress-free services” that are truly convenient for
safety and quality management” and “Strategic actions for
customers, we have set our priority areas for development
compliance with SOx regulations.” We will strive to improve our
where we will work on a Companywide level. Under “Rolling
service quality and, by doing so, enhance the relative competi-
Plan 2019,” we have additionally established two new focus
tiveness of our overall businesses going forward.
areas for fiscal 2019. These are “Development of Groupwide
Priority Areas for Development (Continuing from fiscal 2017)
Marine Technical Skills
Thoroughly enforce safe operations that underpin high-quality transportation and work to further
improve ship management quality
ICT
Develop underlying technologies for autonomous sailing and promote the FOCUS Project
which aims to utilize the huge amount of data collected from operating vessels
,
Technological Development
Promote the construction of LNG-fueled vessels, etc.
Environmental and
Emission-Free Business
Promote the LNG fuel supply business as well as studies and research on alternative fuels
Establish a driving force within the Group to promote environmental management (Environmental
Management Committee created on April 1, 2019 as an organization under the Executive Committee)
Workstyle Reforms
Promote workplace reforms
FOCUS Project
Workplace Reforms
The FOCUS Project aims to further enhance safe operation and
reduce environmental burden by utilizing a vast number of onboard
sensors to collect, thoroughly monitor, and analyze voyage and
engine data from roughly 150 Company vessels under navigation.
In May 2019, a newly established pilot office was
opened on the fifth floor of our Head Office. Benefits
of this pilot office are going to be studied in an effort
to realize the workstyles we aim for.
Development of Groupwide
Safety and Quality Management
Visualize the status of Groupwide safety and quality
Improve Groupwide safety awareness and take specific measures
Focus Areas for Fiscal 2019
Strategic Actions for Compliance
with SOx Regulations
Take actions on a Groupwide basis in order to enable MOL-operated vessels to switch fuels safely
and economically
Examine the effects of compliant oil on vessel performance in order to prevent any technical
problems that may arise
Please see the “Addressing Sustainability Issues” section on pages 26–41 for the progress of each initiative.
Identifying Sustainability Issues Linked to Our Rolling Plans
Year by year, the approach toward environmental and social
linked with our rolling plans. We will strive to respond to these
issues is having a greater impact on a company’s management
issues simultaneously with the strategies we have adopted under
and corporate value. To continue to be a corporate group that can
“Rolling Plan 2019,” as represented by environmental and
understand and meet the latent needs of customers and society
emission-free businesses. In doing so, we will try to maximize
in any time and accelerate the realization of our 10-year vision,
both our economic and social value.
we have identified Sustainability Issues (Materiality) that are
MOL’s Sustainability Issues (Materiality)
Value-added transport services
Marine and global environmental conservation
Innovation for development in marine technology
Human resource cultivation and community development
Governance and compliance to support businesses
Maximizing our
economic and
social value through
efforts to address
these issues
Leveraging Our Experience in Handling LNG and Operating FSRUs to Participate in the LNG-to-Powership Business
In March 2019, we formed a partnership with Karpower
stable profits, we will also work to strengthen the relative
International B.V.* in the LNG-to-Powership business. Under
competitiveness of our overall offshore businesses by acquiring
the brand name KARMOL, we are carrying out joint investment
know-how through the provision of total solutions throughout
and business activities related to the Powership business so
the LNG value chain, from LNG transport to regasification and
that we can become the world’s most reliable LNG-to-Powership
power generation.
solutions provider.
We are currently in the middle of converting an LNG carrier
In the KARMOL brand LNG-to-Powership business, gas
into an FSRU that supplies gas to the powership. Going forward,
used as fuel will be supplied to the powership from an FSRU.
we will jointly promote projects under the KARMOL brand and
The electricity generated by the powership will then be stably
work to provide competitive energy solutions in a wide range of
provided to shore grids and facilities. Leveraging our long-
regions with growing energy demand. In these ways, we aim to
accumulated track record and expertise involving LNG carriers
establish a solid track record over the next several years.
* Karpower International B.V. is the core company involved in the Powership busi-
ness under Karadeniz Holdings established in Turkey in 1948.
and FSRU businesses and Karpower’s insight on the construction,
maintenance, and operation of powerships, which the company
has cultivated as a pioneer in this business area, we aim to
address the growing demand for electric power, primarily in
emerging countries, through providing solutions that offer high
added value in terms of cost competitiveness and low environ-
mental impact.
We have positioned offshore businesses as a priority area
for the investment of management resources in order to make
use of our strengths to realize sustainable growth. With this new
LNG-to-Powership business, not only will we aim to accumulate
Powership owned by Karpower
Accelerating the Evolution into a Total Logistics Provider for Liquid Chemicals
Our Group company for the chemical tanker business, the wholly
a global logistics company that operates businesses centered on
owned subsidiary MOL Chemical Tankers Pte. Ltd., took several
the transportation of liquid chemicals and gases by tank
actions in fiscal 2018 with the aim of transforming itself into
containers within Europe and all over the world.
a total logistics provider for liquid chemicals.
Through these actions, MOL Chemical Tankers will strive to
First, in September 2018, MOL Chemical Tankers established
gain access to new customers while aiming to realize services that
SEA-MOL NV, a joint venture with the Belgian terminal company
meet the diverse transport needs of customers, such as stream-
SEA-Tank Terminal Antwerp NV, with a view to participating in
lining of transportation flow utilizing tank terminals as a hub and
the tank terminal business. SEA-MOL is planning the construction
small-lot transport via containers. At the same time, the company
of a liquid chemical storage terminal in the Port of Antwerp.
will work to generate synergies within the MOL Group from a broad
This terminal will allow for connections between a diverse range
range of perspectives, such as making use of human resources
of transportation means and serve as a hub for customers.
with expertise in the tank container and tank terminal businesses.
In January 2019, MOL Chemical Tankers acquired 100% of
shares in a Danish chemical tanker operator, Nordic Tankers A/S.
Through this acquisition, the company is now able to expand its
global service network by incorporating the operational foundation
of Nordic Tankers, which boasts strengths in the Atlantic Ocean
and in South America. This in turn will allow the company to
Overview of the Transition into
a Total Logistics Provider for Liquid Chemicals
• Expansion of global service network
Acquisition of Nordic Tankers
further extend its presence, which it has already firmly established
• Response to diversifying demand for liquid chemical transport
in its core Pacific Ocean routes as well as routes between
Participation in tank container business
the Middle East and Asia.
Furthermore, in February 2019 MOL Chemical Tankers
acquired a 20% share in the Dutch tank container transport
company Den Hartogh Holding B.V. and subsequently concluded
a collaborative business partnership agreement. Den Hartogh is
• Vertical expansion in the supply chain
Entrance into the tank terminal business
MOL commenced operations of its first Arc7-class ice-breaking LNG carrier for the Yamal LNG project.
Please see “Special Feature” on pages 20–25 for details.
16
17
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Message from the CFO
Takashi Maruyama
Senior Managing Executive Officer
Road Map for Improving Profit
Our basic strategy is to steadily accumulate “highly stable
¥80.0 billion and ¥100.0 billion and return on equity (ROE) of
profits” while securing “other variable profits.” As for highly
between 8% and 12% are more than achievable.
stable profits, which are generated by long-term contracts
lasting two years or more, we are projecting increases to ¥55.5
billion, ¥58.0 billion, and ¥65.0 billion, in fiscal 2019, fiscal
2020, and fiscal 2021, respectively. These increases will represent
the result of our aggressive efforts to invest in LNG carriers
and offshore businesses since the mid-2010s. With regard to
other variable profits (losses), we regrettably posted a deficit in
fiscal 2018 due to the impact of operational teething issues
during the start-up period at the integrated containership
business company, ONE. However, in fiscal 2019, ONE will turn
profitable and with this turnaround we expect to see nearly
balanced profits and losses on a basis that excludes the general
management expenses of the Head Office. From fiscal 2020,
we anticipate a return to the black. Accordingly, we believe that
our medium-term target for ordinary profit levels of between
Ordinary Profit Forecasts
(¥ billion)
100
Projected medium-term levels
¥80.0 billion–¥100.0 billion
80
60
40
20
0
-20
¥38.5
billion
¥50.0
billion
56.2
55.5
58.0
65.0
Transitional costs related to containership
business integration
FY2018
Results
FY2019
Forecasts
Highly stable profits (concluded contracts)
Other variable profits (losses)
FY2020
Plan
FY2021
Plan
Highly stable profits (to be acquired)
Financial Strategy for “Rolling Plan 2019”
A stable financial foundation is essential to achieving our
fiscal 2018 was 2.11 times). In fiscal 2019, we plan to execute
10-year vision of “Become a Group of Business Units with
investment totaling net cash outflows of ¥135.0 billion,
Recently, institutional investors have been asking more often
In order to capitalize on the heightened global awareness
No. 1 Competitiveness in Respective Areas” under our
primarily in LNG carriers and offshore businesses. While
about our efforts toward achieving the SDGs. Since ancient
of the SDGs from a financing perspective, we issued Green
“Rolling Plan.” For this to happen, we need to be able to
we anticipate negative free cash flow, we are striving not to
times, the transport of goods by ship has enriched people’s
Bonds totaling ¥10.0 billion. These bonds are issued to
continuously invest in businesses where we have a competitive
increase our interest-bearing debt. With this goal in mind,
lives. Even now, at the height of e-commerce, ocean shipping,
institutional and individual investors for the sole purpose of
advantage, first and foremost in our offshore businesses but
we rigorously select projects for investment using in-house
which involves physical transport, is irreplaceable in the
funding environment-related projects. The issuing of Green
also in LNG carriers, chemical tankers, and ferries and
indicators that give consideration to capital costs and combine
global consumer economy. The fact that the Company has
Bonds to individual investors was unprecedented for a
coastal RoRo ships. A stable financial foundation also provides
various methods to minimize the balance sheet burden,
been able to operate its businesses over 130 years is the
Japanese company, and with this new opportunity, we
us with enough credibility to guarantee the steady execution
such as the sale of assets including stock cross-holdings,
result of its importance to the global economy as an artery of
received a high rate of applications for the purchase. We will
of long-term contracts, which can sometimes span over the
the sale and lease-back of vessels, the utilization of
logistics. At the same time, it is undeniable that the marine
continue to utilize Green Bonds not only as a way to meet the
course of 20 years or more, for the purpose of accumulating
secondhand vessels, and project financing. This approach
transport industry places a burden on the global environment,
needs of investors who wish to contribute to the environment
our priority—“highly stable profits.” Likewise, to offer our
has been received positively, allowing us to maintain a BBB
including the emission of CO2 into the atmosphere from the
and a better society but also as a tool for diversifying our
customers competitive freight and charter rates, it is
(stable) rating from Rating and Investment Information, Inc.
consumption of fuel. With this reality, the industry has become
fund-raising methods. On the back of this response, we plan
imperative that we procure funds under more favorable
(R&I) and an A- rating from Japan Credit Rating Agency, Ltd.
increasingly concerned in recent years about contributing to
to issue Sustainability Bonds in fiscal 2019, which will provide
conditions than our competitors. Accordingly, although our
(JCR). In addition, our approach has garnered the support of
environmental preservation. The strengthening of SOx
financing for projects that address issues related to the SDGs.
investment appetite is strong, we are practicing financial
a broad range of financial institutions, including megabanks,
regulations reflects this trend. Meanwhile, we believe that we
I firmly believe that a company cannot pursue business
discipline while aiming for a gearing ratio of 2.0 times or
regional banks, government-affiliated financial agencies, and
can do more to help reduce the negative impact on the global
over the long term without providing value to society. As a
Our Role as a Crucial Member of Society
less over the medium-term (the gearing ratio at the end of
foreign banks.
Cash Flows
(¥ billion)
-150
(¥ billion)
150
2,000
-135.0
-126.2
-100.8
98.3
-100
-50
0
75.0
55.2
1,500
1,000
100
50
0
FY2017
Results
FY2018
Results
FY2019
Forecasts
Cash flows from investing activities (left)
Cash flows from operating activities (right)
Cash flows from investing activities in fiscal 2018 does not
include amount invested in ONE.
Outlook for Cash Flows from Investing Activities in Fiscal 2019
(New projects internally approved for investment and potential investment projects)
Environment / IT / Others
2%
Other Vessels
12%
Ferries / Associated Businesses /
Terminals & Logistics
19%
¥135.0
billion
LNG Carriers
44%
Offshore
Businesses
23%
Increase investment in offshore businesses
Continue to carefully examine and select projects for investment
environment than simply complying with regulations. For
global ocean shipping company, we will fulfill our role as a
example, we can play a greater role through providing
lifeline for people around the world while working to lessen
solutions that meet our customers’ needs related to
the burden on the global environment. Through these efforts,
environmental countermeasures and supplying clean energy,
as a crucial member of society we hope to gain the support of all
which we will develop as new businesses. While still small
our stakeholders, including our most valued—our customers.
in scale, we have begun efforts toward the LNG bunker fuel
supply business, participated in the offshore wind power
Intended Use of Green Bond Funds
generation facilities business, introduced LNG-fueled
tugboats, and entered into the LNG-to-Powership business.
In these ways, we are starting to see the fruits of our
efforts in a wide range of environmental fields that we have
been pursuing.
Project Name
Ballast water treatment systems
SOx scrubbers
LNG bunkering vessels
LNG-fueled vessels (tugboats)
New PBCF
Total
Amount (¥ billion)
5.5
2.2
1.4
0.7
0.2
10.0
18
19
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Special Feature
MOL Opens Up a New Sea Route for LNG Trade
―Joining the Yamal LNG Project
The Yamal LNG is a project that ambitiously makes use of the world’s first Arc7 class ice-breaking LNG carriers to
transport liquefied natural gas (LNG) from the plant in Russia’s Yamal Peninsula to markets around the world. The project
continues to run smoothly, with our first of three vessels having been in operation over a year since March 2018, and the
second one since October of the same year.
This section will describe the MOL Group’s bold venture into unknown territory, namely, entering the Northern Sea
Route for LNG transport.
Potentiality of the Arctic
The Yamal LNG Project
The LNG Transport Route from Yamal
Due to growing concern over global warming, more emphasis
The Yamal LNG project is a large-scale LNG production and
is being placed on natural gas as a source of clean energy. As
export project jointly owned by Russia-based Novatek, France-
a result, worldwide demand for LNG is on the rise. Although
based Total, and China-based China National Petroleum
roughly 30% of the world’s undiscovered natural gas reserves
Corporation (CNPC). The project, which began operations in
are said to lie beneath the Arctic Circle, the lack of proper
December 2017, enabled year-round LNG transport from
means of transport has limited the full use of these
Russia’s Yamal Peninsula to markets around the world by
resources. The Yamal LNG project became the first one to
utilizing the world’s first Arc7* class ice-breaking LNG carriers.
break through this situation.
LNG production capacity of
Yamal and other Novatek-
related LNG projects
18.0 million tons
16.5 million tons
Leveraging our expertise of LNG carriers garnered from years
of experience, we signed a long-term charter contracts for
three Arc7 class ice-breaking LNG carriers and four conven-
tional-type LNG carriers, and are now responsible for part of
the overseas shipping for the project.
* Ice-breaking and ice-resistant carriers are assigned an “ice class” based on
their ice-breaking capabilities and degree of ice resistance as determined by
hull strength and onboard equipment. There are nine classes determined by
the Russian Maritime Register of Shipping: Ice1 to Ice3 and Arc4 to Arc9, with
higher numbers denoting higher ice-breaking capabilities and a higher degree
of ice resistance.
5.5 million tons
2017
2018
2019
Yamal LNG Project
Operator
Production timeline
Production volume
| Yamal LNG
| Train 1: 2017
Train 3: 2018
| 17.4 million tons/year (3 trains of 5.5 million tons plus 1
Train 2: 2018
Train 4: 2019
train of 0.9 tons)
Transport
| Ice-breaking LNG carriers (Ice class Arc7): 15 (including three
co-owned by MOL and China COSCO Shipping)
| Conventional-type LNG carriers: 11 (including four co-
owned by MOL and China COSCO Shipping)
The most defining characteristic of the marine transport aspect
and the Suez Canal, is now possible in a considerably shorter
of the Yamal LNG project is the use of Arc7 class ice-breaking
time period of about 15 days by navigating eastbound.
carriers to open up the Northern Sea Route for LNG transport.
Establishment of the Northern Sea Route for LNG transport
High-spec ice-breaking carriers made it possible to pass
has major merits, including a significant reduction in CO2
through thick-ice eastbound sea routes in the summer, in
emissions and lower transport costs, both a result of the
addition to year-round use of the westbound sea routes where
shorter passage.
the ice is relatively thin. Most importantly, transport to East
Asia, which requires 35 days going westbound through Europe
To Asia
(Winter / Passage
through Suez Canal)
To Europe (All-year)
Arctic Ocean
To Asia
(Summer / Northern Sea Route)
Yamal LNG base (Sabetta port, Russia)
Merits of the Northern Sea Route
As compared to the westbound sea route
Time at sea reduced
by approx.
CO2 emissions
reduced by approx.
20days
30%
Increased safety
from foregoing
areas frequented
by pirates
20
21
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Special Feature
July 2014
June 2017
December 2017
March 2018
July 2018
October 2018
November 2018
August 2019
End of 2019–
End of 2020
Project Timeline
MOL signs long-term
charter contracts and
shipbuilding contracts
for three new
ice-breaking LNG
carriers
MOL signs long-term
charter contracts and
shipbuilding contracts
for four conventional-
type LNG carriers
MOL’s first ice-
breaking LNG carrier
christened the
VLADIMIR RUSANOV
The VLADIMIR RUSANOV
conducts first loading
operation at Sabetta port
The VLADIMIR RUSANOV completes
eastern transit via the Northern Sea
Route, a much shorter passage than
the route through the Suez Canal
The VLADIMIR VIZE,
MOL’s second ice-
breaking LNG carrier,
begins operation
The VLADIMIR
RUSANOV completes
its first Ship-to-Ship
LNG Transfer*
operation
Scheduled
completion of
MOL’s third
ice-breaking
LNG carrier
Scheduled
completion
of MOL’s four
conventional-
type LNG
carriers
Entering the Unchallenged Route
The Yamal Peninsula, which means “the end of the world” in
Crew training was another issue. Navigation through polar waters
requires compliance with the Polar Code,* which includes requisite
the local language, is an extremely cold land with air tempera-
training for crew members. At that time, none of our seafarers had
tures reaching -60°C in winter. The key issue was how to
polar sailing experience. Therefore, with the help of the outside
facilitate year-round transport of LNG from this place closed
partners, we had them complete special training from scratch.
off by permafrost to Asia and Europe.
Financing brought its own set of challenges. After concluding
The revolutionary project that solved this crucial issue
the shipbuilding agreement, sanctions against Russia were tightened,
really began picking up steam in 2011. In 2013, Novatek, Total,
which forced us to adopt a different funding structure than we
and CNPC teamed up to materialize the plan of exporting LNG
initially planned. However, we were able to achieve it by utilizing our
from a base at Sabetta port in the Eastern Yamal Peninsula.
deep well of financing experience across a range of projects.
They called out for international marine transport companies
It was our experience, expertise, and partnerships, accumulated
who were willing to take part in the project. Due to the staggering
through our many years of taking on challenges, that enabled us to
amount of technical difficulty compounded by the political risks
overcome these various obstacles. Without a doubt, the success in
attached to the project, some companies were hesitant to be
this project was the fruit of our comprehensive capability as a
involved, but we, based on risk assessments honed over many
marine transport company.
years of business, judged that it was manageable. Ultimately, it
In December 2017, construction of our first ship was completed.
was determined that a joint venture of MOL and China COSCO
The ship was christened the VLADIMIR RUSANOV, after the early
Shipping would own and operate three out of the 15 ice-breaking
20th century Russian Arctic explorer and geologist. With the same
LNG carriers committed to the project, and accordingly
trailblazing energy of its namesake, the VLADIMIR RUSANOV
shipbuilding orders for these ships were placed with Daewoo
began operation in the Arctic Ocean in March 2018.
Shipbuilding & Marine Engineering Co., Ltd in 2014. Out of all
the marine transport companies in Japan, we were the only one
* International standards adopted by the International Maritime Organization (IMO)
to ensure ship safety and environmental conservation for vessels navigating
through polar waters.
participating in this project.
Overcoming Obstacles with Comprehensive Strength
from Years of Experience
We faced a variety of obstacles in executing this unprecedented
Applying Accumulated Expertise to Bigger Challenges
Since the beginning of operation over one year ago, the
VLADIMIR RUSANOV has been keeping good working order with
project, such as construction of special ships, training of the crew,
no major trouble, and has been accumulating new accomplish-
and financing. For the ship construction, this project required the world’s
ments. Further progress is on the horizon, with our second ship
first LNG carriers capable of breaking through ice up to 2.1-meters
having begun operation last year, and the third one set for
thick on its own, without the assistance of a separate ice-breaking ship.
completion this summer. At the same time, this opens up
Because LNG carriers must keep and carry LNG at -162°C in their
opportunities for us to apply the expertise acquired from the
tanks, even conventional-type ones require a particularly high level of
Yamal LNG project to other areas in the Arctic Ocean in addition
technical prowess and safety measures compared to other merchant
to Russia, such as Canada or the coast of Alaska, that have
ships. To construct a ship with specifications required to withstand
also been confirmed to contain an abundance of resources.
the harsh environment of the Arctic Ocean, even more careful and
The Yamal LNG project was a challenge that took us into
complicated steps have to be taken. To this end, all parties involved,
uncharted territory. With this accomplishment, we have cleared
including the shipyard, worked together from the planning stage to
the path for new possibilities. Leveraging the experience
thoroughly uncover all possible risks. From there, we solved each
acquired from this project, we will keep driving forward as one
issue through repeated trial and error, examining things from
different angles, for everything from the materials to structure.
of the world’s leading marine transport companies.
20–30 year long-term contracts for a total increase of ¥100 billion in ordinary income
* A transfer of cargo between two ships positioned alongside each other
Tackling the Northern Sea Route
To execute a project amid the cruel environment of the Arctic Ocean, some special specifica-
tions had to be installed to the ships and specialized training for the crew had to be arranged.
Below are some examples of such preparations.
Special Specifications for the Ships
Specialized Training for Navigating the Northern Sea Route
Double-Acting Ice-Breaking System
One important feature of the ice-breaking LNG
carriers to ensure safe and unfailing navigation,
even through the thick ice covering the waters of
the Arctic Ocean, is the “double-acting ice-break-
ing system.”
Typically, the ship will navigate ahead through
open water and thin ice, but when facing thick ice,
it will turn 180° using the double-acting ice-break-
ing system and proceed astern (backwards). By
going astern, it can navigate through thicker ice up
to 2.1 meters, as opposed to 1.5 meters with the
bow ahead, because the stern is heavier and its
shape is better suited for breaking ice. This is the
first time that this technology has been adopted in
an LNG carrier, and it plays an important role in
the safe operation of the ship.
The Polar Code, a set of international standards for shipping in polar
regions, is set in place to ensure ship safety and environmental
conservation. As we place the highest priority on safety measures for
our ship crew, we give training to a broader range of crew members,
not just the ones required by the code. Below are a few examples of
such training.
On-Land Training for Icy Waters
At the Makarov Training Centre and Sovcomflot Training Centre in St.
Petersburg, Russia, crew members acquire essential knowledge for
ice navigation, including the characteristics of ice, and usage of ice
charts. In addition, crew complete a practical training program for ice
navigation maneuvers utilizing simulators at these facilities.
At-Sea Training for Icy Waters
The Polar Code requires that captains and first officers have a mini-
mum of two months of experience aboard a vessel operating in a
polar region. We managed to meet this requirement thanks to the
cooperation from other companies. Our captains and first officers
were given the opportunity to board ships transporting modules and
materials for construction of the LNG plant in Sabetta of the Yamal
LNG project, which were operated by two Dutch module ship and
heavy carrier operating companies, and also atomic ice-breaking
ships operated by Russian State shipping company Atomflot.
22
23
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Special Feature
“This Groundbreaking Project Would Not Have Succeeded without the Hard Work of All Its Crew Members.”
“There Is a Feeling That We Are Making History at This Very Moment.”
To lead the world’s first ice-breaking LNG carrier project to
success, we had to make careful preparations for navigating
through a harsh natural environment and operating Arc7
ice-breaking LNG carriers. We had to complete not only ice
navigation training as required by the Polar Code but also
training for operating a type of propulsion engine with
which the Company had no previous experience.
