Message from the President

We are aiming to enhance corporate value and social value by contributing to solving social and environmental issues.

Taking on the challenge of creating new value and staying ahead of our competitors with a focus on digital technologies and environmental initiatives

New Medium-Term Management Plan Established in Response to the Operating Environment

We are determined to create new value and pursue innovative measures to stay ahead of our competitors amid a dramatically changing operating environment

We created our new five-year medium-term management plan, Staying Ahead 2022 with Digitalization and Green, which was announced in March 2018. The phrase "staying ahead" in the plan's name expresses our determination to take on future challenges and outperform our competitors through innovation with a ceaseless pioneering spirit.

Two external factors have a particularly large impact on the Group's operations. The first is the volatility of the maritime shipping market. The outlook for the maritime shipping market is very unclear. The second external factor is the political-economic environment, which has been changing in diverse ways. For example, trade protectionism is gaining ground, there is a movement toward local production for local consumption, and geopolitical risks are still causes of serious concern. Moreover, rapid advancements are being made with digital technologies, countries are shifting to low-carbon economies, and environmental regulations are becoming stricter. To respond to all of these trends, we explored innovative ways for differentiating the Group's businesses when formulating our new medium-term management plan.

We also redefined the NYK Group's mission statement when deciding on the plan. We re-examined the Group's core mission and fundamental goals, and created a new mission statement: "Bringing value to life". It expresses the path that all of the Group's businesses take, while also reflecting the original vision of the Company's founder and our unwavering dedication regardless of the changing times and social trends. In line with this mission statement, we envisioned how the Group should be in 10 years' time.

Implement Digitalization and Green Initiatives

Our strategy is to implement the Digitalization and Green initiatives of our new medium-term management plan. Through our Digitalization and Green initiatives, which are closely linked with the basic strategies, we intend to provide new services and added value.
From early on, the Group has promoted the shift to digitalization ahead of the maritime shipping industry. The Group has been collecting data from vessel transport and sharing that data across marine and land operations, and developing various technologies for increasing the efficiency of vessel assignments and operations, as well as for designing and modifying ships. The Group has already accumulated a substantial amount of data, and now that the predictive power of analysis technology has improved through deep learning, we have begun using the data to help prevent accidents and equipment troubles. Our Green initiatives are organized into three main categories: compliance with international environmental regulations, improving vessel efficiency and reducing their CO2 emissions, and new business development. Regarding the new business development category, we are looking to launch new green businesses. Demand will undoubtedly grow in the market for renewable energy, so I believe our green businesses must focus on renewable energy from hereon. Going beyond the boundaries of cargo shipping, we are determined to quickly exploit such business opportunities going forward.

Priority Tasks, safety, the environment and human resources for Increasing Corporate Value and Benefiting the Communities We Serve

The Group is aiming to maximize earnings through its new medium-term management plan. At the same time, while working to raise corporate value, we are striving to bring value to communities around the world by helping them solve the problems they face and deal with environmental issues. To facilitate this approach of bringing value to both our business and to society, we have designated safety, the environment, and human resources as key material issues for the Group. When discussing these material issues, I must mention an unforgettable oil spill that happened in Tokyo Bay in 1997. That accident made us strongly aware of how important ensuring safety, protecting the environment, and training human resources are for the Group to continue conducting business. Since then, we have carried out a wide range of related initiatives and activities. I believe that the Group's commitment to safety, the environment, and human resources over so many years has helped it build trust with stakeholders and be their partner of choice. We will continue focusing on these three key material issues with a view to build partnerships over the long term and stand out from our competitors.
While intent on achieving the goals of the medium-term management plan, we will also work to ensure that the Group's corporate governance is soundly implemented. Our governance systems are being enhanced in a variety of ways, but we are also improving the efficacy of the Board of Directors.

Finally, by implementing Staying Ahead 2022 with Digitalization and Green, and guided by our new mission statement of "Bringing value to life", I am confident that we can lay the foundations for the Group to create new value. Through our Digitalization and Green initiatives, I want to entrust that the Group remains indispensable for society and helps realize a brighter tomorrow. With that in mind, while following the course set under our new medium-term management plan, we will work to meet the expectations of the Group's many stakeholders around the world with a commitment to bringing value to their communities.

July 2018

Tadaaki Naito