The NYK Group Works as One to Achieve Its Goal
NYK President Takaya Soga addressed the group’s employees on October 2 to mark the 138th anniversary of the company’s founding

The 138th anniversary of NYK’s founding, and it is a great pleasure for me to celebrate this day with you. I would like to thank all of you for your daily efforts and pay tribute to our predecessors who desperately overcame many difficulties throughout history.

Six months have now passed since I assumed the position of president. On this occasion, I would like to share with you a few words.

New medium-term management plan

First, let me talk about the medium-term management plan. We are developing our corporate activities under the plan announced in March. The plan’s main point is to deepen our core business based on ESG management and use the funds from these activities to develop new businesses, aiming to increase our corporate value. To support the strategy, we will create an environment where each staff member can demonstrate their individuality and capabilities. We will work to establish innovative thinking and digitalized business procedures. We will also make a solid contribution as a shipping and logistics company to the energy transition demanded by society. Although the plan has just started, various projects are now underway. Please always keep in mind the action guidelines set forth in the plan in your daily business activities.

ESG strategy

To advance ESG management to the implementation stage, we launched the ESG Strategy Headquarters in April. The headquarters is working to deepen our existing ESG initiatives, redefine our material issues (safety, environment, and human resources), clarify our human rights initiatives, and outline the details of our serious and urgent decarbonization strategy. I want the headquarters to continue its efforts toward the November release of “The NYK Group ESG Story 2023,” which incorporates these initiatives, and to work hard to organize our response to the EU Emissions Trading System, which will come into effect next year.

Technology

Next is the Technical Headquarters. Safety and technological capabilities, which have been the backbone of our management throughout the NYK Group’s long history, remain essential to our core competence. Safety is the foundation of our commitment to “keep the logistics lifeline open.” In addition to the safety of transportation, people involved, and society, the safety of the system environment is extremely important. Also, “technological capabilities” are increasingly crucial in our efforts toward energy transition and decarbonization. Our new medium-term management plan emphasizes “co-creation,” and with that in mind please actively promote initiatives, such as open innovation and deploying our technologies to other stakeholders.

Liner & logistics

Next, let me turn to the Liner & Logistics Headquarters. In the liner shipping sector, Ocean Network Express Pte. Ltd. (ONE) has performed far better than expected over the past two years and has steadily built a foundation as a specialized containership company. I would like to pay tribute to the tremendous efforts of everyone involved, including those seconded to ONE, in achieving this level in the company’s first five years, primarily under the unique circumstances of COVID-19. ONE has dramatically improved its financial position, and the containership business environment is changing. The management of ONE is now entering a new phase, so please work firmly to strengthen our organization and governance as a global company and to develop and implement specific management plans.

In the terminal business, including tugs, and the coastal transportation business, please take appropriate actions for Japan’s logistics, which could change due to the “2024 problem” in logistics.

Yusen Logistics Co. Ltd. has a vital position in the new medium-term management plan and is a core company within the NYK Group network. Please accelerate the development of the structure and reinforcement of the foundation that supports our sales and marketing capabilities for further growth.

In the air cargo transportation business, we have announced that NYK will transfer all Nippon Cargo Airlines Co. Ltd. (NCA) shares to ANA Holdings Inc. We are sorry to cause much concern among NCA employees. We will create a system to alleviate their anxiety and provide firm support, albeit indirectly, through the collection of air cargo at Yusen Logistics even after the transfer.

Automotive business

Next is the Automotive Business Headquarters. Problems with the supply of parts, including semiconductors, are subsiding, and the economy is booming, especially in North America. Demand for transportation is growing stronger than ever. Meanwhile, we still struggle to find shipping capacity due to congestion at several major ports. However, the NYK Group now has six LNG-fueled PCTCs in service, putting us ahead of other companies in the market, and we are gradually gaining our customers’ understanding of the costs of environmental initiatives. I appreciate the headquarters’ unflagging sales efforts. Please continue to promote environmental measures and lead the industry, including the automobile logistics business, while differentiating ourselves from our competitors.

