Restructuring of TSK shareholdings and Consolidation of Intra-Asia Container Transportation Business
February 22, 2002
We are pleased to announce that NYK has decided at its Board Meeting today that Tokyo Senpaku Kaisha, Ltd. ("TSK") will become a 100% subsidiary of NYK and NYK will consolidate its Intra-Asia container transportation business and that of TSK.
These transactions will be made pursuant to the relevant provisions of Commercial Code in Japan. TSK will become a 100% subsidiary of NYK by the stock exchange method in August 2002, and TSK, as a 100% subsidiary of NYK, will take over NYK's Intra-Asia container transportation business by the corporate separation method, which is scheduled to be completed in October, 2002. After these transactions, TSK will be a sole and integrated provider of the Intra-Asia container transportation service in NYK Group.
Recognizing that the container transportation business has been enjoying substantial growth not only in Intra-Asia trade, but in global one, NYK considers that this integration will be the best way to improve customer service and competitive advantage of our container business both in Intra-Asia trade and in global one.
In line with this strategic initiative, NYK has agreed with TSK that TSK, who is now partly (39.23%) owned by NYK, will become a 100% subsidiary of NYK and its Intra-Asia container transportation business, including West Asia container transportation one, will be consolidated.
This integration will make TSK a sole and integrated firm for Intra-Asia container transportation business in NYK Group, and TSK will assume its responsibility in Asia for promoting the global container business strategy of NYK.
As a result of this integration, we will improve operating efficiency not only in Intra-Asia container transportation business, but in our global container transportation, and add corporate and shareholder values by achieving the following effects from this integration.
First, we will improve our customer service through the integrated service and competitive advantage both in Intra-Asia container transportation and in global container transportation. We further improve our customer service through the integrated information technology system and its management.
In addition, the consolidation of the Intra-Asia container transportation business of NYK and TSK will bring about the synergy effect, such as integrated measures for cost reduction, fleet management, information technology, and restructuring. This will enhance corporate and shareholder values for NYK.
Third, this integration will enable us to utilize and restructure organizations and networks of both NYK and TSK in Asia. This will make TSK a new and lean organization with competitive advantage in Intra-Asia container business.
The anticipated improvement of our profitability will be around 1.5 Billion-Yen (US$ 11 Million) per year, and we will further enhance competitive advantage of TSK. As a result, TSK, as our group company and integrated provider of Intra-Asia container service, will achieve constant and substantial profitability in competitive Intra-Asia market.
Since last year, we have accomplished several corporate restructuring of our business, including the spin-off of reefer trade business, the integration of conventional trade one and the establishment of a new shipmanagement company in Singapore. We have also announced that the integration of handy bulker business will be made in this October. The integration of Intra-Asia container transportation business is in line with these corporate restructuring, and we have confidence that the improvement of profitability will be more than 3 billion Yen (US$ 22 million) per year in total.
In order to enhance our competitive advantage and increase our corporate and shareholder values, we will continue to review our business and take necessary actions for further corporate restructuring.