Training programs varied from those using
simulators to numerous on-site ice naviga-
tion training programs at sea. All in all, the
thorough preparation spanned two and a
half years.
The VLADIMIR RUSANOV is an ice-
breaking LNG carrier that is equipped with
outstanding specifications for adapting to
severe environments and ensuring safety.
Still, there are hardships that you only experi-
ence during the actual voyages. As we continued
to take on new challenges such as ice trials,
eastward sailing to Asia, and Ship-to-Ship LNG Transfer operation,
we occasionally faced extreme bad weather and ocean conditions.
However, thanks to our well-trained crew members who came
together to fulfill their duties and the well-designed special
equipment onboard such as ice radars, we managed to overcome
these challenges. Overall, these voyages were extremely
meaningful experience in which we were able to utilize
and confirm the effectiveness of our training and
the proper functionality of the equipment
aboard the vessel.
In closing, I am extremely proud of
the fact that I was able to fulfill my
duties as a member of this exceptionally
challenging and groundbreaking project.
The success of the voyage is the direct
result of the hard work and efforts of all
crew members involved.
Robert G Valentine
Master / VLADIMIR RUSANOV
“The Project Progressed Smoothly Because We Dealt With Problems before They Appeared.”
Over its first year, the VLADIMIR RUSANOV provided service
continuously without halting operations once. This gives me
confidence that the project is progressing well. In order to
complete construction of this new type of ship on-schedule
and according to the required specifications, we held risk
assessment meetings with all parties involved, including the
shipyard. Starting with the designing stage, we went over
every aspect with a fine-tooth comb to figure out the potential
risks and their countermeasures. By doing this, we were able
to take actions to avoid anticipated difficulties we could face
in later stages. In addition, I believe that the relationship with
Daewoo Shipbuilding & Marine Engineering that had already
been cultivated from other projects we had worked
on together previously allowed for an open
exchange of opinions at an early stage, which
was one of the reasons that the project
progressed so smoothly. With regard to
the technical aspect, we focused most
on ensuring safe and stable operations
of the vessel because we all understood
that was the biggest issue for an LNG
carrier that would navigate along the
Northern Sea Route. In the event that the
ship was to stop in icy waters, not only would this be a danger
to the crew members stuck at sea, but the ship would also be
unable to keep the cooled LNG in its tanks, as LNG would
vaporize even in the cold temperatures of the Arctic Ocean. In
a worst-case scenario, this gas would have to be released
into the atmosphere. To prevent this kind of situation, we
incorporated mechanisms to enhance ship’s mobility, including
the “double-acting ice-breaking system” and all the details
such as the engine room design. Furthermore, we engaged
in detailed dialogues with the crew members who were going
to board the ship and incorporated their requests into the
ship specifications.
The knowledge and experience we have acquired
from this project, from risk assessment to actual
operation of the ship is invaluable, as it can only
be gained by overcoming new challenges.
It will be a strength that we can leverage
when taking on new projects and working
with other shipyards going forward.
I cannot wait to apply this expertise to our
next project.
I am very proud that we are making important milestones in
the Yamal LNG project, which is the very first to transport
LNG from the Arctic Circle to the rest of the world. I strongly
believe that this project has major social significance in a
sense that it made year-round transport of the previously
difficult-to-access natural gas locked in the Arctic Circle
possible and that use of the eastbound Northern Sea Route
greatly reduced transit time and the amount of CO2 emissions.
One of the key reasons why we got selected for the project
was our experience and performance as a marine transport
company boasting the world’s largest fleet of LNG carriers
with a track record of safe operations. I also feel our attitude
to actively having taken part in new overseas projects and the
fact of having built mutual trust-based relationships with
worldwide partners were taken positively.
To take on this new challenge, there were initially some
concerns over the risks within the Company. However, we
conducted independent risk assessments on the Northern
Sea Route, identified each risk from every aspect including
safety, financial, and political factors, and then established
fully thought-out countermeasure for each risk. We were able
to participate in this project because we finally had everyone
on the same page after communicating closely with those
within the Company who were skeptical, explaining the
feasibility of the project properly and carefully, and earning
their understanding.
Be that as it may, as one would expect with an unprec-
edented project like this one, we faced considerable difficul-
ties along the way. However, with any issue we faced, we were
able to eventually overcome it by utilizing our accumulated
knowledge and sometimes leveraging our network of outside
partners. As an example, we had previous experience work-
ing as partners with China COSCO Shipping, our joint venture
partner in this project, and with Daewoo Shipbuilding &
Marine Engineering, the company responsible for shipbuild-
ing. These existing trust-based relationships were a major
help in moving the project forward. As another example, we
were able to leverage our Group connections and received
cooperation from outside companies to secure opportunities
for our crew’s required special training for Northern Sea
Route operations. Execution of an LNG transport project
requires all aspects of a marine transport company, including
risk assessment before participation, negotiations until
concluding the charter contract, supervision of shipbuilding,
financing, post-construction ship management, and safe
operation of the ship. Accomplishing this project, despite
the many issues we had to overcome, is truly the result of
the comprehensive strength we have fostered up to this point.
Fortunately, our first ship, the VLADIMIR RUSANOV, has
been running well without any major issues. In addition, our
second ship began operation last year and our third will be
delivered this summer. Operating the world’s first ice-break-
ing LNG carriers gives us a feeling that we are making his-
tory at this very moment. The project is off to an amazing
start, but it is just the start. With the utmost care and atten-
tion, we will strive for safe navigation and work to create a
presence in the Northern Sea Route to be recognized as the
top player.
Kazuya Hamazaki
General Manager
Energy Transport Business
Unit, LNG Carrier Division
Mitsui O.S.K. Lines, Ltd.
Yuta Orito
Coordinator, LNG Carrier Project Team
Technical Division, Technology Innovation Unit
Mitsui O.S.K. Lines, Ltd.
Stories from Key Members
24
25
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Overview of MOL’s Sustainability Issues (Materiality)
The MOL Group aims to improve its corporate value over the long term by minimizing
the negative social impact of its business activities while striving to maximize its social value
through contributions to the SDGs and other efforts. For this purpose, we have newly identified
Sustainability Issues (Materiality), which are deeply connected with “Rolling Plan 2019.”
Process for Identifying Materiality
STEP
1
STEP
2
STEP
3
STEP
4
List each item
pertaining to the
Sustainability Issues
Evaluate and map each item
related to the Sustainability
Issues (Diagram on the right)
Analyze risks and
opportunities for each item
Finalize the
Sustainability Issues
e
g
r
a
L
y
t
e
i
c
o
s
n
o
t
c
a
p
m
I
/
s
r
e
d
l
o
h
e
k
a
t
s
o
t
e
c
n
a
t
r
o
p
m
I
Large-volume,
bulk transport services
High-quality
transport services
Safe and reliable transportation
Prevention of
marine pollution
Promotion of measures to
mitigate climate change
Reduction of
air pollution
Response to environ-
mental regulations
Elimination of
maritime accidents
Prevention of work-
related injuries
Elimination of cargo
accidents
Promotion of
LNG fuel usage
Pursuit of
workstyle reforms
Development of
human resources
Realization of
autonomous sailing
Promotion of diversity
Employment of
high-quality seafarers
Realization of transport means
with low environmental burden
Value-Added
Transport Services
Marine and Global
Environmental
Conservation
Innovation for
Development in
Marine Technology
Human Resource
Cultivation and
Community
Development
Issue related to
all themes
Governance and
Compliance to
Support Businesses
Contribution to
regional revitalization
Advancement in
the Wind Challenger Project
Small
Impact on the MOL Group’s businesses
Large
1 Concentrated investment of management resources in the business fields where MOL has strengths, which will mainly be offshore businesses 2 Provision of “stress-free ser-
vices,” which MOL will offer from the customer’s perspective 3 Promotion of environmental strategies and development of the emission-free business into a core business
Sustainability Issues
(Materiality)
Themes / Targets / Goals
Risks
(Negative impact in the event
the goal on left is not achieved)
Opportunities
(Positive impact in the event
the goal on left is achieved)
Main SDGs
contributed to
Management Plan “Rolling Plan 2019”
Three core strategies for
realizing the 10-year vision
Five priority areas for development
1
2
3
Marine
Technical
Skills
ICT
Technological
Development
Environmental
and
Emission-Free
Business
Workstyle
Reforms
Value-Added
Transport
Services
• Safe and reliable transportation
• Large-volume, bulk transport services
• High-quality transport services
• Elimination of maritime accidents
• Elimination of cargo accidents
• Prevention of work-related injuries
• Slowdown in economic activities and logistics
• Loss of trust in the Company from society
• Economic burden and damage to assets due to
an accident
• Risk of casualties as a result of an accident
Marine and Global
Environmental
Conservation
• Prevention of marine pollution
• Promotion of measures to mitigate
climate change
• Reduction of air pollution
• Response to environmental regulations
• Realization of transport means with low
environmental burden
Climate
Change
• Decline in energy transport volume
• Delay in response to changing transport
demand and trade dynamics
• Obstruction to safe operation caused by
extreme climate conditions
Response to
Regulations
• Disruption to vessel operation
• Loss of trust in the Company from society
• Economic burdens such as fines
and sanctions
Innovation for
Development in Marine
Technology
• Promotion of LNG fuel usage
• Advancement in the Wind Challenger Project*
• Realization of autonomous sailing
• Obsolescence of existing technologies
• Inability to respond to shortage of seafarers
in the future
Human Resource
Cultivation and
Community
Development
• Employment of high-quality seafarers
• Development of human resources
• Pursuit of workstyle reforms
• Promotion of diversity
• Contribution to regional revitalization
• Loss of outstanding human resources
• Decline in productivity
Governance and
Compliance to
Support Businesses
• Adherence to fair business transactions
• Prevention of bribery and corruption
• Establishment of information security structure
• Prevention of harassment
• Protection of human rights
• Business continuity risks due to insufficient
governance and internal controls
• Corrupted corporate culture
* The Wind Challenger Project is a joint industry–academia research project that aims to significantly reduce the amount of fuel consumed by large vessels by maximizing
the use of wind power through the installation of massive sail panels on vessels. MOL participates and is promoting the Wind Challenger Project, which commenced in 2009.
• Contribution to active economic activity and
creation of new transport demand
• Contribution to establishment of energy
infrastructure in emerging countries
• Long utilization of vessels through appropriate
ship maintenance, which leads to enhancement
of competitiveness
• Cultivation of operational insight
• Incorporation of new transport demand and
establishment of new transport model that
quickly captures changes in cargo movements
• Development of new sailing routes (Arctic Ocean)
• Decrease in environmental burden and
reduction of transport costs by utilizing new
technologies
• Involvement in environmental rule creation
• Reduction of environmental burden by the
widespread use of LNG fuel and the application
of natural energy
• Improved competitiveness of offshore
businesses and marine transport
• Enhanced ability to respond to environmental
regulations
• Improvement of human resource competitiveness
through recruitment of outstanding talent and
improved work productivity
• Promotion of innovation and response to
business opportunities
• Incorporation of various ideas by attracting a
diverse pool of talent from all over the world
• Economic development and a higher standard
of living in emerging countries
• Highly transparent and fair management
• Decision-making based on appropriate risk
management
26
27
P28
P32
P36
P38
P42
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Value-Added Transport Services
Through the transportation of various goods, such as resources, energy, raw materials, and
products, the MOL Group supports people’s lives and industries around the world. By continuing
to provide efficient, safe, and reliable transport services sustainably, which is the core of our
business, we will fulfill our role as an important part of economic and social infrastructure.
Percentage of Marine Transport within
Japan’s Overall Trade Volume
World Population and Volume of Cargo Transported at Sea
(Billions of people)
Average annual
growth rate forecast
(Billions of tons)
99.6
%
20
15
10
5
0
Average annual growth rate
4.6%
1.0%
Forecasts for future
cargo movements
after 2019
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
10.0
7.5
5.0
2.5
0
2050
World
population (left)
Volume of cargo
transported at
sea (right)
Source: Japan’s Marine Transport Shipping Now 2018–2019,
Japan Maritime Public Relations Center
Source: Results for cargo movements were taken from Clarksons. Results and forecasts for world
population were taking from the United Nations. Forecasts for future cargo movements are
based off Company calculations.
Offshore
Businesses
Drawing on our expertise and techniques cultivated in the field
of energy transport through the operation of LNG carriers and
tankers, we work to offer solutions beyond transportation, such
as FSRUs and FPSOs, to meet the demand for energy primarily
in emerging countries.
Based on the track record and expertise we
have gained in our over 130-year history, we
provide safe and reliable transport services on
a daily basis. In addition, through the operation
of a diverse fleet that is world-leading in scale,
we are able to offer large volume and low-cost
transport services for various cargoes.
Dry bulkers
Customers
Terminals
We operate container terminals in five locations in Japan and
eight locations overseas,* and also provide stevedore services
across Japan for car carriers and other conventional cargo
ships. Accordingly, we have developed a comprehensive
terminal business.
Tankers
LNG carriers
Car carriers
Logistics
Making full use of our wide-ranging network that spans across 27
countries, we deliver a diverse combination of logistics services to
our customers, including marine, air, and land transportation as
well as customs clearance and warehouse management.
Marine
Transport
Containerships
* Overseas container terminal business is scheduled to be transferred to the integrated containership business company, ONE.
28
29
End-consumers
Food manufacturers
Paper
manufacturers
Iron and steel
producers
Electric power
companies
Oil companies
Gas companies
Automobile and construction
equipment manufacturers
Other
manufacturers
Trading houses
Forwarders
For Our Sustainable GrowthValue that MOL ProvidesMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Addressing Sustainability Issues
Value-Added Transport Services
Pursuing Safe Operation That Supports High-Quality Transport Services
In sustainably providing value to society through transportation, the most important element
is ensuring reliable safe operation. To visualize the process for achieving safe operation,
MOL adopted the “4 Zeroes” (zero serious marine incidents, zero oil pollution, zero fatal
accidents, and zero cargo damage) as its goals and monitors the continuous number of days
that “4 Zeroes” are achieved. In this way, we are increasing the safety awareness among all
employees in their daily duties. In addition to the 4 Zeroes, we have other key performance
indicators (KPIs) listed below. For this year in particular, we have adopted “Development of
Groupwide safety and quality management” as a focus area under “Rolling Plan 2019” and
all corporate officers and employees of the Group are prioritizing efforts to realize the
world’s highest standards for safe operation.
KPIs Related to the Thorough Enforcement of Safe Operation
1
2
3
4
Continuous achievement
of the 4 Zeroes for:
• Serious marine incidents
• Oil pollution
• Fatal accidents
• Cargo damage
LTIF*1: 0.7 or below
Average operational
stoppage time:*2
24 hours or less per
vessel each year
Operational stoppage
accident rate:*3
1.00 or below per vessel
each year
Trend in Lost Time
Injury Frequency (LTIF)
Average Operational Stoppage Time and
Operational Stoppage Accident Rate
Safe Operation Management Structure
The Operational Safety Committee, chaired by the president,
Organizational Structure Supporting Safe Operation
deliberates and determines basic policies and measurements
for ensuring and thoroughly enforcing the safe operation of all
Group vessels.
In addition, we have the Safety Operation Supporting Center
(SOSC), which monitors and supports the safety of Group vessels.
* MOL Ship Management Co., Ltd. and MOL
LNG Transport Co., Ltd.
e
e
t
t
i
m
m
o
C
e
v
i
t
u
c
e
x
E
Operational
Safety Committee
Chairman: President
Vice Chairman: Director General of
Safety Operations Headquarters
Safety
Operations
Headquarters
Marine Safety Division
Smart Shipping Division
Marine Technical Management Division
LNG Marine Technical & Ship
Management Strategy Division
Ship management companies*
Efforts to Achieve Safe Operations
Formulation of the MOL Safety
Standard Specifications
Based on the lessons learned from serious marine incidents that
occurred in the past, we formulated the MOL Safety Standard
Specifications in 2006 with the goal of ensuring a high level of safety
on all our vessels. These standard specifications are revised
opportunities to learn about actual accidents and work-related
disasters and actively discuss the causes and measures to be
taken to prevent reoccurrence.
Establishment of the Safety Operation
Supporting Center (SOSC)
occasionally as necessary. The kind of specifications a vessel should
The SOSC was established in 2007 within the Head Office under
be equipped with are determined to better ensure the prevention of
the motto “Never let the captain get isolated.” The SOSC is staffed
collation and grounding, fire, flooding and loss of stability, oil leakage
by two marine technical specialists, including an experienced MOL
at sea and environmental pollution, and workplace accidents,
captain. By monitoring the weather, sea, and other conditions
which all have a significant impact on society and on Company
surrounding the approximately 830 vessels operated by the MOL
profits. We apply such specifications to MOL-operated vessels.
Group, the SOSC provides information on vessel operation in a
Cultivation of a Safety-Oriented Culture
MOL implements a vast range of initiatives with the hope of foster-
ing an awareness of safe operation in each employee. In our Safety
Campaigns, which we conduct twice a year, directors and employ-
ees gather together onboard our ships to share information and
timely fashion.
The SOSC provides
assistance to all ship
captains 24 hours a
day, 365 days a year.
exchange opinions on accident prevention. Furthermore, we have
Progress on Autonomous Sailing Using ICT
been holding annual Safety Conferences for seafarers on leave at
locations across the globe since 2007. They are important
Please see page 37 for details
(examples of MOL’s technological innovation).
(Hours per vessel)
(Number of accidents per vessel)
2.0
Response to Allision of the NIPPON MARU in the Port of Guam
2.0
1.6
1.2
0.8
0.4
0
Average among all industries in 2018 (1.83)
Average among marine transport industry in 2018 (1.20)
MOL’s target since fiscal 2015 (0.7 or below)
2014
2015
2016
2017
2018
(Fiscal year)
40
30
20
10
0
MOL’s target for average operational stoppage time
(24 hours or less)
1.5
1.0
0.5
MOL’s target for operational stoppage accident rate (1.00 or below)
2014
2015
2016
2017
0
(Fiscal year)
2018
Regarding the above KPIs, in fiscal 2018 we were unable to
achieve 1 . as an accident regrettably occurred where the
cargo space of a MOL-operated vessel caught fire. Also, as on
the graph above, we were unable to achieve 3 .
Average operational stoppage time (left)
Operational stoppage accident rate (right)
*1 Number of work-related accidents per one million hours worked that resulted in time
lost from work of one day or more. In the scope of calculations, we originally included
only workplace illnesses and injuries requiring disembarkation from the ship. The
LTIF criteria was strengthened from fiscal 2015, and now includes any workplace
illness or injury that prevents a worker from resuming even a reduced workload
on that day, regardless of whether the illness or injury requires disembarkation.
Reference: 2018 average for all industries: 1.83, 2018 average in the marine transport
industry: 1.20 (Source: 2018 Survey on Industrial Accidents issued by the Ministry of
Health, Labour and Welfare)
*2 The amount of ship operational stoppage time due to an accident per ship per year
*3 The number of accidents that result in operational stoppage per ship per year
In December 2018, the NIPPON MARU, which is operated by
support the measures that Mitsui O.S.K. Passenger Line implements
Group company Mitsui O.S.K. Passenger Line, Ltd., allied into a
to prevent any such incident from reoccurring. At the same time,
pier in the Port of Guam. Following the occurrence, Mitsui O.S.K.
we will make concerted efforts for “Development of Groupwide
Passenger Line received an order from Japan’s Ministry of Land,
Infrastructure, Transport and Tourism to ensure the safety of its
safety and quality management,” which was adopted as a focus
area for the current fiscal year under “Rolling Plan 2019.”
transport services. The company has submitted the reoccurrence
prevention measures, which are listed on the right, and its presi-
dent and responsible officers have all taken pay cuts. The Master
and Chief Engineer who were onboard the vessel at the time of the
incident have been severely reprimanded in accordance with in-
house disciplinary regulations. MOL solemnly recognizes the
inadequacies of Mitsui O.S.K. Passenger Line that have been
brought to light as a result of this incident, and has reduced the
pay of its president and responsible officers. We offer our sincerest
apologies for the inconvenience and concern caused to the
passengers and all the people affected. We will monitor and
Outline of Measures to Prevent Reoccurrence
1 -1. Hold regular trainings to improve operational techniques
-2. Strengthen education on internal alcohol management
regulations
2 Conduct inspections to prevent employees from working
under the influence of alcohol
3 Establish an effective safety management structure on its
own initiative
4 Implement policies to strengthen safety management
as a company
Please visit the following website for more details on measures to prevent reoccurrence in response to the order to ensure
safety (Only available in Japanese).
https://www.nipponmaru.jp/news/wp-content/uploads/sites/2/19f37d3ff3180b1ead02a9b720f49d70.pdf
30
31
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Response to Other Environmental Regulations
Marine and Global Environmental Conservation
MOL has identified five important themes for the Sustainability Issue of “Marine and global environmental conservation,”
which are “Prevention of marine pollution,” “Promotion of measures to mitigate climate change,” “Reduction of air
pollution,” “Response to environmental regulations,” and “Realization of transport means with low environmental burden.”
We are taking specific measures to address these important themes, such as reducing CO2, SOx, and NOx emissions,
thorough ballast water management in order to preserve biodiversity, and selecting vessel demolition yards from a stand-
point of the impact to the environment. At the same time, we are examining new initiatives for reducing marine plastics.
To Curtail Greenhouse Gas (GHG) Emissions
Compared with other transportation methods, the amount of CO2
released into the atmosphere, having a negative impact on the
emissions and air pollutants from marine transport per transport
unit is remarkably small because a large volume of cargo can be
environment. Accordingly, we have adopted GHG emissions
targets under MOL Group Environmental Vision 2030, which was
moved all at once. However, we cannot ignore the fact that marine
formulated in April 2017, in order to make active efforts to reduce
transport contributes to the overall amount of emissions being
GHG emissions as an eco-minded company.
CO2 Emitted When Transporting One Ton of Cargo One Kilometer
CO2 Emissions of MOL Vessels
Large
containerships
Crude
oil tankers
3.0
2.9
Dry bulkers
2.5
Trucks*3
80
Cargo planes*4
0
100
200
*1 Twenty feet Equivalent Unit
100
*2 Deadweight Tonnage
Source: Challenges in the Marine Transport Industry,
*3 Over 40 tons
200
*4 Boeing 747
0
18,000 TEU*1 type
100
200,000 DWT*2 or more
200,000 DWT or more
435
300
300
400
400
500
(g)
500
80
60
40
20
0
The Japanese Shipowners’ Association
GHG Emissions Targets under MOL Group Environmental Vision 2030
(Compared with fiscal 2014 / Per transport unit)
Fiscal 2030
Fiscal 2050
25% reduction
50% reduction
In April 2018, the IMO*5 determined GHG emissions targets*6 in
(Thousands of tons)
25,000
20,000
15,000
10,000
5,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0
(Fiscal year)
Ship Recycling
Per transport unit assuming fiscal 2009 as 100 (left)
Total amount (right)
Road Map to Reduce GHG Emissions
(%)
50
25
Innovation such as application of alternative fuels, etc.
Offset environmental impact through emission trading
accordance with the Paris Agreement.*7 Based on the IMO
Introduce LNG-fueled vessels, Wind Challenger Project, etc.
targets, we are currently considering revisions to our targets as
well as concrete measures for achieving these targets.
Achieve EEDI*8 reduction target / Enhance vessel
operational efficiency, including slow steaming /
Vessel upsizing, etc.
0
2014
2030
2050
(Fiscal year)
Please refer to the Environmental Data section on our corporate website for more details.
https://www.mol.co.jp/en/csr/environment/data/index.html
*5 The International Maritime Organization (IMO) is a specialized agency of the United
Nations established in 1958 to promote collaboration among government agencies
on a variety of issues in the maritime field, including marine safety and the preven-
tion of marine pollution by vessels.
*6 At the 72nd meeting of its Marine Environment Protection Committee, held in April
2018, the IMO determined targets for reducing the GHG emissions of international
shipping sector. These targets aim to improve fuel efficiency of the sector compared
with 2008 levels by 40% or more by 2030, and by 70% or more by 2050. In addition,
these targets strive for a 50% reduction in total GHG emissions by 2050, while
encouraging efforts toward eventually eliminating GHG emissions as quickly as
possible within the 21st century.
*7 In the Paris Agreement, a long-term target was set for keeping a global temperature
rise this century well below 2°C compared with pre-industrial levels. The agreement
also aims to pursue efforts to limit the temperature increase even further, to 1.5°C.
*8 The Energy Efficiency Design Index (EEDI) is an index used during the design of a
new ship to calculate the ship’s theoretical CO2 emissions on a g/ton-mile basis.
