Realignment of Domestic Shipping and Logistics Unit
July 31, 2003
Nippon Yusen Kaisha (NYK) has decided to realign its group' domestic shipping and logistics units as described in the following.
On October 1, part of a domestic physical distribution service unit of the NYK group will be spun off to set up a new wholly-owned subsidiary, Kinkai Yusen Logistics (tentative name).
Hopefully by December, Kinkai Yusen Logistics will take over the roll-on/roll-off (ro/ro), through-transit and warehousing services of Kinkai Yusen Kaisha, while Kinkai Yusen' dry bulk services will be assumed by Pacific Maritime.
Kinkai Yusen will wind itself up voluntarily within the current fiscal year.
Business circumstances surrounding the domestic shipping service sector, which witness growing interest among customers in logistics services, focuses now on the promotion of modal shift, which has received attention because of concerns over environmental issues, and free competition resulting from deregulation.
In order to build a business structure to keep pace with such trends, NYK has decided to divide its Japan service units into (1) a domestic logistics service provider responsible for operating liner ro/ro and warehousing services and (2) a domestic dry bulk service specialist.
Both units will operate making the most of their respective strong points to fully satisfy a variety of customer needs.
They will endeavor to improve the efficiency of the NYK group's entire business activities and reinforce its competitiveness by undertaking rationalization initiatives.
As members of the NYK Logistics (Japan) consortium, the new companies will also make efforts to expand their business and increase sales and profits by making the full use of the synergetic effects they will enjoy as NYK group affiliates.
Kinkai Yusen Logistics, a domestic liner service operator/physical distribution service provider operating 10 ro/ro ships, warehousing facilities of approximately 81,000 square meters and some 1,300 trailers, is expected to have sales of Yen18.5 billion per annum, making it the largest domestic ro/ro service operator in Japan.
Meanwhile, the restructured Pacific Maritime will specialize in providing dry bulk services around Japan with a fleet of 10 ships including cement and coal/ash carriers, with its annual sales estimated at some Yen 4 billion.
In addition, Pacific Maritime will manage the NYK group's vessels deployed in domestic services, including ro/ro ships operated by Kinkai Yusen Logistics.
President Yasutaka Maeda of Kinkai Yusen will assume the presidency of both companies.
The NYK group hopes the realignments, which will include the rationalization of group management, the improvement of efficiencies and the reconsideration of unprofitable services, will generate a positive annual economic effect of Yen 400 million to Yen 500 million.
These business developments will be undertaken as part of the efforts the NYK group is currently making to reinforce its financial bases under its medium- and long-term management vision, known as Forward 120.