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NYK slims down expansion plans by as much as 60 vessels

NYK slims down expansion plans by as much as 60 vessels

Tokyo: Nippon Yusen Kaisha, Japan's largest shipping line by sales, has cut its fleet expansion plan by up to 60 ships as slowing growth decreases demand for shipping.

Nippon Yusen will boost its fleet to 940 vessels at the end of March 2011, compared with earlier plans to increase it to 1,000 ships, spokesman Atsuto Kato told Bloomberg in a phone interview today in Tokyo. The shipping line had 776 vessels at the end of March.

Nippon Yusen will revise its medium-term profit forecasts next year, Kato said.

"The global recession is hurting demand," Kato said. "We will announce a revision in our forecasts next year."

The shipping line predicts net income of 140 billion yen ($1.51 billion) in the fiscal year ending March 31, and 145 billion yen for the next two fiscal years. Japan's Nikkei newspaper reported the company's revised expansion plan earlier today.

Nippon Yusen shares rose as much as 5.1 percent to 492 yen in Tokyo and traded at 491 yen as of 9:29 a.m. They have fallen 44 percent this year.

Mitsui O.S.K. Lines Ltd., Japan's most profitable shipping line, said earlier this month it may lower its earnings forecast this fiscal year as daily charter rates for its largest coal and iron-ore vessels have tumbled 98 percent to a record low.

Mitsui O.S.K. may not meet its targets, Kenichi Yonetani, a managing executive officer at the company said in a Bloomberg Television interview on Dec. 3. The world's largest merchant fleet operator may mothball vessels because of the drop in daily charter rates.

Demand for commodity transport has slid as China, the world's biggest user of iron ore, has slashed steel production and economic growth in the U.S., Europe and Japan is forecast to shrink next year, according to the Organization for Economic Cooperation and Development.  [9/12/08]