The required EEDI reduction rate in each phase is as follows: Phase 1= 10%, Phase
2= 20%, and Phase 3= 30%–50% (depending on type of vessel)
SOx Regulations
SOx Regulations
The SOx regulations limit the percentage of sulfur content in
fuel in order to curtail the amount of sulfur in gas emissions.
Starting in January 2020, the IMO will lower the current limit of
3.5% or less to 0.5% or less.
There are primarily three ways to comply with the tightening
regulations: Use compliant oil, install SOx scrubbers, and use
LNG or other alternative fuels. While our approach for the time
being focuses mainly on the use of compliant oil, we are exam-
ining the best choice for each of our vessels.
• In anticipation of tighter SOx regulations, we are implementing combustion tests using sample fuels at the MOL Group’s
technological research centers to confirm performance and stability during use. We also implement trials with actual vessels,
such as car carriers and tankers.
• We are engaging in procurement negotiations with leading suppliers around the world, including major oil companies. In
Singapore, which is a major port for bunkering (oil replenishment), we have secured a large part of the necessary amount of
compliant oil for all MOL vessels for use during fiscal 2019.
• Compliant oil costs more than heavy oil, which has been used conventionally. As such, the cost of bunker fuel is expected to
rise. We believe that the costs related to environmental initiatives implemented on a global scale is something that should be
shared among the whole society. We are working to gain the understanding of our customers for reflecting the additional fuel
costs in freights and other fees.
• We are installing SOx scrubbers primarily for larger vessels such as Very Large Crude Carriers (VLCCs) and Capesize bulkers,
because such larger vessels can recover the cost of such installation more quickly. It is scheduled that we install SOx scrubbers
on approximately 60 vessels across the Group by 2022, including cases where it is at the request of our customers.
Please see page 36 for our efforts toward LNG-fueled vessels
(Innovation for Development in Marine Technology).
Compliant oil
SOx scrubbers
LNG and other
alternative fuels
Ballast Water Management
Ballast Water Management Convention
The Ballast Water Management Convention highlights the
negative impact of the cross-border transfer of foreign marine
organisms, which occurs when vessels release ballast water,
on marine ecosystems. Under the convention, all vessels are
mandated to install ballast water treatment systems by 2024.
In anticipation of the enactment of the Ballast Water
Management Convention, adopted by the IMO, we decided to
make the installation of ballast water management systems a
Companywide policy in fiscal 2014. As of April 2019, we have
completed installation of these management systems on 142
vessels, which is roughly 54% of owned vessels.
Ballast Water Mechanism
Discharging
port
Loading port
Marine
organisms
Impact on
marine
ecosystem
Ballast water is taken in to
provide weight as the draft rises
due to the unloading of cargo.
On the other hand, ballast water is
discharged when loading cargo as the
weight it provides is no longer needed.
Ship Recycling Convention
The Hong Kong International Convention for the Safe and
Environmentally Sound Recycling of Ships (Ship Recycling
Convention) was adopted by the IMO in May 2009. The convention
is not yet in effect as it is still in the ratification process in each
country. However, after its implementation the Ship Recycling
Convection will require inventory lists showing the quantity and
location of hazardous materials on ships.
When we demolish a ship, we select yards that are verified by
ClassNK* for compliance with the Ship Recycling Convention.
In addition, we are working on making inventory lists in
accordance with the Ship Recycling Convention.
* Nippon Kaiji Kyokai, or ClassNK, is an international ship classification society.
ClassNK carries out vessel surveys and also examines and monitors vessels in
operation and issues certificates of vessel classification.
Environmental Management Structure
Environment-related policies were previously discussed at meet-
promoting environmental and emission-free businesses, which we
ings of the Technology, Innovation and Environment Committee,
aim to establish as core businesses in the future.
the CSR Committee, or others. In April 2019, we established
the Environmental Management Committee, which serves under
the Executive Committee and is chaired by the vice president, to
confirm important management issues to address and strengthen
necessary efforts. In addition to formulating environmental targets
and monitoring progress made toward reaching these targets, the
Environmental Management Committee will be in charge of
Structure for Promoting the Environmental Initiatives
Environmental Management
Committee
SOx 2020 Regulation
Response Committee
Executive Committee
Corporate Planning
Division
New & Clean Energy
Business Division
Technology
Innovation Unit
32
33
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Marine and Global Environmental Conservation
Our Efforts to Address Environmental Issues
In the management plan announced in fiscal 2017, we set our
Environmental Investments
(Billions of yen)
goal to develop environmental and emission-free businesses
into core businesses in the future. Since then, we have proceeded
with various efforts to achieve this goal. Over the past three years,
a total of ¥18.4 billion has been invested in environment-
related areas.
Fiscal 2016 Fiscal 2017 Fiscal 2018
Environment-related R&D activities
Utilization and expansion of existing
environmental technologies
Responses to environmental
regulations
Initiatives to save bunker fuel
Initiatives of Group companies
Total
0.4
0.5
3.1
1.1
0.3
5.4
0.5
0.8
3.1
0.8
0.5
5.7
0.9
1.8
3.6
0.6
0.4
7.3
Progress in Environmental and Emission-Free Businesses
We have adopted “Promotion of environmental strategies and
development of the emission-free business into a core business”
as one of the three core strategies under “Rolling Plan 2019.”
CO2 Emissions Reduction Business
Support emissions reductions
We are taking an approach toward establishment of
PBCF /
Utilization of wind power as energy (for vessel
environmental and emission-free businesses as the pillar for
propulsion) /
Northern Sea Route /
LNG to Powership /
the next generation from four different perspectives: Renewable
CO2 capture and storage (CCS) /
Sale of highly energy-
energy business, Alternative fuel business, CO2 emissions
efficient equipment (storage batteries, LED lighting, etc.)
reduction business, and Environmental value creation business.
Propeller Boss Cap Fins
Fields where MOL is already involved in
Potential fields for MOL’s involvement
Renewable Energy Business
Generate and deliver eco-friendly electricity
Offshore wind power generation /
Biomass power generation /
Solar power generation
In March 2017, we invested in Seajacks International Limited,
which owns and operates Self-Elevating Platform (SEP) vessels
used for installation of offshore
wind power generation systems,
thereby entering the renewable
energy business. Going forward,
we will continue to contribute to
the progression of the renewable
energy field.
Alternative Fuel Business
Utilize and transport using innovative fuels
LNG fuel supply /
LNG-fueled vessels /
Methanol-
fueled vessels /
Progress in LNG-fueled vessels
Biomass fuel /
Hydrogen transport
Please see page 36 for details (Innovation for Development in
Marine Technology).
(PBCF) is a kind of propeller
attachment jointly developed
by MOL, Akishima
Laboratories (Mitsui Zosen)
Inc., and MOL Techno-Trade,
Ltd. that helps reduce the
resistance to ship propulsion.
In 2017, MOL Techno-Trade commenced sales of an upgraded
version of PBCF, which has been confirmed to reduce a vessel’s
fuel consumption by 5% compared to a ship without a PBCF.
Navigation of Northern Sea Route
Please see page 20 (Special Feature) for details.
Environmental Value Creation Business
Create value from environmental activities
themselves and conduct related trading activities
Green finance /
Investment in energy-saving and renew-
able energy venture companies /
Emission rights businesses
(Sale of carbon offsets)
In fiscal 2018, we issued a total of ¥10.0 billion in Green Bonds
for the purpose of raising funds for our green projects, ¥5.0
billion of which sold to individual investors for the first time as
a Japanese company.
In addition, in July 2019 we plan on issuing a total of ¥20.0
billion in Sustainability Bonds, which extends the usage of the
funds to projects that address issues related to the SDGs.
Participation in Task Force on Climate-related Financial Disclosures (TCFD)
We endorse the recommendations of the TCFD.
Scenario Analysis
In 2018, with the support of the Ministry of Environment and
under TCFD recommendations, we conducted scenario analysis
on a trial basis where we incorporated climate-related risks
and opportunities into our management strategies. In this trial,
we made an estimation of transport volumes, fleet demand,
and other factors under the 2°C and 4°C scenarios.*1 In doing
so, we examined the impact of higher temperatures on our
businesses and measures we can implement going forward.
More details of our analysis are available in the Practical Guide
for Scenario Analysis in Line with TCFD Recommendations, which
was published by the Ministry of the Environment.
Based on the insight we have gained through this trial,
we will further deepen our scenario analysis, impact evaluation,
and examination of future measures, and work to reflect the
results in our management strategies.
*1 Climate scenarios announced by such organizations as the International Energy Agency
(IEA) and the Intergovernmental Panel on Climate Change (IPCC). The 2°C Scenario is a
scenario in which the necessary measures are implemented to control temperature
increases to 2°C or less. The 4°C Scenario is a scenario in which economic initiatives
and additional measures to address climate change are not implemented.
For more details, please see pages 39–49 of the Practical Guide for Scenario Analysis in Line with TCFD Recommendations
(Only available in Japanese ).
http://www.env.go.jp/policy/Practical_guide_for_Scenario_Analysis_in_line_with_TCFD_recommendations.pdf
MOL’s Vision of the World under the 2°C Scenario
Cleaner society, shift toward renewable energy, and decrease in fossil fuel demand
Government
Carbon tax hike
CO2
Increased use of
EVs*2 and FCVs*3
FCV
EV
Shift toward local
production &
consumption which
is low-carbon
Expansion of carbon tax /
Decrease in fossil
fuel demand
Fossil fuel
Iron and steel
H2
H2
Hydrogen
H2
Biofuel
Decline in demand due
to the transition toward
lighter automobiles
Development of
next-generation
fuels
Further utilization of
Northern Sea Route using
ice-breaking vessels
MOL
MOL
Increase in demand
for offshore wind
power generation
Clean energy
CO2
SOx
NOx
Acceleration of EEDI /
Initiatives on GHG
emission reduction /
Tightening of SOx and
NOx regulations
IMO
Aim for zero GHG
emissions by
the end of the century
*2 Electric Vehicles *3 Fuel Cell Vehicles
Future Measures to Mitigate Climate Change
Soft measures
• Impose output limits on ship’s main engine to curtail CO2 emissions / Conduct further slow steaming
• Enhance operational efficiency by keeping the fastest route and optimal trim using the Internet of Things (IoT)
Hard measures
Business portfolio
change
• Install energy-saving equipment in new and existing vessels
• Construct LNG-fueled vessels
• Promote the Wind Challenger Project
• Expand joint industry–academia research and R&D investment aimed at next-generation fuels, such as biofuel, as
well as technological innovation of ships
• Expand renewable energy businesses such as offshore wind power generation and related businesses
• Further develop offshore businesses such as FSRUs, which promote the use of eco-friendly LNG fuel, and the LNG-to-
Powership business
Response to climate-
related regulations
and conditions
• Collaborate with related organizations to get involved in the formulation of rules at IMO
• Collect information on carbon pricing and take action accordingly
• Strive to deepen society’s understanding regarding the higher costs that come with efforts to reduce CO2 emissions
34
35
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Examples of MOL’s Technological Development
Innovation for Development in Marine Technology
To realize the 10-year vision, the MOL Group has established the three core strategies, including “Provision of ‘stress-
free services,’ which MOL will offer from the customer’s perspective” and “Promotion of environmental strategies and
development of the emission-free business into a core business.” With a view to executing these strategies, we are
promoting technological development using natural energy and information and communications technology (ICT).
Basic Policy on Technological Innovation
For technological development in the marine industry, the
which commenced in November 2016, we aim to spur logistics
focus had been on underlying technologies for the parts of ship.
innovation that captures the future needs of customers and
In recent years, the potential has expanded further due to the
society through both ICT and Technological Development, two
rapid development of ICT such as IoT and big data.
of the priority areas for development adopted under our man-
Centered on the ISHIN NEXT—MOL SMART SHIP PROJECT,
agement plan.
Proactively promote ICT utilization in addition to
technologies in conventional fields
Advanced technologies for supporting safer vessel operation
with a view to realizing autonomous sailing
New technologies
in various fields
Safety and the
Environment
ICT, e.g., big data
utilization
Technologies that reduce environmental burden in order to
protect the global environment
Actively develop technologies to meet the needs of
customers and society while inheriting the technological
expertise MOL has cultivated thus far
Our Goals
1 Eliminate human error and achieve
safe operation by leveraging
automated technologies
2 Develop eco-ships using
natural energy
Autonomous
Sailing
Wind Challenger
Project
3 Develop vessels using alternative
fuels that help reduce CO2 emissions
LNG-Fueled
Vessels
4 Expand the installation of equipment
for collecting vessels’ operational
data and create next-generation types
of ship management support systems
FOCUS
Project
5 Provide technological solutions for issues related to
logistics services
Structure for Accelerating Technological Innovation
We established the Technology Innovation Unit in April 2018 with the
a Group company responsible for providing Groupwide IT support.
goal of stepping up our efforts in technological development. The
unit comprises three organizations: the Technical Division, which
These three organizations collaborate to promote the development
of next-generation technologies. Additionally, in the ISHIN NEXT—
is in charge of managing and developing technologies from hard
MOL SMART SHIP PROJECT, the Technological Innovation Unit
aspects of the vessels; the Smart Shipping Division, which is in
actively pursues inter-industry collaboration with external
charge of marine-related ICT; and MOL Information Systems, Ltd.,
institutions, including the Wind Challenger Project.
Technological Development Platform
Universities /
Research
institutions
Private
companies
MOL
Information
Systems
Smart Shipping
Division
Technology
Innovation
Unit
Technical
Division
Close collaboration as “One MOL”
Co-creation with a wide range of stakeholders
Examples of Technological Development through
Co-Creation with External Institutions
• Forecast for dry
• Cameras to monitor
bulker movement
• Market estimations
for dry bulks
• MOL Light House
• Wind Challenger
Project
• FOCUS Project
• Autonomous sailing
loading and unloading
operation
• Support systems for
Northern Sea Route
sailing
• Support software for
VLCC’s loading and
unloading operation
Shipyards /
Manufacturers
National govern-
ments / Local
governments
36
Achievement of Safe Operation through Pursuing
Autonomous Sailing
Autonomous sailing is one of the projects we are working on in the
operation by crew members. In these ways, we are striving to
provide safer and more high-quality transport services.
Currently, we are considering technological development for
ICT area, a priority area for development under management plan.
supporting vessel operation in congested sea areas and arrival /
By promoting ICT utilization based on the marine technical skills
departure maneuvering as one of the utmost priorities. To that end,
that we have gained over our long history, we are working to prevent
we are working to achieve the mechanization of watch-keeping and
human errors, which are the majority cause of maritime accidents,
vessel operation, as well as auto berthing and un-berthing.
and help ensure the appropriate recognition, decision-making, and
Current Progress
Future Targets (After 2025)
1 Development of navigation system using AR*1 technology
that provides visual support to crew members during their
watch-keeping and vessel’s operations
The system integrates real-time video images from the bridge
camera with other vessels’ information from the AIS*2 and radar
(ship type, size, position, direction, speed, etc.), and displays on
tablets and screens (pictured on right).
2 Research and development toward creating algorithm for avoiding
areas where the risk of collision is high
3 Promotion of the Auto Berthing and Un-Berthing Demonstration
Project (with the goal of implementing a demonstration test in 2020)
Automatic
Watch-Keeping
Vessel’s Automatic
Operation
Complete Auto
Berthing and
Un-Berthing
*1 The technology that integrates digital information with the real world and superimposes computer-generated images on the user’s view in the real world.
*2 The Automatic Identification System that is used to share vessel and voyage information between ships.
Release of FOCUS Project Part I “Fleet Viewer”
Application—Aiming for the Visualization of
Marine Operations
In order to realize the visualization of marine operations through
application around October 2019. This application will visualize the
degradation of ships over time as well as the impact of ships on
the environment, both of which are difficult to assess from shore.
In these ways, we will strive to leverage ICT utilization in an even
enhancing collection and utilization of vessel operation data,
more sophisticated manner.
we are promoting FOCUS Project jointly with Mitsui E&S
Shipbuilding Co., Ltd. and Weathernews Inc.
By utilizing voyage and engine data collected from approximately
150 vessels, we are developing applications for more advanced
vessels’ operation monitoring and propulsion performance analysis.
In doing so, we aim to strengthen the safe operation and reduce
the environmental burden in marine transport. In May 2019, we
launched “Fleet Viewer,” an application geared toward reinforcing
vessel management, as Part I of the FOCUS Project. “Fleet Viewer”
collects nearly 6,000 sensing data at a high frequency (one-minute
intervals) including the operational status of all equipment, vessel
position, and ocean and weather information. All data is shared
among vessels and various locations on shore.
As Part II of the FOCUS Project, we plan on releasing a new
Commencement of Service of the LNG-Fueled
Tugboat ISHIN
LNG fuel is a clean energy source which gives off less CO2 and
escort services to large cargo ships sailing Osaka Bay and the Seto
Inland Sea. ISHIN also assists arrival and departure maneuvering
at ports. We will accumulate the know-how through ISHIN’s
SOx emissions compared with fossil fuels. Amid growing envi-
operation to enhance our Groupwide expertise on LNG-
ronmental awareness around the world, global demand for
fueled vessels.
LNG fuel is expected to increase significantly. Accordingly, we
MOL takes a proactive approach in popularizing the use of LNG
have been working to develop LNG-fueled vessels. As a fruit of
fuel to meet the environmental needs of our customers and society.
these efforts, we commenced service of the LNG-fueled tug-
boat ISHIN in fiscal 2018.
ISHIN is Japan’s first tugboat built to conform to the IGF Code.*
Moreover, its excellent environmental performance earned the top
rating of four stars under the Ministry of Land, Infrastructure,
Transport and Tourism’s energy-saving rating scheme for Japan’s
coastal ships. With its ability to navigate at high speeds, ISHIN offers
* The IGF Code stands for
the International Code of
Safety for Ships Using
Gases or Other Low-Flash
Point Fuels. The code
establishes safety require-
ments for vessels that run
on gas and low-flashpoint
fuels, and took effect on
January 1, 2017.
37
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Efforts toward Human Resource Development
Human Resource Cultivation and Community Development
Human resources are the driving force for the Group’s growth and what underpin our brand and reliability. We aim
to achieve sustainable growth based on MOL CHART, the values shared by all Group members worldwide, and by
creating an organizational culture that allows a diverse group of human resources from different backgrounds,
including nationality and gender, and with varying attributes to work positively and lively. Furthermore, by offering
opportunities for professional education by in-house educational institutes located in countries such as the
Philippines and providing stable employment, not only will we secure top-quality seafarers that are indispensable to
the Group’s operations, we will also contribute to the economic and industrial development of emerging countries.
Basic Policy on Human Resource Development
Developing human resources, which act as the source of our
personal initiative and a sense of responsibility who can create
added value, and ensuring diversity are two important issues
new value and play an active role in the global market. To realize
to address in order to realize our 10-year vision to “Become
this goal, we provide training programs that support the growth
a Group of Business Units with No. 1 Competitiveness in
of each employee while at the same time create an environment
Respective Areas.” In the development of Group human
that brings out the full potential of our diverse human resources
resources, our goal is to cultivate human resources with
and allows them to work energetically.
Fostering an Organizational Culture Based on MOL CHART
To operate the wide range of MOL Group businesses on a global
value on a Groupwide level, it is imperative to establish shared
scale, we have been proactively employing people of different
values that we cherish as a group to overcome the regional,
nationalities and backgrounds. Nowadays, in a time of significant
linguistic, and cultural boundaries. Therefore, we formulated
changes in the external environment, it is becoming increasingly
MOL CHART in April 2015 as a set of values that are to be
important that we have a group of people that are diverse not
embraced by all Group members. By instilling MOL CHART in all
only in terms of nationality and gender but also in how they view
domestic and overseas Group employees, as well as in all crew
and approach different situations. We can keep creating value
members on our vessels and making it the foundation on which
only when such diverse people collaborate in a way each
each employee makes decisions, we are fostering a corporate
member extends his or her unique capabilities to the fullest.
culture that further ensures compliance, enhances safety
With that said, in order to continuously enhance our corporate
awareness, and promotes the creation of new value.
Challenge
Honesty
Accountability
Reliability
Teamwork
Innovate through insight
Do the right thing
Commit to acting
with a sense of ownership
Gain the trust of customers
Build a strong team
With a goal to cultivating human resources with personal initiative
their knowledge of vessels and operations, in addition to
and a sense of responsibility who can create new value and
enhancing their awareness of safety through firsthand experi-
play an active role in the global market, we promote the growth
ences on the frontlines. They also include the One MOL Global
of each employee by offering a wide variety of training programs
Management College, which is designed to develop management
based on position and category of skills. These programs include
executives for the next generation.
onboard training for young employees, which aims to deepen
Development of human
resources who are
globally active
Optional
Strengthening of
fundamental skills
Business skills, accounting,
legal affairs, and training
programs in agencies
Optional
Enhancing the ability to
train team members
Required
Development of
management executives
and leaders
Optional Selection-based
ICT literacy
Optional
Extension lectures, etc.
Optional
Staff
Coordinators
Team Leaders
General
Managers
MOL BEST (English training) Required
Global business skills
Training programs before overseas transfer
Chinese-language courses
Long-term
overseas training
Short-term
overseas training
One MOL Global
Management College
Selection-based
Practical training at
in-port agency
Onboard training
Accounting, presentations, logical writing, and facilitation
Reading contracts in English
Fostering of safety awareness
Business strategies Optional
Excel skills
ICT literacy
Promoting diversity
Coaching skills
Employee evaluations
ISL leadership training (fostering
innovative leaders) Selection-based
Management
School
Selection-based
One MOL Global
Management
College Selection-based
Mitsui Jyuku (an exclusive training program for senior employees in Mitsui Group companies)
Public programs, correspondence courses, and extension lectures, etc.
Founding One of the Largest Maritime Academies in the Asia–Pacific Region
as an academy, it allows us to provide education to students before
they become seafarers. In addition to ship operating techniques,
the MMMA emphasizes fundamental education, the ability to think
logically, and a strong sense of discipline. Based on such policy,
the MMMA aims to develop human resources that can someday lead
the future of the Philippines itself. At the inauguration ceremony for
the MMMA held in September 2018, we welcomed around 700
guests, including Secretary of the Department of Transportation
Arthur Tugade, Senator Grace Poe, and H.E. Koji Haneda, the
Japanese Ambassador-designate to the Republic of the Philippines.
Through the MMMA, we will aspire to develop outstanding human
resources who can handle safe operation at a world-class level
while at the same time offering high-quality education and creating
stable employment. In these ways, we will contribute to the
development of local communities.
In August 2018, we opened one of the largest maritime academies
in the Asia–Pacific region, MOL Magsaysay Maritime Academy Inc.
(MMMA), in the Philippines.
Filipino seafarers, comprising approximately 70% of all Group
crew members, serve as the core workforce on our operating vessels.
To date, we have co-managed the Magsaysay Institute of Shipping (MIS),
which aims to develop Filipino crewmembers that can support our
high safety standards. At MIS, we conduct onboard training using a
training vessel dedicated to the institute. In addition, based on the
Academia-Industry Linked Program (AILP) promoted by the Philippine
government, we implement a cadet training curriculum at MIS named
“Third-Year Program,” which involves education and training at
Company facilities for students selected from partner maritime
schools. At the recently opened MMMA, we accept a maximum of 300
students per year and endeavor to turn out high-quality seafarers
stably and continuously based on the track record and insight we have
gained from managing the MIS. We expect the graduates of MMMA to
not only succeed onboard but also become personnel that can lead
our organization in various fields, including safety management,
voyage management, and technical support for sales divisions.
We have thus far worked on employee training through the
establishment and operation of training centers that allow our crew
members to acquire technical operation skills and receive pre-
boarding training. One important characteristic of the MMMA is that,
38
39
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Addressing Sustainability Issues
Human Resource Cultivation and Community Development
Creation of an Environment That Draws Out Employees’ Capabilities to Their Full Extent
Promoting “Workstyle Reforms”
We have established “Workstyle reforms” as a priority area for
development under our management plan. The aim of these
reforms is to enhance competitiveness of our human resources
and accelerate innovation through a corporate culture that supports
employees to work in a lively manner. To achieve our 10-year
vision, we must execute our work procedures with a high level of
efficiency, encourage creative thoughts that are not constrained
by conventional ideas, and promote a culture and organization
that can spur such creativity. In September 2016, we established
the Improvement of Work Efficiency Committee, which is chaired
by the president. Centered on this committee, we have been
making various efforts in four focus areas―personnel system
reforms, corporate culture reforms, workplace / workstyle
reforms, and operational reforms―in order to enhance
productivity and create time to pursue innovation that transcends
conventional frameworks. At the same time, we endeavor to
achieve a corporate culture where each employee can work
with satisfaction and motivation.