Energy

For the Energy Division, our joint venture with a Russian shipping company was rife with challenges due to the Russian-Ukrainian conflict, and bringing the matter to a conclusion was tough work. We must continue to monitor the situation carefully and resolve it in compliance with laws and regulations. We must also tackle the issue of increasing demand for LNG carriers and LPG carriers over the long term by, for example, securing berths for these vessels by making the most of our experience and knowledge. Also, please continue to be active in the energy transition that society is demanding by standing at the forefront of the NYK Group. Our corporate value can be enhanced in fields such as offshore wind power, new energy sources, including ammonia and hydrogen, and CO2 transportation.

Dry bulk

The Dry Bulk Division has worked hard and successfully executed its four strategies, and the NYK Group has become significantly more resilient to market conditions. Meanwhile, the economic issues in China are of great concern as they affect the transportation of all kinds of materials. However, as in the past, please continue to implement thorough exposure management and work to stabilize our earnings.
Also, NYK Bulk & Projects Carriers Ltd. (NBP) has achieved remarkable results. From now on, please carefully watch the market to avoid delays in preparing small and medium-sized vessels by, for example, keeping an eye on vessel prices and the timing of shipbuilding orders.
As I said before, the transportation of existing materials is necessary to support the plans of our customers making their energy transition efforts and help society as a whole make the energy transition. Please carry it out with pride.

General affairs

The General Affairs Headquarters, mainly the Human Resources Group, is creating a system and environment where employees worldwide can maximize their individuality and work with vigor and enthusiasm.
The General Affairs Group is accelerating efforts to deepen D&I by reviewing the recruitment of new graduates, expanding career recruitment, increasing training opportunities for female managers, and providing awareness training. Various ways to create a comfortable workplace are under consideration in preparation for the temporary relocation of the head office functions to the new Yokohama Building in three years.
I agree that employee satisfaction raises the productivity of the entire company. However, since satisfaction includes emotional aspects, the Human Resources Group and the General Affairs Group may go through some trial and error in various ways, but please keep moving forward without fear. I think everyone’s understanding is indispensable to achieving the goal. On the other hand, we still have much to do regarding maintaining compliance. We, including management, will devise ways to strengthen compliance.

Management planning

In the Management Planning Headquarters, the Corporate Planning Group is developing and operating a system for transparent discussion and resolution of various investment projects that are increasing in number and scale, from the working level to the Management Meeting and the Board of Directors, so the workload is growing. Even under such circumstances, I appreciate that this group works steadily without cutting corners. Please also make efforts to manage the progress of the new medium-term management plan.
The NYKman project, led by the Accounting Group, is a redevelopment of the corporate infrastructure related to business and administration and is an integral part of our future workstyle reforms. It is a daunting task, but please complete it on schedule.

In the IR field, the voices of shareholders and investors are becoming increasingly important in corporate management. I have been increasing opportunities to listen to their voices and respond to them directly. We could receive robust opinions, but please listen to them as a source of inspiration and build our fan base as a spokesperson for the Group.

In the cruise ship business, the new Asuka III will officially go into service in 2025. Although the preparations to operate two ships are enormous, I want the relevant divisions at the head office to provide thorough support to the project centered on NYK Cruises Co. Ltd. to ensure that the new ship goes into service on schedule. Each of us involved in this project must consider it as our own matter.

Finally, I would like to say a few words about group management. What we aim for in the new medium-term management plan cannot be achieved by NYK alone. It is a sense of unity through “co-creation” involving all NYK Group companies. I want the Group Management Promotion Group of the Management Planning Headquarters, the Technical Headquarters, and each of the business divisions to listen to the voices of the jurisdictional group companies, solve problems, and reach our goals together. I want everyone in each group company to voice their opinions without hesitation.

These are my greetings on the anniversary of the NYK Group’s founding.