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NYK Group sets New Midterm Management Plan "New Horizon 2007"

March 23, 2005

 NYK Group has established the new medium-term management plan "New Horizon 2007," for a period of three fiscal years from April 2005 - March 2008.

 By the end of the 2007 fiscal year NYK Group seeks to achieve consolidated revenues of 1.8 trillion yen (equivalent to US$18 billion ), operating income of 160 billion yen (equivalent to US$1.6 billion) and net income of 95 billion yen (equivalent to approximately US$0.95 billion). Taking a view toward fiscal year 2010 the Group has set a target for consolidated revenues to exceed 2 trillion yen (equivalent to US$20.0 billion).

 "New Horizon 2007" focuses on dynamic growth and the stabilization of corporate fundamentals. These three key strategies are explained fully overleaf but in summary are:

  1. Expansion of Maritime Business
    - Investing 1.38 trillion yen (equivalent to US$13.8 billion) from 2005 to 2010 on fleet expansion.
  2. Evolution Towards a Logistics Integrator
    - Incorporating the large scale fleet and international transport network covering sea,land and air.
  3. Enhancement of Corporate Fundamentals
    - To meet stakeholder expectations.

*exchange rate is based on US$=100yen which is applied in the new management plan.

Strategy 1: Expansion of Maritime Business

 To accommodate the expected continuous increase in the marine transport volume on a global scale, NYK Group will proactively expand the scale of its fleet, centring on the bulk / energy transport business. For six years from fiscal 2005 to 2010, the Group will invest 1.38 trillion yen (equivalent to US$13.8 billion) to conduct fleet expansion to 880 ships, from the current 660 ships. On another front, the Group will strive to secure long-term stable contracts and promote cost reduction efforts to correspond with a possible future declining trend of the market and also to stabilize the income level. Through this strategy, the NYK Group will continuously focus on the maritime transport business as its main line of business.

 "NYK Group will continuously strive to offer high quality service in all the sectors, in which it operates at a competitive value for our customers. We aim to ensure that our clients are able to enjoy the twin benefits of the economy of scale and quality of service that are the core of our business," said Koji Miyahara, president of NYK Group.

Strategy 2: Evolution Towards a Logistics Integrator

 Logistics systems have become increasingly complicated and diverse, particularly in the automotive, electronics and retail industries, which used to demand simple transport systems, i.e. from port to port, or door to door. The previous management plan of "Forward 120" also highlighted customer needs for sophisticated logistics, and now "New Horizon 2007" will further advance NYK Group's strategic vision to evolve towards a "Logistics Integrator". One that offers integrated logistics services through the use of the world's leading hardware - covering our ships at sea, trucks and rail on land and planes in the sky - and software - via our electronic international transport network.

 "Our integrated logistics services will use the hardware of a globally leading fleet and the software of an international transport network that spans the sea, land and air. We believe we have a unique supply management capability. We can manage integrated logistics to serve the interests of the manufacturer and the retailer," said Mr. Miyahara.

Strategy 3: Enhancement of Corporate Fundamentals

 To meet customers', shareholders' and other stakeholders' expectations, NYK Group aims to further enhance its corporate fundamentals to underpin the above-mentioned strategies. NYK Group will primarily focus on the safe operations of our ships, trucks and planes - the most significant and fundamental management issue - and on environmentally responsible business administration. Additionally, NYK will further strengthen its technology and improve training and education functions centring on our Monohakobi Technology Institute (MTI). Furthermore, NYK Group will proactively develop a management system based on information technology and provide personnel training for all Group companies around the world. In April 2005, NYK will establish the "Corporate Social Responsibility (CSR) Management Headquarters," headed by President, Koji Miyahara, with the aim of further strengthening and promoting CSR activities.

 "In 2005, NYK will celebrate the 120th anniversary of its founding. With an eye on the next 120 years, the NYK Group strives to develop strong partnerships with its customers based on trust and respond to their expectations through "Monohakobi" ("Monohakobi" is Japanese for the "transportation of goods"). Moreover NYK Group aspires to contribute to the achievement of a better global society as an exemplary corporate citizen," said Mr. Miyahara.

 Envisioning the ideal corporate image to be formed in 2010 on the foundation of the "New Horizon 2007," all NYK Group members are committed to fulfil the steady implementation of the new three-year management plan as a united team.

 NYK Group is a global maritime service provider with strong presence in the logistics sector. NYK Group currently employs 33,000 staff and operates 660 ships in the container, car transport, LNG, tanker, dry cargo, specialized cargo and cruise industry worldwide. As well as maritime shipment, the company is also engaged in sea, land and air transportation. NYK Group is both expanding its global bulk & energy service as well as strengthening its logistics businesses based on the container, logistics and car carrier divisions.