Brand new open-plan style pilot office on the fifth floor of our Head Office where
employees choose desk by drop-in basis
MOL’s Workstyle Reforms
Creating a vibrant work
environment that facilitates
communication both
horizontally and vertically
throughout the organization
New ideas and
constructive
discussions
Four Areas of Focus for Reforming Workstyles
1 Personnel system reforms
Introduced a new structure for the personnel system in fiscal 2018
based on the following principles
• Establish a system that supports earlier identification and
cultivation of managers who will lead the organization with
accountability and initiative
• Diversify the range of career paths to develop or secure specialists
and give employees with various backgrounds more opportunity
for accomplishment
2 Corporate culture reforms
• Conduct round-table conferences named “HOT Dialogue” to
enhance communication between the president and each division
and between the general managers, etc.
• Provide company support for employees gatherings across divisions
• Prepare discussion board for all employees on in-house social
network application
• Implement No Overtime Days
• Introduce Casual Every Day
• Encourage male employees to take childcare leave
3 Workplace reforms
• Introduce a remote work program
• Create space by reducing the amount of paper documents and
establish employee lounge area for more communication
• Introduce a pilot office where employees are free to choose desk by
drop-in basis and start to measure effects of such office
4 Operational reforms
• Promote the use of robotic process automation (RPA)
• Provide facilitator training to teach employees the skills needed to
manage meetings better
• Introduce large touchscreen displays (Surface Hub) to improve
meeting productivity
• Start the Paper OFF! Project, which aims to significantly reduce the
amount of paper documents
Sustainable
corporate growth
“Creating innovation”
“Differentiation from
competitors”
“Leading the industry
in individual
competitiveness”
The President Serves as Chairman of the Improvement of Work Efficiency Committee
Enhancing productivity
• Reform corporate culture
• Improve efficiency of working
processes
Creating a corporate culture and working style
that enhance productivity and lead to new ideas
in order to encourage innovative thinking
• Reduce time spent on low-
Organization
priority activities
Proceeding with workstyle
reforms from the
perspectives of both the
organization and employee
Employee
Enhancing employee satisfaction
• Clear separation of work and
private life
• Working “smartly”
• Creating momentum for the future
Promoting Diversity and Inclusion
The MOL Group positions the promotion of diversity as an important
management strategy in order to continue to be a dynamic and
innovative organization that can flexibly respond to changes in
the external environment and realize sustainable growth.
We provide various forms of support and are working to
establish an environment that allows each of the approximately
15,000 multinational employees and seafarers working in the
Group to maximize their abilities and play an even more active
role, regardless of differences in experience, values, life stages,
and attributes. We established the Diversity and Healthcare
Management Office in the Human Resources Division in 2017
(currently the Diversity and Healthcare Management Team),
thereby creating a system to more intensively carry out these
efforts. Moving forward, we will improve our working environments
so that employees of various nationalities and from different back-
grounds can contribute to the greatest extent possible. By doing so,
we will enhance the comprehensive strengths of the Group.
Number of Employees / Ratio of Female Employees /
Ratio of Women in Managerial Positions*
Ratio of Employees by Region (Consolidated)
64%
16%
9% 7%
Japan
Europe
Southeast Asia
North America
East Asia
4%
Ratio of Seafarers on Company-Operated Vessels
by Region (Consolidated)
68%
Philippines
Russia
Other
India
Japan
Europe
Indonesia
15%
5%
5%
3%
3%
1%
(People)
1,500
1,000
500
0
2013
2014
Number of employees (left)
Ratio of women in managerial positions (right)
2015
Ratio of female employees (right)
2017
2016
2018
(%)
20
15
10
5
0
(Fiscal year)
* Unconsolidated basis excluding loaned employees, contract employees,
part-timers, etc., but including expatriate employees
Recruitment of an Athlete
MOL recruited its first athlete in 2016, hiring wheelchair rugby player Kae Kurahashi. She balances both office
work and athletic activities, working for the Human Resources Division two days a week (including one day of
remote work) and practicing three days a week.
MOL Group executives and employees eagerly support Ms. Kurahashi who participates in both domestic
and international competitions and always delivers an outstanding performance including a victory in the World
Championships in August 2018 as a member of the national team.
In 2017, MOL signed an official sponsorship agreement with BLITZ, Ms. Kurahashi’s wheelchair rugby
Photo: Kinzo Takaba
team. In 2018, we became an official partner of the Japan Wheelchair Rugby Federation.
In addition to helping to promote the expansion of wheelchair rugby, we will work to foster an environment
that encourages our diverse employees to play active roles inside as well as outside the Company.
Kae Kurahashi
Human Resources Division
Diversity and Healthcare
Management Team
Promoting Health and Productivity Management
We believe that ensuring the safety and health of our employees
and creating a work environment, including on vessels, where
they can work with peace of mind provides the foundation for our
corporate activities.
Based on this belief, centering on the Diversity and Healthcare
Management Team, the Company spearheads efforts to provide
a wide range of support and establishes an environment that
enables each and every employee to maintain and improve their
mental and physical health and work with energy and motivation.
These efforts were evaluated highly, with MOL being selected as
a “White 500 Company” in the large enterprise category of the
2019 Certified Health and Productivity Management Organization
Recognition Program, a cooperative initiative by Japan’s Ministry
of Economy, Trade and
Industry (METI) and Nippon
Kenko Kaigi.
Key Initiatives in Health and Productivity Management
• In collaboration with workstyle reforms, formulate “Smart Work
Plans” for each division to reform workstyles, correct the issue of
long working hours, and achieve a work–life balance with the goal
of creating time for generating new value
• Provide the mental and physical support of all employees—including
onboard and overseas employees—through collaboration between
the Human Resources Division and occupational health physicians,
in-house doctors, clinical psychologists, and public healthcare nurses
• Conduct mental health consultations at major locations in Japan
and introduce a web-based mental health self-check tool
• Organize health courses and campaigns on themes such as
quitting smoking, stretching, walking, and sleep and eating
habits, thereby promoting employee health awareness
• Implement the “Breakfast Campaign” that provides breakfast
at the employee cafeteria during summer to help improve work
efficiency and health
• Adopt “MOL Body Fit Exercise,” a unique calisthenic exercise
routine that supports the health of ocean-going employees, as
well as nutrition improvement projects on MOL's fleet
For more information regarding our health and productivity management initiatives, please visit the website below.
https://www.mol.co.jp/csr/hr/health/index.html
40
41
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Dialogue between
the Outside Directors
Hideto Fujii
Outside Director
Etsuko Katsu
Outside Director
MOL is striving to further enhance its governance
to realize growth through reinvention.
The Company’s outside directors Hideto Fujii and Etsuko Katsu discussed how MOL should strengthen
its governance in order to get into new fields beyond conventional ocean shipping business and to realize
the 10-year vision to “Become a Group of Business Units with No. 1 Competitiveness in Respective Areas”
amid dramatic changes in the external environment.
Evaluation of MOL’s Governance
intensifying geopolitical risks and the rise of protec-
are made, and I believe this was an excellent trend for
tionism, leading companies in the ocean shipping
the Company to adopt.
industry in particular are facing increasingly difficult
Katsu: In the past two years, the volume of information
challenges. Seeing the hardships that are arising in
that is shared at Board meetings has greatly increased,
this industry, it was an extremely important action for
thereby helping the directors to be better aware of the
the Company to transition to “Rolling Plan,” which is
particular details of each issue. Especially in the case
flexible and agile, rather than adhere to a conven-
of the integration of the containership business, there
tional medium-term management plan that aims to
has been a significant increase of information since
pursue a set vision and strategies for several years.
last year, despite the fact that several details were
Fujii: Since I took on the position of outside director,
actually not communicated in the beginning of the
there have been two major changes. The first change
integration process. Also, in order to take proactive
was the improvements the Company has made to the
steps to address risks that would likely materialize
format and process regarding projects brought up at
as losses in the future fiscal years, the Company set
Board meetings. Discussions are now held on specific
aside adequate provisions and extraordinary loss
projects with a clear awareness of their level of strategic
related to the integration. The speed at which the
importance or of their relationship with “Rolling Plan.”
Company was able to do this is something I believe
By determining a clear focus, the Company is now
deserves praise.
able to sufficiently deliberate the most important
Fujii: At the time of the NIPPON MARU accident last
aspects pertaining to each project with a sense of
year, the measures the Company should take to
speed. The other significant change was that the
respond to the accident and prevent a reoccurrence
Company has been able to set up opportunities to
were promptly reported to Board of Directors. It was a
actively share issues relating to projects and discuss
good example showing the Company’s well-functioning
during the examination phase of a project. Such an
governance. I have a high opinion of the swift
opportunity allows for more specific discussions
responses taken against scandal, more so than the
toward a project’s realization before final decisions
action toward business growth.
The Role the Nomination Advisory Committee and
the Remuneration Advisory Committee Should Play
Katsu: As can be seen in the revision of Japan’s
as the direction to develop them. The Nomination
Corporate Governance Code, we are being constantly
Advisory Committee should become more involved
Fujii: In my evaluations of MOL’s governance, the
discussions were consistently held with a global view far
reminded how the role of committees has become more
when the Company considers the qualities, the size of
extremely open and natural discussions that are
beyond Japan-based perspectives and ways of thinking.
and more significant in terms of meeting social demands.
the pool, and the evaluation standards for candidates.
held at Board meetings have always impressed me.
Fujii: Given MOL’s history of having developed as a
When it comes to director nomination, the face-to-face
Furthermore, for the Remuneration Advisory
Since the start of my position, I recognized that such
major player in the ocean shipping industry, it may be
information, which we can obtain as outside directors, is
Committee, there is a need to incorporate non-financial
discussions have been an unchanging part of MOL’s
easy to become optimistic and assume that MOL can
somewhat limited compared with inside directors, and
indicators in evaluations, in addition to short-,
corporate culture. They enable the Company to provide
naturally continue to enjoy such position going forward.
it is therefore important to have a large number of
medium-, and long-term contribution to profit. Also,
a foundation for and play an important role in enhancing
However, based on the dramatically changing global
opportunities to receive information that helps us gain
the committee should deepen its discussions on the
the effectiveness of the Company’s governance.
economy, MOL is anticipating the future and taking
an understanding of future management candidates.
ideal evaluation standards and remuneration levels
Katsu: I also give the Company high praise for having
steps by actively promoting a forward-thinking
In the case of MOL, we have been given opportunities
regarding efforts toward projects with future potential
a corporate culture that facilitates the open exchange
approach and carefully selecting businesses to be
to meet with the candidates rather frequently at training
and other qualitative aspects.
of opinions. From the beginning of my assignment,
preferentially invested within its portfolio.
programs and presentations given at Board meetings.
The roles of both of these committees have
I have had the impression that MOL was a global
Katsu: “Rolling Plan,” which entails reviewing the
These are extremely valuable opportunities for us.
become more significant than ever from the points of
company given the nature of its business. Through
Company’s medium-term management plan each
Fujii: At a recent meeting of the Nomination Advisory
eliminating arbitrariness, ensuring transparency and
the actual discussions, I was truly moved by how
year, is an extremely good idea. Taking into account
Committee, we discussed how we should select the
fairness, and establishing an effective framework to
open-minded the Company’s approach was and how
the current external environment, including
candidates for future management positions as well
increase sustainable corporate value.
42
43
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Dialogue between the Outside Directors
Evolution of Governance to Accelerate Growth through Reinvention
Reinforcement of Risk Management during This Period of Change
Fujii: In the process of strategically allocating
Katsu: When it comes to risk management, in addition
resources toward becoming a “Group of Business
to the “Total Risk Control”* approach, which considers
Units with No. 1 Competitiveness in Respective Areas,”
things from a set point in time, it is also important to
the business fields that are highly specialized and enable
adapt and appropriately respond to the situation at
differentiation should be prioritized. However, the
the time. For example, for the currently popular topic
specific projects that the Company should pursue in
of clean energy transport, it goes without saying that
the future will likely be more complex both qualitatively
its initial evaluation varies as time passes due to
and quantitatively due to the further diversification of
changes in the external environment and the compe-
countries in which these projects take place and the
tition conditions. While the “Rolling Plan” already
increasing scale of investment. For overseas projects,
requires such mechanism, the Company must carefully
an even wider range of risk factors is to be considered.
monitor the changes occurring with each project and
Also, the larger the scale of investment becomes,
make swift decisions.
the more sophisticated risk management is required
from various aspects, including deciding what scheme
to go with, diversifying risk through joint investment,
and establishing project finance frameworks. At the
same time, it is essential that the Company thoroughly
* “Total Risk Control” is a unique risk management method in the industry
developed by the Company based on management methods commonly
used in financial institutions. The method controls the total amount of risk
in the whole fleet at a level that is less than the Company’s shareholders’
equity even in the event that the market continues to be at historically low
levels for an extended period of time.
monitor the ongoing projects. As the conditions
Fujii: Reflecting on MOL’s risk management to date,
surrounding a project can change rapidly, the Company
the relative comparisons between its shareholders’
needs to be always well aware of how its evaluation
equity and overall risk amount were done properly
varies from when the investment is decided and
and periodically. Meanwhile, the Company sometimes
swiftly adjust the plan depending on the situation.
was unable to utilize its risk control method in
Accordingly, it is of the utmost importance that the
decision-making for investment. However, each
Board of Directors enact a two-pronged approach
division has better recognized its importance through
relying on beforehand risk management enhancement
repeated discussions on specific projects, including
and continuous monitoring.
the recent integration of the containership business.
While aiming to enhance corporate value over
the medium to long term, it is also extremely
important for a company to increase its presence
as an entity that contributes to the sustainability
of society and the resolution of social issues.
As projects become more complex
both qualitatively and quantitatively,
it is of the utmost importance that the
Board of Directors ensures beforehand
risk management enhancement and
continuous monitoring.
Accordingly, the “Total Risk Control” approach is being
Directors can steer the Company as a whole. As outside
applied even more thoroughly.
directors, we will therefore confirm whether the
Katsu: It is important that each division understands
Company is consistently making decisions incorporating
risk management perspectives and controls risks
global trends and is heading toward the appropriate
independently. At the same time, the most crucial
direction from a macro perspective.
aspect in risk management is how the Board of
ESG Initiatives to Ensure Sustainability
Katsu: While strengthening cash flows is obviously
contribute more extensively to social activities such
necessary in the aim to enhance corporate value over
as education.
the medium to long term, it is also extremely important
Katsu: I have also experienced this kind of DNA within
for a company to increase its presence as an entity
the mindset of personnel involved in ocean shipping.
that contributes to the sustainability of society and the
In terms of “Rolling Plan,” environmental perspectives
resolution of social issues such as those adopted
are being incorporated deeply within the strategies
under the SDGs. MOL includes environmental and
from the standpoint of both business opportunities
governance-related goals within its “Rolling Plan,”
and risk, such as the Company’s participation in clean
as management that integrates ESG elements is
energy fields and its response to SOx regulations. In
becoming key.
addition, as diversity is becoming increasingly
Fujii: Recently, companies are required to respond to
important, the Company newly appointed a female
multifaceted issues such as social and environmental
Audit & Supervisory Board member and an executive
issues from an ESG standpoint. This trend can also
officer in fiscal 2019. I hope to see MOL hold discussions
be a new business opportunity. MOL has traditionally
from more diversified viewpoints going forward.
shared a DNA of contributing widely to society, for
Although MOL tends to be seen as a male-dominated
which it should be proud. While deepening the
company, there is actually a considerable number of
knowledge and faculty cultivated by the many social
women working in managerial positions as well as
contributions the Company has made through its
non-Japanese staff. Therefore, I can expect more
businesses, I would like to see MOL move forward
from the future human resources strategy that takes
with projects to reduce environmental burden and
diversity into account.
44
45
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Board of Directors, Audit &
Supervisory Board Members, and Executive Officers
(As of June 25, 2019)
Junichiro Ikeda
Representative Director
Born 1956
Shizuo Takahashi
Representative Director
Born 1959
Takeshi Hashimoto
Representative Director
Born 1957
Apr. 1979
Jun. 2004
Jun. 2007
Jun. 2008
Jun. 2010
Jun. 2013
Jun. 2015
Joined Mitsui O.S.K Lines, Ltd.
General Manager of Human
Resources Division
General Manager of Liner Division
Executive Officer
Managing Executive Officer
Director, Senior Managing
Executive Officer
Representative Director,
President, Chief Executive Officer
(to present)
Apr. 1981
Jun. 2006
Jun. 2008
Jun. 2010
Jun. 2011
Jun. 2014
Jun. 2015
Apr. 2018
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of Corporate
Planning Division
Executive Officer, General Manager
of Corporate Planning Division
Executive Officer
Managing Executive Officer
Director, Managing Executive Officer
Director, Senior Managing
Executive Officer
Representative Director, Executive
Vice President, Executive Officer
(to present)
Apr. 1982
Jun. 2008
Jun. 2009
Jun. 2011
Jun. 2012
Jun. 2015
Apr. 2016
Apr. 2019
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of LNG Carrier
Division
Executive Officer, General
Manager of LNG Carrier Division
Executive Officer
Managing Executive Officer
Director, Managing Executive Officer
Director, Senior Managing
Executive Officer
Representative Director, Executive
Vice President, Executive Officer
(to present)
Akihiko Ono
Director
Born 1959
Takashi Maruyama
Director
Born 1959
Hideto Fujii
Outside Director
(Independent Officer)
Apr. 1983
Jun. 2010
Jun. 2011
Jun. 2015
Apr. 2017
Jun. 2018
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of Corporate
Planning Division
Executive Officer, General
Manager of Corporate Planning
Division
Managing Executive Officer
Senior Managing Executive Officer
Director, Senior Managing
Executive Officer (to present)
Apr. 1983
Jun. 2010
Jun. 2011
Jun. 2015
Jun. 2017
Apr. 2018
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of Finance
Division
Executive Officer, General
Manager of Finance Division
Managing Executive Officer
Director, Managing Executive
Officer
Director, Senior Managing
Executive Officer (to present)
Jun. 2015
Jun. 2016
Adviser, Sumitomo Corporation
(to present)
Outside Director, Mitsui O.S.K.
Lines, Ltd. (to present)
Etsuko Katsu
Outside Director
(Independent Officer)
Masaru Onishi
Outside Director
(Independent Officer)
Kenji Jitsu
Audit & Supervisory Board Member
Born 1960
Apr. 2003
Mar. 2015
Jun. 2016
Nov. 2016
Apr. 2018
Mar. 2019
Professor, School of Political
Science and Economics, Meiji
University (to present)
Director, Center for Entrance
Examination Standardization
(to present)
Outside Director, Mitsui O.S.K.
Lines, Ltd. (to present)
Administrative Board Member,
International Association of
Universities (to present)
Chairman of Fund Management
Advisory Committee, The Japan
Foundation (to present)
Outside Director (Audit &
Supervisory Committee Member),
DENTSU INC. (to present)
Apr. 2013
Jun. 2015
Jul. 2018
Jul. 2018
Oct. 2018
Jun. 2019
Jun. 2019
Trustee, KEIZAI DOYUKAI (Japan
Association of Corporate
Executives) (to present)
Trustee, International University
of Japan (to present)
Senior Representative, External Affairs,
Japan Airlines Co., Ltd. (to present)
Visiting Professor, Toyo University
(to present)
Advisor, Mitsubishi Heavy
Industries, Ltd. (to present)
Outside Director, Teijin Limited
(to present)
Outside Director, Mitsui O.S.K.
Lines, Ltd.
Apr. 1984
Jun. 2009
Jun. 2013
Jun. 2015
Jun. 2017
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of CSR and
Environment Office, Corporate
Planning Division
General Manager of Investor
Relations Office
General Manager of Accounting
Division
Audit & Supervisory Board
Member, Mitsui O.S.K. Lines, Ltd.
(to present)
Toshiaki Takeda
Audit & Supervisory Board Member
Born 1964
Hideki Yamashita (Independent Officer)
Outside Audit & Supervisory Board Member
Junko Imura
Outside Audit & Supervisory Board Member
(Independent Officer)
Apr. 1986
Jun. 2015
Apr. 2018
Jun. 2019
Joined Mitsui O.S.K. Lines, Ltd.
General Manager of General
Affairs Division
General Manager of Secretaries &
General Affairs Division
Audit & Supervisory Board
Member, Mitsui O.S.K. Lines, Ltd.
(to present)
Apr. 1982
Apr. 1985
Mar. 2012
Jun. 2014
Registered as an attorney at law
Established YAMASHITA HIDEKI
LAW OFFICE (now YAMASHITA &
TOYAMA LAW OFFICE) (to present)
Outside Corporate Auditor, I-cell
Networks Corp. (to present)
Outside Audit & Supervisory
Board Member, Mitsui O.S.K.
Lines, Ltd. (to present)
Aug. 1994
Sep. 2015
Jul. 2018
Jun. 2019
Registered as a certified public
accountant
Visiting Professor, Tama Graduate
School of Business (to present)
Established Imura Accounting
Office (to present)
Outside Audit & Supervisory
Board Member, Mitsui O.S.K.
Lines, Ltd. (to present)
46
47
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Board of Directors, Audit & Supervisory Board Members, and Executive Officers
Executive Officers
Junichiro Ikeda
President, Chief Executive Officer
Masanori Kato
Managing Executive Officer
Tsuneo Watanabe
Executive Officer
Shizuo Takahashi
Executive Vice President, Executive
Officer
(Assistant to President, Chief Compliance
Officer, Chief Information Officer, Deputy
Director General of Technology
Innovation Unit, Responsible for: The
Americas Area, Kansai Area, Corporate
Audit Division, Secretaries & General
Affairs Division, Corporate Marketing
Division, MOL Information Systems, Ltd.)
Takeshi Hashimoto
Executive Vice President, Executive
Officer
(Assistant to President, Director General
of Energy Transport Business Unit, In
charge of Human Resources Division,
Responsible for: Europe and Africa Area,
Energy Business Strategy Division,
Bunker Business Division)
Akihiko Ono
Senior Managing Executive Officer
(Deputy Director General of Safety
Operations Headquarters, Deputy
Director General of Product Transport
Business Unit, Responsible for:
Corporate Planning Division, Liner
Business Management Division)
Takashi Maruyama
Senior Managing Executive Officer
(Chief Financial Officer, Responsible for:
Corporate Communication Division (IR),
Finance Division, Accounting Division)
Yoshikazu Kawagoe
Senior Managing Executive Officer
(Chief Technical Officer, Director General
of Technology Innovation Unit,
Responsible for: Technical Division,
Smart Shipping Division, Secondarily
Responsible for MOL Information
Systems, Ltd.)
Koichi Yashima
Senior Managing Executive Officer
(Responsible for: Asia, the Middle East,
Oceania Area, Managing Director of MOL
(Asia Oceania) Pte. Ltd.)
(Chief Safety Officer, Director General
of Safety Operations Headquarters,
Responsible for: Human Resources
Division, Marine Safety Division,
Secondarily Responsible for Smart
Shipping Division)
Kenta Matsuzaka
Managing Executive Officer
(Deputy Director General of Energy
Transport Business Unit, Responsible for:
LNG Carrier Division, LNG Marine
Technical & Ship Management Strategy
Division)
Masato Koike
Managing Executive Officer
(Deputy Director General of Energy
Transport Business Unit, Responsible for:
Tanker Division (A), Tanker Division (B),
Secondarily Responsible for Bunker
Business Division)
Yutaka Hinooka
Managing Executive Officer
(Deputy Director General of Energy
Transport Business Unit, Responsible for:
Tanker Division (B) (Chemical Tanker
Business), Managing Director of MOL
Chemical Tankers Pte. Ltd.)
