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At 133 years old NYK needs to transform or die chief warns

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Tadaaki Naito, president of NYK, one of the world's largest shipowners has warned on its 133rd anniversary that it must transform it's business or face the possibilty it will not survive.

“I feel that our group is currently facing a situation more challenging than anything it has faced in the past. If we continue to rely on outside forces under the belief that we will be OK continuing the current business as long as the market recovers, I feel the company will not survive,” Naito said an address to employees at the company's head office in Tokyo.

The company's medium term management plan to 2022 emphasises digitalisation and the environment with a more flexible asset light operation. “In fact, the plan clearly states that we will liquefy assets in order to obtain the capital necessary to develop and transform our businesses. And to carry this out, we need to revise the entire group,” he said.

On the technology side he said: “There is a need to utilize digital technology to streamline business management and reduce costs, and as a means to flexibly respond to changing customer needs.” 

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On the environment part NYK has three objectives – 100% compliance with regulations, energy conservation and new business opportunties.

“By working proactively instead of reactively, we must create a corporate structure that enables us to respond to the inevitable shift to a 'green society'. I ask all of you to watch with a keen eye to identify the hints around you of how to best respond to the environment,” Naito said.

He also promised to re-establish corporate governance over the group after Nippon Cargo Airways was hit with an administrative penalty by Japan’s Ministry of Land, Infrastructure, Transport and Tourism over deficient aircraft maintenance. There was also the issue of company wide compliance with anti-trust laws.

“In order to carry on executing the management strategy while responding to societal demands, it is important for groupwide governance to be functioning properly. Based on the awareness that maintaining social trust is an absolute requirement, I intend to reestablish reputable group governance.”

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