Atsushi Igaki
Executive Officer
(Deputy Director General of Product
Transport Business Unit, Responsible for
Ferry Business Division, Chairman of
Ferry Sunflower Limited)
Hiroyuki Nakano
Executive Officer
(Deputy Director General of Energy
Transport Business Unit, Responsible for
Offshore Project Division)
Hirotoshi Ushioku
Executive Officer
(Deputy Director General of Product
Transport Business Unit, Responsible for
Car Carrier Division)
(Director General of Product Transport
Business Unit, Responsible for Port
Projects & Logistics Business Division)
Michael P.Y. Goh
Executive Officer
Kayo Ichikawa
Executive Officer
(Chief Communication Officer,
Responsible for: Work Efficiency
Improvement, Sustainability Promotion,
Corporate Communication Division,
Secondarily Responsible for: Corporate
Planning Division, Human Resources
Division)
Toshinobu Shinoda
Executive Officer
(General Manager of Corporate Planning
Division)
Hirofumi Kuwata
Executive Officer
(Deputy Director General of Dry Bulk
Business Unit, Deputy Director General
of Energy Transport Business Unit,
Responsible for: Steaming Coal & Energy
Project Division, New & Clean Energy
Business Division)
(Deputy Director General of Product
Transport Business Unit, Responsible for
Port Projects & Logistics Business
Division (NVOCC Business), Secondarily
Responsible for Asia, the Middle East,
Oceania Area, Chief Executive Officer of
MOL Consolidation Service Ltd.)
Kazuhiko Kikuchi
Executive Officer
(Deputy Director General of Dry Bulk
Business Unit, Responsible for Wood
Chip Carrier Division, General Manager
of Bulk Carrier Division)
Junko Moro
Executive Officer
(Responsible for: Diversity Promotion,
Human Resources Division)
Mitsuru Endo
Executive Officer
(Deputy Director General of Safety
Operations Headquarters, Responsible
for: Marine Technical Management
Division, LNG Marine Technical & Ship
Management Strategy Division,
Secondarily Responsible for: Marine
Safety Division, Smart Shipping Division)
Toshiaki Tanaka
Managing Executive Officer
Nobuo Shiotsu
Executive Officer
(Director General of Dry Bulk Business
Unit, Responsible for: Dry Bulk Business
Planning & Co-ordination Division, Bulk
Carrier Division)
(Deputy Director General of Dry Bulk
Business Unit, Responsible for Iron Ore
and Coal Carrier Division)
Corporate Governance
Governance Summary
Governance System
Company with an Audit &
Supervisory Board
Total Directors
8
Including outside directors (ratio)
3 (37.5%)
Total Audit & Supervisory
Board Members
4
Including outside Audit & Supervisory
Board members (ratio)
2 (50%)
Independent Officers
(Directors and Audit &
Supervisory Board Members)
5
Number of Board Meetings
Held in Fiscal 2018
Attendance Rate of
Outside Directors for Board
Meetings in Fiscal 2018
10
100%
Term of Directors
Stock Option System
1 year
Yes
Retirement Benefit System
Anti-Takeover Measures
Compliance Rules
No
No
Yes
External Compliance
Advisory Service Desk
Yes
2000 Management organization reform:
HISTORY
1. Introduced system of executive officers
2. Established the Executive Committee
3. Reformed the Board of Directors (positioned as highest-
ranking decision-making body and supervisor of business
activities), reduced membership from 28 to 12
4. Appointed two outside directors
5. Established the Corporate Visionary Meeting
Established the IR Office
Started scheduling Annual General Shareholders’ Meeting
to avoid overlapping with other shareholders’ meetings
2001
2011
2014
2015
2017
Formulated Compliance Policy, established the
Compliance Committee
Revised MOL’s Compliance Policy and Rules
of Conduct
Revised the Compliance Policy, established Chief
Compliance Officer (CCO)
Established the Nomination Advisory Committee
and Remuneration Advisory Committee (chaired by
outside directors)
Established independence determination standards
for outside directors and Audit & Supervisory
Board members
Corporate Governance for Sustainable Growth and Enhancement of Corporate Value
MOL greatly shored up its management structure around 2000.
utilize management resources in a careful balance of offense
Taking a lead position among Japanese companies at that time,
and defense. We believe that the essentials of corporate
MOL established an advanced and highly transparent corporate
governance are fostering sustainable growth and increasing
governance structure by, for example, inviting outside directors
corporate value by making decisions swiftly and boldly, guided
and introducing an executive officer system. The business
by appropriate risk management, while ensuring the transparency
environment surrounding the marine transport business and
and fairness of management and carefully considering
its risk factors change rapidly. In order to navigate through such
the viewpoints of our diverse stakeholders. Based on this
a difficult situation, we must accurately grasp our business
belief, we will make continuous efforts to promote our level
environment, always confront risks appropriately, and effectively
of corporate governance.
48
49
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Corporate Governance
Corporate Governance System
MOL has established a corporate governance system that
we have expanded the scope of authority transferred to the
maximizes shareholder profits through appropriate allocation
Executive Committee, and narrowed down and reviewed which
of management resources, with high transparency of corporate
issues to be taken up by the Board so that more of its meeting
management from a shareholder's perspective. The Board of
time can be used to discuss the MOL Group’s long-term vision
Directors, with the participation of independent outside directors,
and strategy direction and supervise management.
supervises and encourages business operations, which are
At MOL, we believe that the true strength of corporate
carried out by the president as chief executive officer. In addition,
governance is drawn out not by its structure or organization,
as a company with an Audit & Supervisory Board, business and
but by whether or not it functions effectively. The framework
accounting audits are conducted by four Audit & Supervisory
described in the preceding paragraphs is operated in the
Board members, including two outside members.
manner outlined in the following sections.
To enhance the functionality of the Board of Directors,
The Board of Directors comprises five internal directors and
discusses and decides on basic policies and the most important
three outside directors who have no stake in the Company. As
matters related to MOL Group management.
the Company’s highest-ranking decision-making body, it
Board of Directors
Deliberation on Corporate Strategy and Vision
At every Board meeting, one hour out of the three is committed
to “Deliberation on Corporate Strategy and Vision,” where
opinions are exchanged freely in regard to our management
strategies, long-term vision, and overall management in
general, including outside directors and outside Audit &
Supervisory Board members.
Agenda for Fiscal 2018
Month
Agenda
May
July
Direction and strategy for technological innovation
Strategy for international logistics business
September Strategy for offshore businesses
October
Direction of next management plan
December
Corporate marketing strategy
January
Strategies of Non-Vessel Operating Common
Carrier (NVOCC) business expansion
February
Overall summary of “Rolling Plan 2019”
Corporate Governance Organization (as of June 25, 2019)
General Shareholders’ Meeting
Elect and appoint / dismiss
Business audit /
accounting audit
Board of Directors (Total: 8)
Elect and appoint / dismiss
Audit & Supervisory Board
(Total: 4) Outside members: 2
Internal members: 2
Elect and
appoint /
dismiss
Chairman
Male
Female
Outside directors: 3
Internal directors: 5
Accounting audit
Audit & Supervisory Board Manager
Accounting Auditors
Elect and
appoint /
supervise
Elect and
appoint /
supervise
Submit basic manage-
ment policies and
other issues for
discussion
Report
Nomination Advisory
Committee (Total: 4)
Outside directors: 3
Internal directors: 1
Executive Committee (Total: 9)
Report
Remuneration Advisory
Committee (Total: 4)
Outside directors: 3
Internal directors: 1
Internal directors and executive officers: 9
Provide direction
on important
business issues
Submit to Executive Committee
after preliminary deliberations
Submit for discussion and / or report on
important business and other issues
Committees under the Executive Committee
STEER Committee, Investment and Finance Committee, Operational
Safety Committee, Compliance Committee, SOx Emissions Regulation
in 2020, and Environmental Management Committee
Executive Officers (Total: 24)
Submit for discussion and / or report on
important business and other issues
Instruction
Audit plan /
audit report
Collaborate with
Audit & Supervisory
Board members and
Accounting Auditor
Directors /
Executive officers: 5
Executive officers: 19
Divisions / Branches / Vessels / Group companies
Business audit / accounting audit
Corporate Audit Division
For Effective Corporate Governance
Assessment of Board Effectiveness
MOL regards enhancing corporate governance as an important
year. The results of this this assessment is used to improve
management issue to ensure sustainable growth. Accordingly,
Board effectiveness further.
Nomination Advisory Committee and Remuneration Advisory Committee
effectiveness of the Board of Directors is assessed each fiscal
MOL created the Nomination Advisory Committee and the
standpoint emphasizing the perspective of shareholders. The
Remuneration Advisory Committee as discretionary organizations
Nomination Advisory Committee focuses on the selection and
under the Board of Directors. In order for outside directors to
dismissal of directors and executive officers. The Remuneration
supervise directors responsible for business execution more
Advisory Committee focuses on the remuneration of officers,
effectively, both committees are chaired by an outside director and
including incentives for contributing to long-term enhancement of
comprised of three outside directors and the Company president
corporate value. The Board of Directors respects the advice from
(as of June 25, 2019). Each committee discusses from an objective
both committees and makes necessary resolutions.
Meetings in Fiscal 2018
Nomination Advisory Committee Number of meetings: 4
Chair of committee: Masayuki Matsushima
Members: Koichi Muto, Junichiro Ikeda, Masayuki Matsushima,
Remuneration Advisory Committee Number of meetings: 4
Chair of committee: Hideto Fujii
Members: Koichi Muto, Junichiro Ikeda, Masayuki Matsushima,
Hideto Fujii, Etsuko Katsu
Hideto Fujii, Etsuko Katsu
Main Agenda
• Selection process for the president
• Involvement of Nomination Advisory Committee in election and
dismissal of Audit & Supervisory Board members
• Election of officers (including outside officers) for fiscal 2019
Main Agenda
• Bonus for directors for fiscal 2017
• Remuneration for directors in fiscal 2018
• Formula for remuneration for executive officers
Measures Taken to Improve the Board of Directors in Fiscal 2018
The Company implemented various measures in light of issues raised from the effectiveness assessment of the preceding fiscal year. MOL
shifted more authority to the Executive Committee, enhanced prior explanation of issues to be brought up to the Board of Directors, held
“Board Member Discussion Sessions” to facilitate early-stage discussion and share information of important matters, and simplified its
materials for use in meetings.
Summary of Assessment in Fiscal 2019
Elicit feedback from Board of Directors and Audit &
Supervisory Board members via self-evaluation questionnaire
Summarize results
of questionnaire
Report results and hold discussions
at the Board of Directors' meeting
Main Items Rated in
the Self-Evaluation Questionnaire
• Composition of the Board of Directors
• Quality of discussion and appropriate-
ness of risk management
• Effectiveness of discussions pertaining
to management plan
• Management of “Deliberation on
Corporate Strategy and Vision”
Assessment Results in Fiscal 2019
After an assessment, it was concluded that the Board of Directors' meeting operated
with a sufficient level of effectiveness under an appropriate composition. Especially,
the simplification of materials implemented in fiscal 2018 improved discussions at
meetings, and that “Board Member Discussion Sessions” served as an opportunity for
fruitful exchanges of information and opinions. There were some constructive opinions
on agenda, time allocation, and ideal explanations for further improvement, which are
recognized as issues to work on.
Executive Committee and Committees
Training for Directors and Audit & Supervisory Board Members
Within the scope of the basic policy approved by the Board of
There are six committees under the Executive Committee to
Directors, MOL transfers a significant amount of authority to
study and deliberate especially important matters, which will be
conduct businesses to the Executive Committee. This helps to
brought to the Executive Committee, and matters straddling
speed up decision-making on individual matters by the president
divisions (see the chart on page 51).
and the executive officers.
MOL provides opportunities for directors and Audit &
supervisory function is in place. For example, they are given an
Supervisory Board members to acquire the knowledge and
orientation upon their appointment to understand the nature of
expertise necessary to fulfill the duties of each role. Expenses
the Company’s businesses. Moreover, in order to improve
related to this training are covered by the Company.
deliberations at Board meetings, discussion topics are shared and
Furthermore, support system for outside directors and Audit
explained beforehand on paper or face to face and timely reporting
& Supervisory Board members to increase the effectiveness of its
is made whenever an important business execution takes place.
50
51
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Corporate Governance
Appointment and Dismissal Process of Directors and Audit & Supervisory Board Members
Compensation for Directors, Audit & Supervisory Board Members, and Independent Public Accountants
MOL appoints a variety of directors with different backgrounds
submitted to the Board of Directors after gaining the approval of the
in terms of areas of expertise and experience, whether they be
Audit & Supervisory Board.
officers with a deep knowledge of Company business or outside
directors and Audit & Supervisory Board members who bring an
Selection Criteria for the Board of Directors
independent and objective viewpoint.
The Company has set up the Nomination Advisory Committee
in order to add objectivity and transparency to the selection process
and improve accountability in the selection of directors and Audit &
Supervisory Board members. The committee selects the candidates
a) Candidates must possess extensive experience and knowledge
and be capable of enhancing the Company’s corporate value
b) Candidates must have a broad viewpoint, foresight, and be able
to make management decisions from a global perspective
c) Candidates must possess high moral fiber and good sense
based on its set of selection criteria and give advices to the Board of
Selection Criteria for Audit & Supervisory Board Members
Directors. The Board then nominates the candidate directors and
a) Candidates must have an appropriate set of experience, qualifi-
Audit & Supervisory Board members, taking into account advice
from the Nomination Advisory Committee.
Candidates for Audit & Supervisory Board members are
cation, ability, and expertise
b) Candidates must possess a high degree of financial and
accounting knowledge (more than one member)
Role of Outside Directors and Outside Audit & Supervisory Board Members
To incorporate an outside perspective in Company management
and to add a layer of supervision to business execution, the
Major Activities of the Outside Directors in Fiscal 2018
Company appoints three outside directors. Outside directors
confirm the appropriateness of management decisions and
check the status of business operations from a shareholder’s
perspective based on their individual experience and knowledge,
while playing a major role in revitalizing the Board of Directors
by expressing beneficial opinions regarding overall management.
In addition, two of the four corporate Audit & Supervisory Board
members are selected from outside. As the importance of the
audit system in a company has increased, the Company ensures
the independence of a corporate Audit & Supervisory Board
member from management and execution. A total of five, including
three outside directors and two outside Audit & Supervisory
Board members, have been designated as independent officers.
Please refer to Independence Criteria for Outside
Officers on page 18 of the
NOTICE OF CONVOCATION OF THE ORDINARY
GENERAL MEETING OF SHAREHOLDERS.
https://www.mol.co.jp/en/ir/stock/gms/pdf/notice19.pdf
Reasons for Appointment of Outside Directors
• Lectures and discussions in director training sessions (Tokyo)
• Attendance at the inauguration ceremony and observation of
MOL Magsaysay Maritime Academy (MMMA) (Philippines)
• Discussion meetings with MOL Group companies (Singapore)
Outside directors Mr. Matsushima (Top row, left) and Ms. Katsu (Bottom row,
left) at inauguration ceremony for MMMA (Philippines)
Name
Hideto Fujii
(Reappointed)
Etsuko Katsu
(Reappointed)
Mr. Fujii has many years of experience and expertise from his involvement in Japan’s economic management and
policy finance. Using such experience and insight, he proactively contributes to discussions at meetings of the Board
of Directors from a position of independence and fairness, and appropriately fulfills his role as a supervisor of the
Company’s execution of operations. He has also contributed to enhancing the transparency and objectivity of
decision-making procedures in the Nomination Advisory Committee and the Remuneration Advisory Committee.
Ms. Katsu proactively contributes to discussions at meetings of the Board of Directors from a fair and independent
standpoint, reflecting her extensive knowledge and insight as an expert in international economics and finance,
experience in university management, and experience and knowledge regarding global human resource development
initiatives. As such, she appropriately fulfills her roles such as supervising the Company’s business execution.
She has also contributed to enhancing the transparency and objectivity of decision-making procedures in the Nomination
Advisory Committee and the Remuneration Advisory Committee.
Masaru Onishi
(Newly appointed)
We believe that Mr. Onishi will contribute to increasing the Company’s corporate value while maintaining and
strengthening its corporate governance, drawing on his considerable experience and achievements as a corporate
manager and his extensive experience in the operation of boards of directors at other companies as a chairman.
Hideki Yamashita
(Current)
Mr. Yamashita has many years of experience, specialized knowledge, and a strong dedication to compliance as an
attorney at law, and he effectively fulfills his duties as an Audit & Supervisory Board member responsible for auditing
management and execution of business operations from a fair and objective standpoint.
Junko Imura
(Newly appointed)
Ms. Imura has many years of experience as a certified public accountant and extensive knowledge related to accounting.
We therefore deem that she will be able to competently carry out her duties as an outside Audit & Supervisory Board
member who performs audits of management and business execution from a position of objectivity and fairness.
MOL adopts a performance-based compensation system for
directors as motivation to increase corporate value in the
medium to long term, and as an appropriate means to secure
talent. Furthermore, the Remuneration Advisory Committee
deliberates over compensation and treatment system such as
calculation methods and individual remuneration for members
of the Board of Directors, including outside directors.
Compensation for the Audit & Supervisory Board members
is determined within the limits approved at the General
Shareholders’ Meeting, with consideration given to whether it
is full- or part-time employment, the amount of auditing work
assigned, and the levels of director compensation, after discus-
sion with the Audit & Supervisory Board. Bonuses and stock
options are not provided to Audit & Supervisory Board members.
The amounts of compensation for directors, Audit & Supervisory
Board members, and independent public accountants are as follows.
Director Compensation System
[Monthly Remuneration] Each director receives monthly compen-
sation based on their position and level.
[Bonuses] Bonuses are determined based on performance and
provided in June every year. It is a set amount calculated according
to the Company’s performance, adjusted based on director position,
added to an individual bonus calculated based on performance of
the division for which the director is responsible.
(Performance-based compensation is determined by the degree to which
the Company meets performance goals, dividend payout ratio target, and
qualitative goals in its management plan. The qualitative goals are evaluated
based on the specific progress made in the following three areas: 1) The
Company’s investment and business strategies, 2) Enhancing awareness
of long-term goals and improving competitiveness in pricing, and 3)
Highlighting theme of priority areas which supports meeting long-term goals.
[Stock Options] Stock options are granted every August to directors,
based on each director’s position.
Compensation for Directors and Audit & Supervisory Board Members
Compensation for the Accounting Audit & Supervisory Board Members
No. of people
remunerated
Total remuneration
(Millions of yen)
Directors (excluding outside directors)
Audit & Supervisory Board members
(excluding outside members)
Outside directors and outside members
Total
7
2
5
14
381
65
61
507
Compensation
for audit
operations
(Millions of yen)
Compensation
for non-audit
operations
(Millions of yen)
Total
(Millions of yen)
Parent company
Consolidated subsidiaries
Total
88
109
197
1
2
4
89
111
201
Internal Control System
MOL has put in place a basic policy on the establishment of internal
compliance. In fiscal 2018, 5,874 employees took lectures on
control systems* and extends beyond the scope required by law to
antitrust or competition law, while 5,503 employees took lectures
promote activities to further enhance MOL Group management
on anti-corruption (anti-bribery). In addition, employees are
effectiveness, efficiency, and transparency, namely ensuring the
required to attend in-person lectures on antitrust law upon
appropriateness of business operations and the trustworthiness of
reaching new management levels, and the Company provides
financial reporting. The following are extracts from the policy on
annual antitrust seminars for officers and employees.
two topics: 1) Compliance, and 2) Role of the Audit & Supervisory
Board members.
2. Role of the Audit & Supervisory Board Members
* The policy was approved by the Board of Directors in 2006, with final revisions made
MOL has determined rules regarding reporting to its Audit &
headed by the Chief Compliance Officer, and formulated the
appropriate frameworks for reporting legal violations and other
Compliance Policy. General managers of each division are
compliance issues to Audit & Supervisory Board members.
appointed as Compliance Officers. They are responsible for
Furthermore, the representative directors strive to hold regular
enforcing compliance regulations within their division, and are also
meetings with Audit & Supervisory Board members, and the
required to report to the Compliance Committee in the event of
Corporate Audit Division works in coordination with the Audit &
a compliance breach. The Corporate Audit Division, a body that
Supervisory Board members to provide assistance. In these ways,
operates independently of the Company’s divisions, provides a
the Company actively facilitates effective auditing by the Audit &
counseling service regarding compliance. The division also
Supervisory Board members.
undertakes investigations of breaches and reports the results to
the Compliance Committee. In addition to the existing counseling
service, the Company set up an external advisory service desk,
which we entrusted an outside attorney to run. The desk offers
anonymous counseling services.
Furthermore, Group companies in Japan and overseas have
implemented e-learning in order to further promote thorough
E-learning Participation Rates for Fiscal 2018
Antitrust act or competition law
Anti-corruption (Anti-bribery)
Internal control
ICT governance
98.0%
98.1%
85.3%
91.1%
Note: E-learning sessions about antitrust act or competition law, anti-corruption
(anti-bribery), and ICT governance were conducted by MOL Group companies in
Japan and overseas. Sessions on internal control ware held only in Japan.
Reason for Appointment
The Company has set up a Compliance Committee, which is
in 2018.
1. Compliance
Supervisory Board members, creating a system in which directors,
executive officers, and employees report to the Audit & Supervisory
Board members on the important matters that may impact the
Company’s business or performance. These rules also safeguard
52
53
For Our Sustainable GrowthMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
At a Glance
FY2018 Performance (Consolidated)
Business Activities
Revenues by Segment
¥1,234.0
billion
Associated Businesses
and Others
9%
Associated
Businesses
8%
Product Transport
Business
44%
Car Carriers
18%
Containerships
22%
Ferries & Coastal
RoRo Ships
4%
Ordinary Profit (Loss) by Segment
(¥ billion)
Dry Bulk Business
21.9
Energy Transport Business
21.1
Product Transport Business (12.2)
Containership Segment
(14.3)
Associated Businesses
Others
Adjustments
Total
12.9
2.5
(7.7)
38.5
Dry Bulk Business
24%
Dry Bulkers
24%
Energy Transport
Business
23%
Tankers
12%
LNG Carriers /
Offshore Businesses
7%
Steaming Coal
Carriers
4%
Fleet Composition (Number of ships)
Fleet Composition (Deadweight tons)
Others
6%
Containerships
8%
Car Carriers
13%
LNG Carriers
/Offshore
Businesses
12%
839
Dry Bulkers
(including
Steaming
Coal Carriers)
39%
Tankers
22%
Containerships
9%
Car Carriers
3%
LNG Carriers /
Offshore
Businesses
12%
Tankers
26%
Dry Bulkers
(including
Steaming
Coal Carriers)
50%
63
million
Total Assets
¥2,134.4 billion
Equity Ratio
24.6 %
ROE
5.2 %
Gearing Ratio
2.11 times
Dry Bulk
Business
Energy
Transport
Business
Product
Transport
Business
Dry Bulkers
(excluding
Steaming Coal
Carriers)
With one of the world’s largest fleets, MOL reliably transports large
quantities of such dry bulk cargo as iron ore, coal, grains, logs, wood
chips, cement, fertilizer, and salt. Our fleet includes highly versatile bulk
carriers as well as specialized vessels for specific cargo types.
Tankers
With a tanker fleet that boasts one of the largest sizes in the world, MOL is
developing businesses globally. Our fleet includes crude oil tankers; product
tankers that carry naphtha, gasoline, and other refined petroleum products;
chemical tankers that carry liquid chemical products; methanol tankers that
exclusively carry methanol; and LPG tankers that carry liquefied petroleum gas.
LNG Carriers /
Offshore
Businesses
With the world’s largest LNG carrier fleet, MOL safely transports LNG,
which is experiencing growing global demand. In addition, we are active
in offshore businesses, including FPSOs and FSRUs, which are poised
for continued growth. Moving forward, MOL will vertically expand its
scope of services to include the operation of LNG to Powerships and
LNG receiving terminals, among others.
Steaming Coal
Carriers
MOL transports coal for thermal power generation, mainly on medium-
to long-term transport contracts with electric power companies in Japan.
Considering the expected growth, we also engage aggressively in coal
transport for emerging countries. As a member of the Energy Transport
Business Unit, the Steaming Coal & Energy Project Division coordinates
with other divisions in the Unit to meet diversifying customer needs.
Car Carriers
MOL stably provides transport services to meet the changing
needs of automakers moving production to optimal sites around the
world. We operate globally with specialized car carriers that can
effectively transport any type of vehicle from passenger cars to
construction equipment.
Containerships
Through a global network provided by Ocean Network Express (ONE),
a company formed by the integration of the containership businesses at three
Japanese shipping companies, we transport containers loaded with electric
products, automotive parts, clothes, furniture, food products, and numerous
other products to deliver them around the world. In addition to our self-
operated routes, we expand our network through joint operations with
partners, leading to wider port coverage and increased service frequency.
Also, we operate container terminals and logistics businesses in
Japan and overseas.
Ferries &
Coastal RoRo
Ships
MOL operates the ferry business, which transports passengers, passenger
cars and freight cars (trucks, trailers, etc.), and the coastal RoRo ships
business, specializing in the transport of freight vehicles. We are increasing our
presence as the leader of an eco-friendly modal shift in domestic logistics.
Associated
Businesses
Leveraging the know-how accumulated over more than 130 years
mainly in the marine transport business, we are promoting various
businesses in related activities including real estate, tugboats, a cruise
ship (the NIPPON MARU), and trading.
54
55
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Market Position (Fleet Size)
(March 2019)
All Vessel Types
0
200
400
600
800
(Number of vessels)
1,400
1,200
1,000
Dry Bulkers
(including Steaming Coal Carriers)
(Thousand DWT)
China COSCO
NYK
MOL
Oldendorff
APM-Maersk
K Line
MSC
China Merchants
CMA-CGM
Fredriksen
Hapag Lloyd
Euronav
0
20
Number of Vessels
40
DWT
839
6363
60
80
100
120
140
80,000
60,000
40,000
20,000
0
31,387
Oldendorff
China COSCO
NYK
MOL
K Line
Swiss Marine
(Million DWT)
Source: Companies’ published data and Clarksons
Source: MOL internal estimation based on each company’s published data,
Clarksons and Alphaliner
(Thousand DWT)
Tankers
30,000
25,000
20,000
15,000
10,000
5,000
0
16,359
China
COSCO
China
Merchants
Euronav
MOL
Bahri
NITC
Source: Companies’ published data and Clarksons
LNG Carriers
(including on order)
(Number of vessels)
100
93
80
60
40
20
0
MOL
NYK
Nakilat*
K Line
Teekay
Maran Gas
Maran Gas
In operation
On order
* Qatar Gas Transport Company Ltd. Source: MOL internal estimation
Note: The numbers include the vessels which are owned by each company (wholly or
partially) and the vessels for which vessel operation is entrusted to each company.
Market Data
Dry Bulker Market (BDI*1)
(Jan. 4, 1985=1,000)
2,000
1,500
1,000
500
0
2014/4
2015/4
2016/4
2017/4
2018/4
2019/4
Source: MOL internal calculation based on Tramp Data Service and others
*1 Baltic Dry Index
VLCC*2 Market (Arabian Gulf→Japan)
(US$/day)
120,000
100,000
80,000
60,000
40,000
20,000
0
2014/4
2015/4
2016/4
2017/4
2018/4
2019/4
Source: MOL internal calculation based on Clarksons
*2 Very Large Crude Carrier (300,000 DWT class)
(Number of vessels)
120 111
100
80
60
40
20
0
Car Carriers
Containerships
Containership Market (CCFI*3)
(Thousand TEU)
5,000
4,000
3,000
2,000
1,000
1,553
(Jan. 1, 1998=1,000)
1,500
1,200
900
600
300
0
MOL
NYK
K Line
EUKOR
GLOVIS
WWL
HOEGH
0
Maersk
MSC
CMA-CGM
Group
COSCO
Group
Hapag
Lloyd
Evergreen ONE
Hyundai
Yang
Ming
Source: MOL internal estimation
Note: Excluding spot-chartered vessels
Fleet capacity
On order
Source: Alphaliner
2014/4
2015/4
2016/4
2017/4
2018/4
2019/4
Europe Trade
U.S. West Coast Trade
U.S. East Coast Trade
Source: Shanghai Shipping Exchange
*3 China Containerized Freight Index
56
57
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of Operations by Segment
(From left)
(Responsible business area)
Nobuo Shiotsu
Executive Officer
Toshiaki Tanaka
Managing Executive
Officer
Deputy Director
General (Iron Ore &
Coal Carriers)
Director General
(Bulk Carriers)
Hirofumi Kuwata
Executive Officer
Deputy Director
General
Kazuhiko
Kikuchi
Executive Officer
Deputy Director
General (Wood Chip
Carriers)
Dry Bulk Business Unit
Portfolio
Highly specialized
Iron Ore
Carriers
Wood Chip
Carriers
Variable profits
Stable profits
General Bulk
Carriers
Less specialized
Dry Bulker Fleet Table (Number of vessels)
Standard DWT
At the end
of Mar. 2019
At the end
of Mar. 2018
Main cargo
Capesize
180,000
-
i
m
u
d
e
m
d
n
a
-
l
l
a
m
S
s
r
e
k
l
u
b
d
e
z
i
s
Panamax
Handymax
Small handy
Subtotal
Wood chip carriers
Short sea ships
Total
80,000
55,000
33,000
54,000
12,000
94
21
50
32
103
39
47
283
88
26
54
28
108
39
61
296
Steel raw materials (iron ore,
coking coal)
Iron ore, coking coal, steaming
coal, grains, etc.
Steaming coal, grains, salt,
cement, steel products, etc.
Steel products, cement, grains,
ores, etc.
Wood chips, soybean meal, etc.
Steel products,
plant equipment, etc.
Dry Bulkers
Opportunities
Segment Strengths
• Expanding business chances in overseas markets
• Trust-based relationships with customers
• Growth in cargo movements (grains, cement for infrastruc-
ture, chemical materials) due to increasing populations
• Extensive overseas network
• Ability to make proposals that flexibly meet diverse
• Increasing demand for biomass fuel transport
customer needs
Risks
• Change in the global economy stemming from the rise of
protectionism
• Increase in vessel operation costs due to the tightening
of SOx regulations
• Frontline capabilities at loading ports, discharging ports, and
vessels including marine technical skills
• Vessels designed suitably for the port facilities of customers
• A lean fleet with resilience to market fluctuations that has
been reinvented via the Business Structural Reforms (Small-
and medium-sized bulkers)
Market Environment and Business Opportunities
The dry bulker market had continued to experience an oversup-
Turning to transport demand, demand for iron ore, coal,
ply of vessels following the economic crisis in 2008 and reached
and wood chips is expected to remain solid for the time being.
a record low in 2016. Since then, however, the gap between
Additionally, in overseas markets such as China and India, the
fleet supply and demand has been gradually subsiding. While
competitive edge we have gained through the high quality of
there have been short-term fluctuations due to seasonal fac-
our transport services will likely provide us with growth oppor-
tors and issues in exporting regions, the market has been on
tunities. Also, the demand for biomass fuel transport has been
an overall trend of gradual recovery. In addition, fleet supply
increasing recently, becoming a rare source for long-term
is expected to temporarily decrease as scrubber installation
contracts in the market for small- and medium-sized bulkers,
reaches its peak during the second half of 2019 before the
where short-term contracts are mainstream. Accordingly, we
tightening of SOx regulations. This will likely have a positive
view biomass fuel as a potential profit foundation for the future.
impact on dry bulker market conditions.
Business Strategies
Steadily capture contract renewal demand from
domestic customers
Actively expand into overseas markets
Provide high-quality, comprehensive transport services that
leverage our marine technical skills and frontline capabilities
Flexibly develop and utilize good-quality and a competitive fleet
Progress and Outlook of Business
Fiscal 2018 in Review
Direction in Fiscal 2019
Iron Ore & Coal Carrier Division
We won medium- and long-term contracts by actively making
Iron Ore & Coal Carrier Division
We will strive to further enhance the quality of our transport
proposals that ascertained customer needs. In addition, we started
services by refining the on-site skills and marine technical
new businesses such as the transport of bauxite from Africa
skills that we have cultivated over the years. In addition, we will
via Capesize bulkers. In terms of profit, we worked on efficient vessel
respond to the needs of customers through initiatives toward
operation and optimal fleet allocation, thereby realizing a year-on-
eco-friendly transportation. By leveraging our expansive net-
year increase. Furthermore, as part of our efforts to pursue
work and information-collecting ability, we will continue to take
environmental and emission-free projects, since fiscal 2017
on challenges in new fields such as diverse cargo transport
we have continued to promote the Green Corridor Project,
that we have yet to be involved with to date.
which involves the joint production of LNG-fueled Capesize
bulkers with our customers.
Bulk Carrier Division
For small- and medium-sized bulkers, we have been narrowing
Bulk Carrier Division
In regard to small- and medium-sized bulkers, we will aim
for continuous growth while maintaining a balance between
cargo and fleet capacity. By forming diverse and competitive
down market exposure to establish a fleet that is resistant to
charter contracts, we will enhance our fleet’s resilience to
market fluctuations. This, combined with efficient vessel allocation,
changes in market conditions and further promote efficient
has allowed us to earn profits. In addition, we secured a long-term
vessel allocation, thereby maximizing profit.
contract for the transport of biofuel. Such long-term contracts
are rare in the field of small- and medium-sized bulk carriers.
Wood Chip Carrier Division
Demand for wood chip transport is expected to remain solid
Wood Chip Carrier Division
Pulp prices soared in fiscal 2018, which led to heightened
during fiscal 2019. We will work to win medium- and long-term
contracts in response to this demand. We will also leverage our
demand for the transport of wood chips, a raw material for
marine technical skills and network to flexibly make proposals
pulp. Accordingly, we realized an increase in profit. In addition,
and enact a swift response in accordance with the individual needs
we secured stable profits through such means as acquiring
new contracts and extending existing contracts.
of customers in Japan and overseas. In this way, we will further
strengthen the trust-based relationships we have with customers.
58
59
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of Operations by Segment
(From left)
(Responsible business area)
Tsuneo Watanabe
Executive Officer
Deputy Director General
(Chemical Tankers)
Masato Koike
Managing Executive
Officer
Takeshi Hashimoto
Executive Vice
President Executive
Officer
Kenta Matsuzaka
Managing Executive
Officer
Hirofumi Kuwata
Executive Officer
Deputy Director General
(Tankers)
Director General
Deputy Director General
(LNG Carriers)
Deputy Director General
(Steaming Coal
Carriers)
Hiroyuki Nakano
Executive Officer
Deputy Director General
(Offshore Businesses)
Energy Transport Business Unit
Portfolio
Highly specialized
Chemical
Tankers
LPG Tankers
Variable profits
Offshore
Businesses
LNG
Carriers
Crude Oil
Tankers
Methanol Tankers
Stable profits
Steaming
Coal Carriers
Product Tankers
Less specialized
Fleet Table (Number of vessels)
At the end of
Mar. 2019
At the end of
Mar. 2018
Crude oil tankers
Product tankers
Chemical tankers
Tankers
(Methanol tankers)
(MOLCT*)
LPG tankers
Subtotal
LNG carriers
(including ethane carriers)
FPSOs
FSU / FSRUs
Offshore
businesses
Subsea support vessels
Steaming coal carriers
42
21
110
(27)
(83)
8
181
87
6
4
3
47
39
39
87
(26)
(61)
8
173
83
5
1
1
41
* Chemical tankers operated by MOL Chemical Tankers
Tankers
Opportunities
• Expanding demand for offshore crude oil transport
• Increasing demand for gas oil following the tightening of
SOx regulations
• Growing demand in emerging countries
• Economic sanctions on Iran and Venezuela, oil production
cuts by OPEC, and other political risks such as trade conflicts
Segment Strengths
• Diverse tanker lineup
• Safe and high-quality fleet, vessel management capabilities,
• Increasing demand for chemical transport due to establishment
and marine technical skills
of new plants for chemical derived from shale gas
Risks
• Vessel supply pressure
• Declining oil demand in Japan and integration of Japanese
oil companies
• Social reliability and trust in business continuity capabilities
supported by the above
• Global business partnerships, including pool partners
• Long-cultivated customer relationships
Market Environment and Business Opportunities
For crude oil tankers, the trend of fleet capacity surplus has been
likely be created through the construction of new plants in North
continuing for several years. In addition, over the medium to long
America triggered by the shale revolution combined with increasing
term, oil demand in Japan is expected to decline, possibly inducing
chemical demand in emerging countries. Similarly, in terms of
further integration of oil companies. Optimization of vessel
LPG tankers, with the startup of the export terminals in North
allocation resulting from such integration could lead to a decrease
America, demand is expected to increase going forward, as
in transport demand. However, it is anticipated that demand in
long-distance trade to Southeast Asia and India—where demand
India and other emerging countries will continue to rise, and
continues to rise—increases. For product tankers, a rise in
demand for offshore crude oil transport will also expand.
demand for gas oil transport is anticipated due to the impact
For methanol and chemical tankers, transport demand will
of SOx regulations, which will tighten in January 2020.
Business Strategies
(Crude oil tankers and methanol tankers) Maintain long-term contracts with top-class customers and capture new demand
(Product tankers) Reduce market exposure by streamlining fleet and transition to a business model based on entrusted
vessel operation services through management of pools to maintain service networks
(LPG tankers) Continue to maintain market presence by managing LPG tanker pool jointly with a partner
(Chemical tankers) Become a comprehensive chemical logistics services provider through vertical expansion of business domains
Progress and Outlook of Business
Fiscal 2018 in Review
As a result of the steady strategies we have undertaken with
In terms of crude oil tankers, we steadily maintained medium- and
each type of vessel, the Tankers segment has recorded a profit
long-term contracts thanks largely to the trust-based relationships
for the fifth consecutive year.
we have cultivated with our Japanese and South Korean customers
over many years. In addition, we acquired new contracts with other
Direction in Fiscal 2019
overseas charterers, thereby accumulating stable profits. We also
For crude oil tankers, we will continue to deepen the trust-based
realized long-term contract renewals for methanol tankers, which
relationships we have accumulated with our Japanese and South
in turn helped us secure stable profits. For product tankers, we
Korean customers as we steadily address their renewal demand for
reduced the size of our fleet in fiscal 2018, from 36 vessels to 21
medium- and long-term contracts as well as their diverse transport
vessels, in response to stagnant market conditions. Meantime, we
established and commenced operations of a pool company, Asahi
demand. At the same time, in light of the decline in domestic
demand going forward, we will work to capture transport demand
MOL Tankers Ltd., together with Asahi Tanker Co., Ltd., with the
from overseas customers such as those in India, and also seek
aim of maintaining our service network and knowledge, and
opportunities for new businesses, including offshore crude oil
transitioning to a business model based on entrusted vessel
handling. For methanol tankers, we will not only work on
operation services. In chemical tankers, one of our strategic business
maintaining and expanding long-term contracts with existing
fields, our wholly owned subsidiary MOL Chemical Tankers Pte. Ltd.
customers but also leverage our solid track record to capture new
established a joint venture with SEA-Tank Terminal Antwerp NV,
transport demand in North America and other regions. In regard
with a view toward constructing and operating chemical tank
to product tankers, while maintaining our current fleet size for
storage terminals in the Port of Antwerp. In addition, MOL Chemical
the time being, we will strive to sustain our presence in the market
Tankers acquired the Denmark-based chemical company, Nordic
and enhance our fleet operational efficiency through the new pool
Tankers A/S, which has an operational foundation in the Atlantic
that commenced operations at the start of 2019. Turning to
Ocean region. The company also established a strategic alliance
chemical tankers, we will maintain the progress we have been
with the Dutch tank container company, Den Hartogh Logistics. As
making in the tank terminal and tank container businesses to act
such, MOL Chemical Tankers has been taking steps toward
upon the investment decisions made during fiscal 2018.
transitioning to a comprehensive chemical logistics company.
60
61
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of Operations by Segment
LNG Carriers / Offshore Businesses
Photo courtesy of MODEC,Inc.
Opportunities
Segment Strengths
• Growing marine transport volume of LNG
• World’s largest scale LNG fleet and a solid track record of
• Rising need for FSRUs and LNG-powerships due to the
increase in LNG importing countries centered on emerging
countries
• Steady demand for the development of deep-sea oil fields,
primarily in Brazil
safe operation
• Highly sophisticated marine technical skills that enable the
development of new business domains, such as the operation
of ice-breaking LNG carriers
• Collaborative relationships with prominent overseas partners
• Increasing demand for offshore wind power
• High levels of creditability that allow for the stable fulfillment
of super long-term contracts (15–25 years)
Risks
• Trend of shorter charter period for LNG carriers
Market Environment and Growth Opportunities
Vertical Expansion in the LNG Value Chain
there will still be needs for developing new oil fields to com-
LNG marine transport volume exceeded 300 million tons in 2018,
pensate for existing oil fields that are becoming depleted. We
driven by demand in China and India. By 2025, this amount is
therefore anticipate that demand for offshore oil field production
expected to increase to roughly 430 million tons. To respond to this
will continue for a while. Accordingly, we expect to see sustained
increase in demand, new gas field projects are being promoted in
demand for oil-producing infrastructure such as FPSOs and
countries such as Mozambique and Russia and a large-scale
subsea support vessels, particularly in Brazil.
expansion of existing projects in Qatar is underway. Meanwhile,
more and more emerging countries are commencing LNG import,
Offshore Wind Power
which has led to new business opportunities that go beyond the
Demand for wind power is increasing, centered on Europe, as
frameworks of conventional LNG transport, such as utilizing FSRUs
a form of energy with low environmental burden. Recently, wind
and LNG-powerships as a powerful solution that can establish
power has started to be introduced in East Asia as well. In light
a base to receive LNG at low costs and in short time periods.
of this, we expect to see business opportunities in fields such
as the installation of wind power peripheral equipment as well
Crude Oil-Related Offshore Businesses
as wind power operation and maintenance.
Even after demand for crude oil reaches its peak, it is likely that
Business Strategies
Leverage our industry-leading track record and expertise in
the field of LNG carriers and pursue business expansion in
high-value-added fields
Vertically expand our scope of services to include not only
FSRUs but also LNG-powerships and LNG terminals in order
to offer “stress-free services”
Secure stable profits through long-term contracts
Capture business opportunities through collaboration with local
partners who have significant influence in their respective regions
Progress and Outlook of Business
Fiscal 2018 in Review
LNG Carriers
We operate a fleet of approximately 90 LNG carriers, which is
completed LNG transport to East Asia from the Arctic Ocean
region going eastbound, which was a world-first achievement.
In addition, we concluded a new charter contract for an LNG
In fiscal 2018, a new FPSO commenced the charter, which con-
record in LNG transport projects with high levels of difficulty,
tributed to accumulating stable profits. Additionally, we entered
including voyages on the Northern Sea Route, we will strive to take
into a long-term contract for an FPSO off the coast of Brazil. We
part in new projects as a high-value-added service provider.
also agreed to participate in the construction, ownership, and
operation of an FSRU in Indonesia. Capitalizing on opportunities
in these ways, we have expanded our business.
Direction in Fiscal 2019
Offshore Businesses
Although no new units are scheduled to commence operations
in fiscal 2019, we still expect to record stable profits from existing
projects that started in and before fiscal 2018. Offshore businesses
LNG Carriers
In fiscal 2019, we expect stable business performance as more new
represent an area of strength in which we can leverage the exper-
tise and technical skills that we have long cultivated through the
LNG carriers will be delivered to be dedicated to long-term contracts
transport of LNG and other forms of energy. Accordingly, we are
and begin to contribute to profits. In a period of transition toward a
prioritizing the investment of management resources in this area.
carbon-free society, we believe that LNG transport is a promising
Going forward, we aim to lead the way for offshore businesses in the
growth field that stands out within the energy domain. Amid rising
context of the commercial distribution of resources and energy, by
demand, the needs within the LNG value chain are diversifying.
collaborating with business partners from the development stage of
To address this, we are working to expand the scope of our services
each project, differentiating ourselves in terms of quality of opera-
vertically to include not only LNG transport but also FSRU and
tion and maintenance services, and expanding our business
LNG-to-Powership business. Furthermore, by accumulating a track
domains to include power generation.
Time Charter Contracts That Commence between 2019–2021
Tokyo Gas
JERA
Yamal (ice-breaking LNG carriers)
Yamal (conventional-type LNG carriers)
Mitsui
Osaka Gas / Kyushu Gas
Uniper
LNG Carriers
ex. USA
To Japan
ex. USA
ex. Russia
ex. Russia
ex. USA
ex. Australia
ex. USA
To Japan
To China
To China
To Japan
To Japan
To Europe
Vessels
2
1
1
4
2
1
1
Petrobras
ENI Mexico
Hong Kong LNG Terminal
PT Jawa Satu Power
Swan Energy
Swan Energy
Offshore Businesses
Brazil
Mexico
Hong Kong
Indonesia
India
India
FPSO
FPSO
FSRU
FSRU
FSRU
FSU
Vessels / Units
2
1
1
1
1
1
Steaming Coal Carriers
Business Strategies
Construct and introduce next-generation steaming coal
carriers that suit customer interests (in terms of safety,
efficiency, eco-friendliness, etc.)
Accelerate promotion of LNG-fueled steaming
coal carriers
Progress and Outlook of Business
The majority of our steaming coal carriers are operating under
strategy, including promoting the introduction of next-generation
medium- and long-term contracts with our Japanese customers,
steaming coal carriers that offer enhanced safety through double-
and this allowed us to realize stable profits in fiscal 2018. Against
hull cargo holds as well as LNG-fueled vessels. For overseas, we
the backdrop of a heightened environmental awareness, some old
anticipate a continuous increase in demand for steaming coal in
power stations have suspended operations or been abolished.
India and Southeast Asia, where energy demand has been rising
There also have been changes and suspension of plans for new
following economic development. We aim to enhance our presence
power stations. Due in part to such movements, domestic demand
in these regions by leveraging our proposal capabilities, marine
for coal used for power generation has been on a gradual down-
technical skills, and the brand power that we have cultivated through
the largest in the world. Essentially all of these carriers are
carrier with Uniper SE, the largest gas and electricity company
ward trend. Nevertheless, with delays to the restart of operations of
coal transport for domestic use, in addition to the comprehensive
under long-term charter contracts, which helped us record
in Europe, which is slated to begin in 2020.
profits steadily in fiscal 2018. During the year, two ice-breaking
LNG carriers for the Yamal LNG project (see “Special Feature”
on page 20) were delivered and the first vessel successfully
Offshore Businesses
Our offshore businesses also operate under long-term contracts.
nuclear power plants, we believe there continues to be demand for
strengths of the entire MOL Group. In addition, not constraining
coal-fired power generation as a base-load energy source that is
ourselves to coal transport, we will seek opportunities in the transport of
both stable and cost effective. We will work to expand our market
share in coal transport for domestic use through our differentiation
alternative fuel that meets the needs of customers and in the commer-
cialization of technologies that promote the reduction of CO2 emissions.
62
63
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Overview of Operations by Segment
(From left)
(Responsible business area)
Hirotoshi
Ushioku
Executive Officer
Akihiko Ono
Senior Managing
Executive Officer
Deputy Director General
(Car Carriers)
Deputy Director General
(Containerships)
Yutaka Hinooka
Managing Executive
Officer
Director General
(Terminals & Logistics)
Atsushi Igaki
Executive Officer
Deputy Director General
(Ferries & Coastal RoRo
Ships)
Michael P.Y. Goh
Executive Officer
Deputy Director General
(NVOCC)
Market Environment and Growth Opportunities
In the automotive industry, there have been strong social demands
such factors as economic slowdowns and the rise of protective
for reduction of environmental impact and the evolution of mobil-
trade, which can change the trade dynamics. With that said, we
ity. In conjunction with this, technological innovation in automobile
expect that both the number of car sales worldwide and cargo
manufacturing and information transmission has been progress-
movements via marine transport are still gradually going to
ing simultaneously at an accelerating rate, and it is anticipated
increase. While transport ton-miles are on a downward trend
that the needs related to the marine transport of automobiles will
due to the progressing shift toward local production, we believe
become more and more complex. In addition, there are potential
we will see new business opportunities, such as an increase in
risks regarding fluctuations in the demand for automobiles due to
exports from China following the widespread use of EVs.
Product Transport Business Unit
Business Strategies
Portfolio
Highly specialized
Ferries & Coastal RoRo Ships
Terminals
Logistics
NVOCC
Fleet Table (Number of vessels)
At the end
of Mar.
2019
At the end
of Mar.
2018
Car carriers
Containerships*
Ferries & coastal RoRo ships
Total
113
65
16
194
119
91
14
224
* Operated by Ocean Network Express (ONE) since April 2018
Variable profits
Containerships
Car
Carriers
Stable profits
Less specialized
Car Carriers
Opportunities
• Changes to the production and export structure of car manufac-
turers following the widespread use of electric vehicles (EVs)
• Improvement in vessel supply and demand balance following
slowdown in new vessel orders
Risks
• Decline in marine transport demand stemming from the rise
of trade protectionism
• Increase in vessel operation costs following the tightening
SOx regulations
Segment Strengths
• High-quality, highly cost-effective fleet
• Extensive global trade routes and sales networks
• Diverse customer base that enables optimal cargo combina-
tion for each shipment
Optimize fleet scale to match our cargo portfolio
Reorganize services including withdrawal from unprofit-
able routes
Strengthen solution-proposing sales activities to custom-
ers by making use of our cost effectiveness and ICT
Reinforce environmental and emission-free businesses in
such ways as an intensive study of LNG-fueled car carriers
Progress and Outlook of Business
Fiscal 2018 in Review
Direction in Fiscal 2019
On certain trade routes, there have been quarantine issues and
Viewing the next several years as a period of dramatic change
impacts from natural disasters such as the earthquake in Hokkaido
in the overall car transport industry, we will strive to update our
and the heavy rains in western Japan. In addition, there have been
services (trade routes) and fleet by enhancing the quality of our
changes in the business environment, including the trade conflict
profitability analysis and improving freight rate levels. Also, with
between the United States and China and the new regulations for
the aim of providing long-term, stable transport services to our
exhaust emissions and fuel economy standards in Europe. These
customers, we will promote the aforementioned efforts while
factors led to overall stagnation in the transportation needs of
leveraging ICT technologies based on the new operational support
automobiles. Although we made efforts to enhance vessel opera-
system PCC.NET. In doing so, we will reinforce our solution-based
tion efficiency by reorganizing trade routes and streamlined our
sales capabilities to customers. For example, we will undertake
fleet scale, profit declined year on year. As achievements during
initiatives to boost operational efficiency and enhance customer
fiscal 2018, all four FLEXIE series next-generation car carriers,
satisfaction by developing cargo tracking websites and reorganizing
which won the Good Design Award 2018, were delivered, thereby
reinforcing the quality of our core fleet. Furthermore, we took
vehicle loading systems. As a preparation for future investments
in a new fleet, we will examine LNG-fueled vessels, which is in
steps to strengthen our IT infrastructure by introducing a new
line with efforts to strengthen our environmental and emission-
operational support system called PCC.NET worldwide and
free businesses. Through these efforts, we will transition to a
reformed our operational process and data foundation.
robust organization capable of realizing significant profit.
Main Routes
64
65
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 Overview of Operations by Segment
Containerships
Ocean Network Express Pte. Ltd. (ONE)
Opportunities
Segment Strengths
• Increasing volume of worldwide cargo movement
• Solid customer base rooted in the big three Japanese ship-
• Diversifying cargo sources
• Advancement of IT technologies that can be used to improve
customer services
Risks
• Downturn in the global economy and declining cargo volume
due to the further progression of trade protectionism
• Increase in vessel operation costs following the tightening of
SOx regulations
ping companies and THE Alliance*
• Dense service network on Transpacific and Asia–Europe trade
routes leveraging the presence in the market as well as extensive
services that cover the Asian region and North / South trade routes
• High level of competitiveness reinforced through the synergies
from the integration of three companies (reduction of variable
costs and overhead costs, etc.), which have steadily been
realized since ONE’s initial fiscal year
• High-quality customer service
* Containership service alliance among ONE, Hapag-Lloyd AG, and Yang Ming Marine
Transport Corporation. Hyundai Merchant Marine is scheduled to join in April 2020.
Direction in Fiscal 2019
earnings, ONE intends to move into the black in fiscal 2019. In
The operational difficulties ONE experienced in its initial fiscal year
January 2020, SOx regulations that limit the percentage of sulfur
of operation have already been overcome, and liftings are expected
content in vessel fuel oil will tighten, and this is expected to cause a
to recover to a level that is on a par with that of the three companies
hike in fuel oil prices. ONE will strive to conserve fuel oil consump-
before the integration was implemented. Furthermore, ONE has
tion as an important mission to not only cut costs but also reduce
been working on cargo portfolio optimization, which aims to com-
environmental impact. Meanwhile, ONE is working to gain cus-
bine inbound and outbound cargo collection in a way they can
tomer understanding to implement a fuel surcharge in order to
achieve higher profitability, as well as on upsizing vessels and trade
compensate for the rise in fuel oil prices.
route reorganization. By promoting these measures to improve
Transpacific Trade
(‘000 TEU)
300
Liftings at ONE (Fiscal 2018 / 2019 Results)
Asia–Europe Trade
(‘000 TEU)
200
240
180
120
60
0
4
5
6
7
8
9
10
11
12
1
2
3
(Month)
160
120
80
40
0
4
5
6
7
8
9
10
11
12
1
2
3
(Month)
Eastbound voyage (Fiscal 2018)
Eastbound voyage (Fiscal 2019)
Westbound voyage (Fiscal 2018)
Westbound voyage (Fiscal 2019)
Westbound voyage (Fiscal 2018)
Westbound voyage (Fiscal 2019)
Eastbound voyage (Fiscal 2018)
Eastbound voyage (Fiscal 2019)
Market Environment and Growth Opportunities
Terminals & Logistics
After the financial crisis in 2008, the growth rate of transport
containership companies. Today, that number has been reduced
demand slowed while the vessel supply increased due to the
to just nine. In the midst of this trend, MOL, Nippon Yusen
deliveries of new vessels that were ordered before the crisis.
Kaisha, and Kawasaki Kisen Kaisha decided to spin out and
This worsened the supply and demand balance for container-
merge their containership businesses, thereby establishing the
ships, causing long-term market stagnation. In an attempt to
integrated company ONE in 2017. ONE commenced its service in
enhance competitiveness in such harsh market conditions, many
April 2018, operating a combined fleet of approximately 1.55
players in the industry pursued scale expansion through means
million TEUs including on order, which is equivalent to a 6%
such as M&As, resulting in significant reorganization of the
global share.
industry. At the beginning of the 2000s, there were 19 major
Business Strategies
Improve profit by optimizing cargo portfolio and flexibly
reorganizing trade routes
Provide highly competitive services enhanced by the gen-
eration of synergies (scale merit)
Progress and Outlook of Business
Fiscal 2018 in Review
insufficiencies in terms of the number of staff after the integration,
Freight rates in Transpacific trade, which is ONE’s major route, were
ONE experienced tough operational conditions at the start, which
steady overall as cargo movements remained lively against the
not only inconvenienced customers but also led to a considerably
backdrop of rather robust personal consumption in the United
lower number of liftings than initial expectations. Although capacity
States and a rush-in demand related to the trade conflict between
utilization rate improved in the second half as a result of extensive
the United States and China. For Asia–Europe trade, which is the
efforts to normalize the service, ONE recorded a significant loss in
next major route for ONE following Transpacific, while the supply
fiscal 2018. On the other hand, the synergistic effects that were
and demand situation worsened due to the oversupply of vessels,
envisioned at the time of integration have steadily emerged since
cargo movements themselves were still relatively solid. However,
ONE’s initial fiscal year through such achievements as the reduction
due to staff members’ unfamiliarity with the IT systems and
of variable costs and overhead costs.
Business Strategies
(Terminals) Further strengthen the competitiveness of
container terminals in Japan
(Logistics) Bolster the NVOCC business and expand the
customer-oriented logistics business globally through
collaboration with overseas local partners
Progress and Outlook of Business
Among our container terminal businesses, overseas assets
through centralized marketing, network operations, and global
are scheduled to be transferred to ONE, and discussions are
customer support. Additionally, for our overseas operations, we
currently being held among related parties for executing this
are working toward the enhancement of logistics businesses
transfer. In the domestic container terminal business, we expect
deeply rooted in local economies. In line with this, we acquired
demand to be solid in locations such as Tokyo Bay.
additional shares in PKT Logistics Group Sdn. Bhd., a compre-
In the logistics business, we established MOL Worldwide
hensive logistics company in Malaysia, in August 2018. Going
Logistics Ltd. in July 2018, which is expected to lead the MOL
forward, we will further expand our overseas operations
Group’s NVOCC* business. MOL Worldwide Logistics will
through means such as collaboration with local partners.
aggregate resources related to the NVOCC businesses of the
two group companies, MOL Logistics (Japan) Co., Ltd. and MOL
Consolidation Service Ltd., and strengthen these businesses
* Non-Vessel Operating Common Carrier. Without having their own transport means
(vessels), NVOCCs transport cargoes by leasing space from other shipping companies
to transport cargoes between ports and to the final inland points of delivery.
66
67
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Overview of Operations by Segment
Ferries & Coastal RoRo Ships
Business Strategies
Improve the convenience of services for customers
through upsizing vessels and enhancing intermodal
transport services
Develop the “Casual Cruise” market by launching brand-
new, attractive vessels and by further promoting the
“Sunflower” brand
Progress and Outlook of Business
Fiscal 2018 in Review
two new RoRo ships in the Tokyo–Kanda (North Kyushu) route and
In fiscal 2018, cargo volumes were firm due to acceleration in the
commenced new services operating on an everyday basis (excluding
modal shift. This acceleration comes from aging and a shortage
Sundays). In addition, by utilizing the many trailers we possess,
of truck drivers and the promotion of workstyle reforms, to
we are able to provide highly convenient transportation methods
improve their labor conditions by reducing driving hours. The
to customers. These include not only port-to-port transport services
number of passengers was also steady for all Hokkaido, Setouchi,
using RoRo ships but also services that respond to diverse intermo-
South Kyushu routes, partly due to our efforts such as the deploy-
dal demand, such as inland transport from points of collection to
ment of two new ferries on the South Kyushu route and promotion of
points of delivery. For passenger transport, in addition to trains
the concept of “Casual Cruise.” While overall profit declined on a
and airplanes, ferries are now starting to be considered as a means
year-on-year basis due to the impact of ferry cancellations
of transportation. Moreover, the ways people enjoy travel are diversi-
caused by large-scale typhoons and prolonged mechanical troubles
fying, including cruises that make the experience of riding on a ship
with vessels, we were still able to secure a profit in a stable manner.
itself entertaining. Against the backdrop of these types of
In order to share the best practices between our consolidated
changes, we forecast an expansion in the markets where our concept
subsidiaries MOL Ferry Co., Ltd. and Ferry Sunflower Limited,
of “Casual Cruise” can appeal. Going forward, we will keep working to
we established the Ferry Virtual Company (FVC). As a result,
enhance the quality of the fleet by replacing vessels and increase the
mutual exchange of information on aspects of activities that the
value of the “Sunflower” brand through appropriate marketing
two companies have in common, including cargo and passenger
activities with the aim of leading the new market expansion.
sales activities, marketing know-how, vessel management, and
Additionally, we will improve our services by further promoting
administrative business procedures is promoted. This is leading
initiatives by FVC, which was established in the previous fiscal year.
to improvements in business activities in both companies.
We also intend to leverage the strengths of the Group to
Direction in Fiscal 2019
Although no major growth is anticipated in the overall market for
enhance safe vessel operation and address the issue of crew
member shortages.
domestic transport due to the declining population, there are regions,
Transport Results of Three MOL Group Companies*
such as Kyushu, where a modal shift is expected to accelerate. We
believe there will still be increasing demand for transport by ferries
and coastal RoRo ships in this area. To that end, we have introduced
(People)
900,000
860,000
820,000
(Units)
440,000
410,000
380,000
Adoption of luxurious interior design on new vessels to meet “Casual Cruise” needs
0
2014
Passengers (left)
2015
Cargo (right)
2016
2017
0
(fiscal)
2018
* MOL Ferry Co., Ltd., Ferry Sunflower Limited, and Meimon Taiyo Ferry Co., Ltd.
(converted as MOL’s share)
Associated Businesses
Environmental and
Emission-Free
Businesses
Variable profits
Highly specialized
Less specialized
Real Estate
Business
Stable profits
Maritime-Related
Businesses
Business Strategies
Shin-Daibiru Building (Osaka)
Receiving the Osaka Mayor Award at the 37th Osaka Machinami Awards
(Real estate) Target properties in major cities, etc., that
hardly decline in value regardless of market conditions
(Tugboat) Horizontally share the best practices of each
tugboat company within the Group and participate in overseas
projects using secondhand vessels
(Cruise ship) Thoroughly reinforce safe operation and
capture steady cruise demand
(Maritime-related, trading, and new businesses) Expand
the scale and the domains of the business
Progress and Outlook of Business
Fiscal 2018 in Review
Direction in Fiscal 2019
This segment comprises MOL’s real estate, cruise ship, tug-
In fiscal 2019, we will continue to operate each business in a
boat, trading, and other businesses. In the real estate business,
stable manner, and expect to achieve a result similar to that of
although the lease office market performed favorably centered
fiscal 2018. In the real estate business, although the favorable
on the metropolitan areas, profit edged down slightly year-on-
market conditions are expected to continue until around 2020,
year due to the impact of large-lot tenant replacement.
there is the possibility that rent levels will drop after that in some
Meanwhile, we acquired properties in both domestic and over-
areas and for certain properties. Therefore, we will continue our
seas markets that can be expected to contribute to stable profit
efforts to maintain and expand our portfolio of properties in
in the future.
major urban areas that will not be impacted by market condi-
In terms of the tugboat business, the first LNG-fueled
tions to keep accumulating stable profit. For tugboats, we will
tugboat ISHIN was delivered in Osaka Bay in February 2019.
examine ways to reinforce our overseas businesses, including in
Additionally, a new business in Viet Nam was launched.
Viet Nam. In the cruise ship business, we will thoroughly foster
Cruise ship, trading, and other businesses achieved rela-
and instill safety awareness while at the same time working to
tively solid results, and the overall performance of associated
capture steady cruise demand. In other business fields, we
businesses was on a par with that of the previous fiscal year.
will aim to enter into offshore peripheral businesses and new
business domains in which we can leverage our long-cultivated
expertise, including environmental and emission-free businesses
such as wind power businesses as well as transportation vessels
for offshore wind power sites and other associated businesses.
68
69
Business Strategy & ReviewMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Financial and Non-Financial Highlights
For the year
Shipping and other revenues
Shipping and other expenses
Selling, general and administrative expenses
Operating profit (loss)
Ordinary profit (loss)
Income (loss) before income taxes and
non-controlling interests
Profit (loss) attributable to owners of parent
Free cash flow [(a) + (b)]
Cash flows from operating activities (a)
104,104
197,211
204,510
197,732
126,987
(71,038)
118,984
98,546
20,939
24,234
27,776
12,722
(40,055)
93,428
Cash flows from investing activities (b)
(190,022)
(133,483)
Depreciation and amortization
78,155
88,366
MOL ADVANCE
GEAR UP! MOL
RISE 2013
STEER FOR 2020
ROLLING PLAN
2009/3
2010/3
2011/3
2012/3
2013/3
2014/3
2015/3
2016/3
2017/3
2018/3
2019/3
(Millions of yen)
¥1,865,802
¥1,347,964
¥1,543,660
¥1,435,220
¥1,509,194
¥1,729,452
¥1,817,069
¥1,712,222
¥1,504,373
¥1,652,393
¥1,234,077
1,564,485
1,228,478
1,328,959
1,368,794
1,432,014
1,587,902
1,683,795
1,594,568
1,388,264
1,513,736
1,094,915
91,300
123,400
121,621
90,885
(24,459)
(24,320)
92,946
(15,766)
(28,568)
100,458
41,092
54,985
116,024
17,249
51,330
115,330
2,323
36,267
113,551
2,558
25,426
115,972
22,684
31,473
95,366
(33,516)
(137,938)
71,710
58,332
(154,385)
23,303
(28,709)
58,277
46,970
181,755
(134,785)
77,445
(26,009)
(129,298)
5,014
(134,312)
85,624
(178,846)
(25,285)
78,955
57,393
(25,615)
94,255
42,356
(66,656)
92,494
(104,240)
(119,870)
(159,150)
94,685
83,983
87,803
(170,447)
182,508
209,189
(26,681)
92,771
5,257
(56,318)
17,623
(73,941)
87,190
(47,380)
(2,471)
98,380
(100,851)
(198,341)
86,629
90,138
101,442
37,718
38,574
46,778
26,875
(143,093)
55,248
At year-end
Total assets
Total tangible fixed assets
Interest-bearing debt
Net assets
Shareholders’ equity
Amounts per share of common stock*1
1,807,079
1,861,312
1,868,740
1,946,161
2,164,611
2,364,695
2,624,049
2,219,587
2,217,528
2,225,096
2,134,477
1,106,746
1,209,175
1,257,823
1,293,802
702,617
695,021
623,715
775,114
735,702
659,508
724,259
740,247
660,795
869,619
717,909
637,422
1,303,967
1,046,865
619,492
535,422
1,379,244
1,094,081
783,549
679,160
1,498,028
1,183,401
892,435
782,556
1,376,431
1,044,980
646,924
540,951
1,323,665
1,122,400
683,621
571,983
1,290,929
1,118,089
628,044
511,242
1,193,910
1,105,873
651,607
525,064
Profit (loss) attributable to owners of parent (Yen)
¥ 1,061.30
¥ 106.30
¥ 487.50
¥ (217.60)
¥ (1,495.70)
¥ 479.90
¥ 354.20
¥ (1,425.00)
¥ 43.95
¥ (396.16)
¥ 224.72
Net assets (Yen)
5,212.26
5,517.01
5,528.30
5,332.70
4,477.60
5,679.00
6,542.60
4,522.80
4,782.25
4,274.81
4,390.39
Cash dividends applicable to the year (Yen)
310
30
100
50
0
50
70
50
20
20
45
Management indicators
Gearing ratio (Times)
Net gearing ratio (Times)
Equity ratio (%)
ROA (%)
ROE (%)
Dividend payout ratio (%)
1.13
0.99
34.5
11.0
19.5
29.2
1.18
1.05
35.4
1.3
2.0
28.2
1.10
1.00
35.4
6.5
8.8
20.5
1.36
1.23
32.8
(1.3)
(4.0)
―
CO2 emissions of MOL Group*2 fleet (Thousand tons)
Number of MOL Group*3 employees
20,473
10,012
18,708
9,707
20,073
9,438
19,660
9,431
Note: Rounded down to the nearest ¥1 million
*1 The Company consolidated every 10 shares into 1 share effective October 1, 2017. Accordingly, figures have been calculated as if the consolidation of shares had been con-
ducted at the beginning of the fiscal year ended March 31, 2009.
*2 Mitsui O.S.K. Lines, Ltd. and its primary Group companies
*3 Mitsui O.S.K. Lines, Ltd. and its consolidated subsidiaries
1.96
1.58
24.7
(1.4)
(30.5)
―
1.61
1.35
28.7
2.4
9.5
10.4
1.51
1.35
29.8
2.1
5.8
19.8
1.93
1.64
24.4
1.5
(25.8)
―
1.96
1.64
25.8
1.1
0.9
45.5
2.19
1.82
23.0
1.4
(8.7)
―
2.11
1.88
24.6
1.8
5.2
20.0
18,876
9,465
17,810
10,289
18,803
10,508
18,676
10,500
18,204
10,794
17,774
10,828
16,369
8,941
70
71
Data SectionMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
Revenues (left)
Ordinary profit (right)
Revenues declined ¥418.3 billion from the previous
fiscal year due to a business spin-off. In terms of
ordinary profit, we recorded a significant loss at
ONE, causing us to incorporate equity in losses.
However, ordinary profit rose ¥7.1 billion due to
highly stable profits primarily from the Dry Bulk
and Energy Transport businesses as well as
relatively favorable market conditions.
Bulkships
Containerships
Other segments, etc.
Dry Bulk Business
Energy Transport Business
Product Transport Business
Associated Businesses /
Others / Adjustments
In the Dry Bulk Business, profit rose ¥6.5 billion
supported by favorable market conditions and medium-
and long-term contracts. For the Energy Transport
Business, profit increased ¥7.5 billion due to several
factors, including the accumulation of highly stable
profits from LNG tankers and offshore businesses,
robust conditions in the oil tanker market, and
successful efforts to decrease the number of unprofit-
able vessels. However, the Product Transport Business
recorded a loss stemming from the impact of the
confusion that occurred during the commencement of
operations at ONE and transitional costs.
Total assets (left)
Net assets (right)
In fiscal 2018, we sold off 17 vessels that were
either old or had a low level of profitability in an
effort to rejuvenate and enhance the competitive-
ness of our fleet. As a result, total assets as
of March 31, 2019, declined ¥90.6 billion.
Meanwhile, net assets increased ¥23.6 billion
due primarily to the rise in retained earnings.
Interest-bearing debt
Net interest-bearing debt
Shareholders’ equity
Gearing ratio (left)
Net gearing ratio (left)
Equity ratio (right)
Interest-bearing debt declined ¥12.2 billion, to
¥1,105.8 billion, due mainly to the decrease in
long-term debt. Shareholders’ equity was up ¥13.8
billion, to ¥525.0 billion, owing in part to the
increase in retained earnings.
The gearing ratio edged up 0.08 and the equity
ratio rose 1.6 points, reflecting the ¥12.2 billion
decline in interest-bearing debt, the ¥90.6 billion
decline in total assets, and the ¥13.8 billion
increase in shareholders’ equity.
*1 Interest-bearing debt – Cash and cash equivalents
*2 “Shareholders’ equity” in this section comprises the
total of owners’ equity and accumulated other
comprehensive income (loss).
Cash Flows
ROA (Based on Ordinary Profit) / ROE
Capital Expenditure
Fleet Size (All types of vessels)*
Key Indicators
Revenues / Ordinary Profit
Ordinary Profit (Loss) by Segment
Total Assets / Net Assets
Fiscal 2018
Revenues
Ordinary Profit
¥1,234.0 billion
¥38.5 billion
Fiscal 2018
Dry Bulk Business
¥21.9 billion
¥21.1 billion
Energy Transport Business
Product Transport Business ¥(12.2) billion
¥7.7 billion
Associated Businesses /
Others / Adjustments
Fiscal 2018
Total Assets
Net Assets
¥2,134,4 billion
¥651.6 billion
(¥ billion)
2,000
1,500
1,000
500
0
(¥ billion)
200
(¥ billion)
80
150
100
50
0
40
0
–40
(¥ billion)
3,000
2,400
1,800
1,200
600
0
(¥ billion)
1,000
800
600
400
200
0
Net Income (Loss)* per Share / Cash Dividends
Applicable to the Year / Dividend Payout Ratio
Fiscal 2018
Net Income (Loss) per Share
Cash Dividends
Applicable to the Year
Dividend Payout Ratio
¥224.72
¥45.00
20.0%
Fiscal 2018
Cash Flows from
Operating Activities
¥55.2 billion
Cash Flows from
Investing Activities
¥(198.3) billion
Fiscal 2018
ROA
ROE
(¥)
500
0
–500
–1,000
–1,500
(%)
50
(¥ billion)
300
0
150
0
–150
–300
(%)
20
10
0
–10
–20
–30
1.8%
5.2%
(%)
10
5
0
–5
–10
–15
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
Net income (loss) per share (left)
Cash dividends applicable to the year (left)
Dividend payout ratio (right)
Cash flows from operating activities
Cash flows from investing activities
Free cash flow
ROA (right)
ROE (left)
Profit attributable to owners of parent was ¥26.8
billion, turning around from the significant loss
recorded in the previous fiscal year due to the
provision related to charter rates of containerships
for ONE. Also, in accordance with our policy of
maintaining a consolidated payout ratio of 20%,
we issued an interim dividend of ¥20 per share and
a year-end divided of ¥25 per share, following
the increase in net profit.
* Profit (loss) attributable to owners of parent
Free cash flow was significantly negative as a result
of our investment associated with the spin-off of the
containership business as well as investments in
LNG carriers and offshore businesses, two areas the
Company concentrates management resources in.
To improve free cash flow going forward, we will
examine the liquefaction of assets while continuing
to carefully select investment projects.
While total assets decreased compared with the
previous fiscal year-end, return on assets (ROA)
improved due to the increase in ordinary profit.
Return on equity (ROE) also improved significantly,
exceeding 5%, as profit attributable to owners of
parent turned into the black.
Interest-Bearing Debt / Net Interest-
Bearing Debt / Shareholders’ Equity
Gearing Ratio / Net Gearing Ratio / Equity Ratio
Credit Ratings (As of June 2019)
Fiscal 2018
Interest-Bearing Debt ¥1,105.8 billion
Net Interest-Bearing Debt*1 ¥986.7 billion
¥525.0 billion
Shareholders’ Equity*2
Fiscal 2018
Gearing Ratio
Net Gearing Ratio
Equity Ratio
2.11
1.88
24.6%
JCR
R&I
Moody’s
A–
BBB
Ba2
(¥ billion)
1,500
1,200
900
600
300
0
2.50
2.00
1.50
1.00
0.50
0
(%)
50
40
30
20
10
0
Type of rating
Rating
Short-term debt rating (CP)
J–1
JCR
Long-term senior debt
(issuer) rating
A–
(Stable)
Long-term debt rating
A–
Issuer rating
BBB
(Stable)
R&I
Short-term debt rating (CP)
a–2
Long-term debt rating
BBB
Moody’s Corporate family rating
Ba2
(Stable)
Despite uncertainty in the business environment,
MOL has maintained its current ratings, reflecting
steady improvement in MOL’s business performance.
Going forward, MOL will continue working to bolster
its profitability and improve its financial standing,
in an effort to further enhance its ratings.
Fiscal 2018
Capital Expenditure
¥113.0 billion
Fiscal 2018
Number of Vessels
839 vessels
63,129 thousand tons
Deadweight
(¥ billion)
200
160
120
80
40
0
(Number of Vessels)
1,000
(Thousand tons)
100,000
800
600
400
200
0
80,000
60,000
40,000
20,000
0
14/3 15/3 16/3 17/3 18/3 19/3
14/3 15/3 16/3 17/3 18/3 19/3
Number of vessels (left)
Deadweight (right)
Capital expenditure represented here is the net
amount calculated by deducting proceeds from
the sale of vessels from the amount of “Tangible /
intangible fixed assets increases” contained in the
annual securities report.
Following the integration of the containership
business, we gradually redelivered containerships
for which chartering contracts had completed with
ship owners. As a result, the number of container-
ships we possess or charter declined by 26
compared with the previous fiscal year-end, to
65 vessels. Going forward, ONE will purchase or
charter vessels on its own.
* Including spot-chartered ships and those owned by
joint ventures
Note: The Company consolidated its common shares
on the basis of one (1) unit for every ten (10)
shares effective October 1, 2017. Accordingly,
each figure was calculated as if the consolidation
of shares had been conducted at the beginning of
the fiscal year ended March 31, 2014.
72
73
Data SectionMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
The MOL Group
Mitsui O.S.K. Lines, Ltd. March 31, 2019
Consolidated Subsidiaries
Affiliated Companies Accounted for by the Equity Method
Product Transport
Business
Registered Office
Voting Rights (%)*
Dry Bulk Business
Energy Transport
Business
Product Transport
Business
Mitsui O.S.K. Kinkai, Ltd.
MOL Bridge Finance S.A.
MOL Cape (Singapore) Pte. Ltd.
Shipowner / Chartering companies (74 companies) in Panama,
Marshall Islands, Liberia, Hong Kong, Cayman Islands and Singapore
Other (1 company)
Gearbulk Holding AG
Shipowner company (1 company) in Panama
Bamboo Mountain Power B.V.
Coconutland Maritime INC.
El Sol Shipping Ltd. S.A.
Lakler S.A.
MCGC International Ltd.
MNN Holdings Inc.
MOG LNG Transport S.A.
MOL Chemical Tankers Japan Co., Ltd.
MOL Chemical Tankers Pte. Ltd.
MOL Coastal Shipping, Ltd.
MOL LNG Transport Co., Ltd.
MOL Netherlands Bulkship B.V.
MOL Nordic Tankers A/S
Pacific LNG Transport Ltd.
Phoenix Tankers Pte. Ltd.
Pine Mountain Power B.V.
Samba Offshore S.A.
Shining Shipping S.A.
Unix Line Pte. Ltd.
Shipowner / Chartering companies (112 companies) in Panama,
Marshall Islands, Liberia, Hong Kong, Singapore, Indonesia and Malta
Akofs Offsore As
Aramo Shipping (Singapore) Pte. Ltd.
Asahi Tanker Co., Ltd.
Carioca MV27 B.V.
Cernambi Norte MV26 B.V.
Cernambi Sul MV24 B.V.
Den Hartogh Holdings B.V.
LNG Fukurokuju Shipping Corp.
LNG Jurojin Shipping Corp.
Karmol Lng Company LTD.
Libra MV31 B.V.
Mozanbique Fsru Company LTD.
PT Jawa Satu Regas
Sepia MV30 B.V.
T.E.N. Ghana MV25 B.V.
Tartaruga MV29 B.V.
Trans Pacific Shipping 2 Ltd.
Trans Pacific Shipping 5 Ltd.
Trans Pacific Shipping 8 Ltd.
Viken MOL AS
Viken Shuttle AS
Shipowner / Chartering companies (53 companies) in Panama,
Marshall Islands, Liberia, Hong Kong, Cayman Islands, Singapore,
Indonesia, Cyprus, Bahamas and Malta
Asia Utoc Pte. Ltd.
Bangkok Container Service Co., Ltd.
Bangpoo Intermodal Systems Co., Ltd.
Blue Highway Express Kyushu Co., Ltd
Blue Highway Service K.K.
Blue Sea Network Co., Ltd.
Chugoku Shipping Agencies Ltd.
Euro Marine Carrier B.V.
Euro Marine Logistics N.V.
Ferry Sunflower Limited
International Container Transport Co., Ltd.
International Transportation Inc.
Mitsui O.S.K. Lines (Thailand) Co., Ltd.
MOL Consolidation Service Ltd.
MOL Consolidation Service Ltd. (China)
MOL Container Center (Thailand) Co., Ltd.
MOL Ferry Co., Ltd.
MOL Hong Kong Ltd.
MOL Logistics (Deutschland) GMBH
MOL Logistics (Europe) B.V.
MOL Logistics (H.K.) Ltd.
MOL Logistics (Japan) Co., Ltd.
MOL Logistics (Netherlands) B.V.
MOL Logistics (Singapore) Pte. Ltd.
MOL Logistics (Taiwan) Co., Ltd.
MOL Logistics (Thailand) Co., Ltd.
Japan
Panama
Singapore
Switzerland
Netherlands
Panama
Panama
Uruguay
Bahamas
Liberia
Panama
Japan
Singapore
Japan
Japan
Netherlands
Denmark
Bahamas
Singapore
Netherlands
Panama
Panama
Singapore
Norway
Singapore
Japan
Netherlands
Netherlands
Netherlands
Netherlands
Bahamas
Bahamas
Marta
Netherlands
Marshall Islands
Indonesia
Netherlands
Netherlands
Netherlands
Bahamas
Bahamas
Bahamas
Norway
Norway
Singapore
Thailand
Thailand
Japan
Japan
Japan
Japan
Netherlands
Belgium
Japan
Japan
USA
Thailand
Hong Kong
China
Thailand
Japan
Hong Kong
Germany
Netherlands
Hong Kong
Japan
Netherlands
Singapore
Taiwan
Thailand
100.00
100.00
100.00
49.00
100.00
100.00
100.00
100.00
80.10
75.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
25.00
50.00
27.83
20.60
20.60
20.60
20.00
30.00
30.00
50.00
20.60
—
19.00
20.60
20.00
20.60
20.00
50.00
50.00
50.00
—
100.00
100.00
74.62
100.00
100.00
100.00
100.00
75.50
50.00
99.00
51.00
51.00
47.00
100.00
100.00
99.60
100.00
100.00
100.00
100.00
100.00
75.06
100.00
100.00
100.00
99.00
MOL’s Paid-in
Capital (Thousands)
¥660,000
US$8
US$62,752
US$228,100
US$0
US$14,408
US$10
US$101,401
US$1
US$22,100
¥0
¥100,000
S$262,370
¥650,000
¥40,000
€ 18
DKK 8,000
US$1
US$379,311
US$0
US$10
US$10
US$344
NKR 60,000
US$20,743
¥600,045
€ 169,419
€ 175,026
€ 162,160
€ 60
¥1,000
¥1,000
US$9,781
US$100
US$9,781
IDR 11,272,000
US$100
€ 149,650
US$206,138
¥3,961,000
¥2,672,000
¥1,265,000
US$61,500
US$38,104
S$900
THB10,000
THB130,000
¥50,000
¥30,000
¥54,600
¥10,000
€ 91
€ 1,950
¥100,000
¥100,000
US$60,000
THB20,000
HK$1,000
RMB8,000
THB10,000
¥1,577,400
HK$40,000
€ 537
€ 414
HK$14,100
¥756,250
€ 3,049
S$700
NT$7,500
THB20,000
Associated
Businesses
Others
Registered Office
Voting Rights (%)*
MOL Logistics (UK) Ltd.
MOL Logistics (USA) Inc.
MOL Logistics Holding (Europe) B.V.
MOL Worldwide Logistics, Ltd.
Nissan Carrier Europe B.V.
Nissan Motor Car Carrier Co., Ltd.
Shanghai Huajia International Freight Forwarding Co., Ltd.
Shosen Koun Co., Ltd.
Thai Intermodal Systems Co., Ltd.
TraPac Jacksonville, LLC.
TraPac, LLC.
Utoc Corp.
Utoc Engineering Pte. Ltd.
Utoc Logistics Corp.
Utoc Ryutsu Service Corp.
Utoc Stevedoring Corp.
Utoc Transnet Corp.
World Logistics Service (U.S.A.), Inc.
Shipowner / Chartering companies (52 companies) in Panama, Marshall Islands,
Liberia, Hong Kong, Cayman Islands, Singapore and Isle of Man
Others (18 companies)
Meimon Taiyo Ferry Co., Ltd.
Nippon Concept Corp.
Ocean Network Express Holdings, Ltd.
Ocean Network Express Pte. Ltd.
PKT Logistics Group Sdn. Bhd.
Rotterdam World Gateway B.V.
Shanghai Kakyakusen Kaisha, Ltd.
Tan Cang-Cai Mep International Terminal Co. Ltd.
TIPS Co., Ltd.
Other (1 company)
Daibiru Corporation
Daibiru CSB Co., Ltd.
Daibiru Holdings Australia Pty Ltd.
Daibiru Facility Management Ltd.
Daibiru Saigon Tower Co., Ltd.
Green Kaiji Kaisha, Ltd.
Green Shipping, Ltd.
Hokuso Kohatsu K.K.
Ikuta & Marine Co., Ltd.
Japan Express Co., Ltd.
Japan Hydrographic Charts & Publications Co., Ltd.
Jentower Limited
Kitanihon Tug-boat Co., Ltd.
Kobe Towing Co., Ltd.
Kosan Kanri Service Co., Ltd.
Kosan Kanri Service-West Co., Ltd.
M.O. Tourist Co., Ltd.
MOL Kosan Co., Ltd.
Mitsui O.S.K. Passenger Line, Ltd.
MOL Career Support, Ltd.
MOL Kaiji Co., Ltd.
MOL Techno-Trade, Ltd.
Nihon Tug-Boat Co., Ltd.
Nishinihon Sogo Setsubi Co., Ltd.
Tanshin Building Service Co., Ltd.
Tokai Tugboat K.K.
Ube Port Service Co., Ltd.
White Lotus Properties Ltd.
Chartering company (1 company) in Panama
Other (2 companies)
Shinyo Kaiun Corp.
South China Towing Co., Ltd.
Tan Cang-Cai Northern Maritime Joint Stock Company
Tan Cang-Cai Mep Towage Services Co., Ltd.
Euromol B.V.
Linkman Holdings Inc.
Mitsui O.S.K. Holdings (Benelux) B.V.
MOL (Americas) LLC.
MOL (Americas) Holdings, Inc.
MOL (Asia Oceania) Pte. Ltd.
MOL (Europe Africa) Ltd.
MOL Accounting Co., Ltd.
MOL Adjustment, Ltd.
MOL Engineering Co., Ltd.
MOL Information Systems, Ltd.
MOL Manning Service S.A.
MOL Marine Co., Ltd.
MOL Ocean Expert Co., Ltd.
MOL Ship Management Co., Ltd.
MOL Ship Tech Inc.
MOL Treasury Management Pte. Ltd.
Other (1 company)
UK
USA
Netherlands
Hong Kong
Netherlands
Japan
China
Japan
Thailand
USA
USA
Japan
Singapore
Japan
Japan
Japan
Japan
USA
Japan
Japan
Japan
Singapore
Malaysia
Netherlands
Japan
Viet Nam
Thailand
Japan
Viet Nam
Australia
Japan
Viet Nam
Japan
Japan
Japan
Japan
Japan
Japan
British Virgin Islands
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
British Virgin Islands
Japan
Hong Kong
Viet Nam
Viet Nam
Netherlands
Liberia
Netherlands
USA
USA
Singapore
UK
Japan
Japan
Japan
Japan
Panama
Japan
Japan
Japan
Japan
Singapore
100.00
100.00
100.00
100.00
100.00
90.00
76.00
79.98
100.00
100.00
100.00
67.55
100.00
100.00
100.00
100.00
100.00
100.00
41.13
15.00
31.00
—
35.13
20.00
31.98
21.33
24.44
51.07
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.25
100.00
62.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
87.26
100.00
100.00
70.00
99.39
100.00
36.00
25.00
36.00
40.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
MOL’s Paid-in
Capital (Thousands)
£400
US$9,814
€ 19
HK$58,600
€ 195
¥640,000
US$1,720
¥300,000
THB77,500
—
—
¥2,155,300
S$2,000
¥50,000
¥10,000
¥50,000
¥90,000
US$200
¥880,000
¥600,440
¥50,000
US$3,000,000
MYR276,354
€ 14,018
¥100,000
VND732,966,020
THB100,000
¥12,227,847
VND349,000,000
A$140,000
¥17,000
VND124,203,000
¥95,400
¥172,000
¥50,000
¥26,500
¥99,960
¥32,000
US$0
¥50,000
¥50,000
¥20,000
¥14,400
¥250,000
¥300,000
¥100,000
¥100,000
¥95,000
¥490,000
¥134,203
¥10,000
¥20,000
¥10,000
¥14,950
¥6,810,000
¥100,000
HK$12,400
VND 118,560,000
VND 112,717,115
€ 8,444
US$3
€ 17,245
—
US$200
S$2,350
US$8,402
¥30,000
¥10,000
¥20,000
¥100,000
US$3,889
¥100,000
¥100,000
¥50,000
¥50,000
US$2,000
* MOL’s voting rights include voting rights of MOL and its subsidiaries
74
75
Data SectionMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019 The MOL Group’s Global Network
Information Disclosure and External Recognition
Countries and Regions with Group Offices
Europe / Africa
Asia / Middle East / Oceania
UK
Netherlands
Belgium
France
Italy
Turkey
Russia
Poland
Germany
Austria
Czech Republic
Egypt
Algeria
Ghana
Kenya
Republic of
South Africa
Japan
China
Republic of
Korea
Taiwan
Hong Kong
Philippines
Myanmar
Malaysia
Singapore
Viet Nam
Thailand
Indonesia
India
Sri Lanka
Qatar
UAE
Oman
Australia
New Zealand
North America /
Central America /
The Caribbean
USA
Canada
Mexico
South America
Brazil
Chile
UK
USA
Japan
Singapore
Brazil
Headquarters & Chief Executive Representatives
Chief Country / Regional Representatives
Group company (50% stake or more) offices
ONE MOL Network for Global Information Strategy
—Utilizing Information across Divisions, Countries, and Regions—
Regional Representative, Europe,
Africa: UK
Chief Country Representative: Turkey
Regional Representative, Asia,
Middle East, Oceania: Singapore
Chief Country / Regional
Representatives: China, Taiwan,
India, Indonesia, Republic of
Korea, Malaysia, Myanmar,
Philippines, Thailand, Viet Nam,
UAE, Australia, Hong Kong,
Singapore
Headquarters: Japan
Dry Bulk Business Unit
Energy Transport Business Unit
Product Transport Business Unit
Corporate Marketing Division
Administrative Department
Regional Representative, North
America, Central America
& the Caribbean: USA
Chief Country Representative: Mexico
Regional Representative,
South America: Brazil
Chief Country Representative:
Brazil
Promoting Information Disclosure and Engagement
MOL considers timely and accurate disclosure of management
information about management strategy, investment plans, market
and financial information as a matter of great importance. In addition
conditions, and other information through its website.
to being accountable to shareholders and investors by providing
As expressed in the Corporate Governance Code, MOL
information, the Company communicates their opinions to its
proactively holds constructive dialogues with institutional investors
management. The distinguishing feature of our investor relations (IR)
and there will be no change to this policy. Feedback is regularly
activities is that the president takes the lead in their implementation.
provided to management with regard to the content of discus-
In fiscal 2018, based on the belief that the president himself
sions held with investors and analysts. MOL will continuously
should directly communicate the Company’s future strategies,
bolster the quality and quantity of communication while being
the president gave the Company’s presentations of interim and
mindfully aware of fair disclosure rules enacted in April 2018.
full-year results and attended meetings with domestic and foreign
The responsibility to provide information is not limited to
investors. The Company is also aware of the need for full and
management and financial issues. MOL’s basic stance is to
fair disclosure to all investors, whether in Japan or overseas.
quickly disclose information, including negative information on
In releasing its quarterly financial results, the Company discloses
such matters as accidents, to all stakeholders. Furthermore,
the financial highlights in Japanese and English on the Tokyo
Stock Exchange’s TDnet, while simultaneously posting
the Company holds regular drills for responding to the media in
emergencies and are working to strengthen its ability to quickly
the Japanese and English presentation materials on its website.
and properly disclose information. MOL will continue working to
Such information is emailed to domestic and foreign investors
raise reliability in its business policies and management through
who request notification. Additionally, MOL actively disseminates
close communication with various stakeholders.
IR Activities in Fiscal 2018 (April 2018–March 2019)
IR Materials (Available on MOL’s website)
Activity
Frequency
Details
Material
Japanese English
Business performance
presentations
4 times
Quarterly results/forecasts
President’s small meetings
4 times
Held for analysts in Japan
For securities
analysts and
institutional
investors
For overseas
institutional
investors
Overseas investor road shows
5 times
Conferences held by securities
companies
For individual
investors
Corporate presentations for
individual investors
4 times
2 times
Twice in Europe, twice in Asia, and once in
North America
Attended conferences in Japan and held
individual meetings
Attended seminars for individual investors
in Nagoya and Takamatsu, once in each city
External Recognition
Financial reports
Stock exchange filings
(financial highlights, etc.)
Business performance presentation
materials (including summaries of Q&A
sessions)
Integrated report
Securities reports
Quarterly reports
Business reports for shareholders
Investor guidebook
Market data
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No*
Yes
Yes
* Translation for reference and convenience purpose only
is available.
• SMBC Work Style Reform Finance
Based on MOL's initiatives adopted in the past (see page 40), Sumitomo Mitsui Banking
Corporation approved MOL for SMBC Work Style Reform Finance as a growth enterprise
that can be expected to encourage workstyle reform in the future (FY2017).
THE INCLUSION OF MITSUI O.S.K. LINES, LTD. IN ANY MSCI
INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE
MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A
SPONSORSHIP, ENDORSEMENT OR PROMOTION OF MITSUI
O.S.K. LINES, LTD. BY MSCI OR ANY OF ITS AFFILIATES. THE
MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI
AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS
OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
76
77
Data SectionMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019
Glossary (In alphabetical order)
Shareholder Information
Chemical Tankers
Market Exposure
Tankers fitted with multiple tanks to transport many different types
of liquid chemical cargo at the same time. These tankers have
complex design specifications, as they are equipped with indepen-
dent pipelines, cargo pumps, and temperature-regulating functions
for each tank, in addition to dedicated facilities for cleaning and
other features.
Ethane Carriers
Ethane carriers are specialized for transporting liquefied ethane,
which has been cooled to -92°C, and equipped with a reliquefaction
system. LNG carriers transport cargo at -162°C, and LPG tankers
transport cargo at -42°C, so ethane carriers fall somewhere between
the two.
FPSO (Floating Production, Storage and
Offloading System)
A floating facility for producing oil and gas offshore. The oil is stored
in tanks in the facility and directly offloaded to shuttle tankers for
transport to the shore facility.
FSRU (Floating Storage and Regasification Unit)
FSU (Floating Storage Unit)
An FSU is a floating facility for storing LNG offshore. An FSRU
has the same structure as an FSU with an additional function for
regasification of LNG onboard, with which it can send out vaporized
natural gas to land through a pipeline. FSRUs and FSUs are being
adopted for a growing number of projects to establish LNG receiving
terminals all over the world because of their advantages, including
a shorter lead time and lower costs compared to conventional
onshore receiving terminals.
Highly Stable Profits
Profits that are stably generated by contracts of two years or more,
and projected profits from highly stable businesses. Highly stable
profits are currently provided by the following segments: Dry bulkers,
Tankers, and LNG carriers / Offshore businesses under medium-
and long-term contracts (two years or more); Associated businesses;
and Others.
LNG Carriers
Tankers designed for the transportation of liquefied natural gas (LNG).
To transport LNG which has been cooled to -162 °C, LNG carriers
make use of a wide variety of technologies in various ship parts,
including specialized tanks that can withstand extremely cold
temperatures and emergency shut-off devices to prevent accidents
in cargo operation.
If vessels procured for the medium- and long-term (owned or
medium-and long-term chartered vessels) operate only under short-
term cargo transport contracts, these vessels are exposed to market
rate fluctuations as a result of the mismatch between the vessel
procurement and operating periods. MOL defines the number of
medium-and long-term procured vessels operating under cargo
contracts of less than two years as “market exposure,” and monitors
the ratio of its market exposure with the aim of controlling the risk of
market fluctuation.
Pool
Arrangements where ship operators and owners pool certain ships
together to conduct joint operations.
RoRo (Roll-on / Roll-off) Ships
Ships that are equipped with a ramp like ferries and have a vehicle
deck to hold trucks, trailers, and other vehicles. Cranes and other
loading equipment are not used in loading; instead, vehicles are
driven onto the ship. In general, while ferries transport passengers
and personal-use automobiles in addition to freight vehicles, RoRo
ships mainly transport freight vehicles.
Small- and Medium-sized Bulkers
Panamax, Handymax, and Small handy dry bulkers that mainly
transport general bulk cargo, such as coal, grain, salt, cement, and
steel products.
SOx
The term “SOx” collectively refers to sulfur oxide emissions,
including sulfur dioxide (SO2), which are air pollutants emitted during
the combustion of fossil fuels containing sulfur, such as oil and coal.
In the marine transport industry, regulations requiring a drastic
reduction in the sulfur content of fuel will come into effect in 2020,
in order to curtail the amount of SOx in vessel emissions.
Subsea Support Vessels
Vessels designed for installation and maintenance of subsea
facilities during exploitation of offshore oil and gas fields.
Visualization of Marine Operations
Measures to provide visualization of the conditions of vessels and
cargo at sea using ICT, thereby achieving optimal vessel operations,
in conjunction with providing value-added services to customers. For
example, big data on weather and sea conditions is analyzed and
effectively utilized to achieve safer vessel operations and optimal
routing. In addition, measures are taken to improve the safety of
vessel operations and ship management efficiency, including
remotely monitoring the operational status of engines and other
machinery and making maintenance arrangements in advance.
For further information, please contact:
Investor Relations Team
Corporate Communication Division
Mitsui O.S.K. Lines, Ltd.
1-1, Toranomon 2-chome, Minato-ku,
Tokyo 105-8688, Japan
E-mail iromo@molgroup.com
URL https://www.mol.co.jp/en/
Capital
Head office
¥65,400,351,028
1-1, Toranomon 2-chome, Minato-ku, Tokyo
105-8688, Japan
Number of MOL employees
1,026
Number of MOL Group
employees
(The parent company and
consolidated subsidiaries)
8,941
Total number of shares
authorized
315,400,000
Number of shares issued
120,628,611
Number of shareholders
85,217
Shares listed on
Tokyo Stock Exchange
Share transfer agent
(Contact information)
Communication materials
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Business Planning
Department
8-4, Izumi 2-chome, Suginami-ku, Tokyo
168-0063, Japan
MOL Report (English / Japanese)
Investor Guidebook (English / Japanese)
Market Data (English / Japanese)
News Releases (English / Japanese)
Website (English / Japanese)
(As of March 31, 2019)
Stock Price (Tokyo Stock Exchange) and Volume of Stock Trade*
Fiscal 2016
Fiscal 2017
Fiscal 2018
High
Low
¥3,890
¥1,990
High
Low
¥4,170
¥2,891
High
Low
¥3,490
¥2,163
Stock Price
(¥)
5,000
4,000
3,000
2,000
1,000
0
Volume of Stock Trade (Monthly)
(Million shares)
50
5
4
2016年
FY2016
6
7
8
9
10
11
12
2
1
2017年
FY2017
3
4
5
6
7
8
9
10
11
12
1
2
2018年
FY2018
3
4
5
6
7
8
9
10
11
12
2
1
2019年
FY2019
3
4
5
40
30
20
10
0
* The Company consolidated its common shares on the basis of one (1) unit for every ten (10) shares effective October 1, 2017. Figures for FY2016 are calculated on the assump-
tion that the consolidation of shares was conducted at the beginning of FY2016.
78
79
Data SectionMITSUI O.S.K. LINES MOL REPORT 2019MITSUI O.S.K. LINES MOL REPORT 2019