Dec 26, 2014

Naito to assume NYK's presidency on April 1


Yasumi Kudo and Tadaaki Naito

Nippon Yusen Kaisha announced on Dec. 25 that President Yasumi Kudo will become chairman and corporate officer as of April 1, 2015 and Executive Vice President Tadaaki Naito will be promoted to assume the presidency. Chairman Koji Miyahara will become a director and board counselor, it said. Naito told a press conference, "As commoditization progresses in logistics service business, we cannot survive by simply relying on our brand that has been brought by our history of 130 years. We must differentiate our services and have them evaluated by our customers. I will push ahead with promotion of ingenuity and improvement across the board, including our administration division." He added he will take over his predecessor's "differentiation strategy" and carry forward the targets and business strategies defined in his firm's new midterm management plan launched in 2014.

On the timing of the major personnel reshuffle, Kudo said at the same press conference, "After I assumed the presidency in 2009, we slipped into big losses due to the Lehman shock that year and the Great East Japan Earthquake and the European economic downturn in fiscal 2011. Our performance gradually recovered from fiscal 2012 onward and we expect to report a profit of Y65-66 billion in fiscal 2014. Now we can make a decent annual profit although it is still not convincing enough. NYK holds out 'sincerity, ingenuity and passion' as its corporate aims. More than anything else, we need to have youth to uphold ingenuity." Referring to his firm's involvement in the alleged car carrier cartel formation, he said, "While the case has not yet been settled in various countries, I worked hard to learn more about the antimonopoly laws and could instill the message into our staff. That has also motivated me to pass the baton." Kudo credited himself for NYK's start-up of the offshore business and expansion of car-related logistics service business.

Naito said of his management policy, "We experienced shipping booms in the past when everyone could make money by simply possessing ships. I think that is one aspect of shipping business. But I wouldn't bet on that but seek to grow domains where we can differentiate ourselves. LNG, offshore and car logistics are such domains. I see Nippon Cargo Airlines (NCA) and our liner shipping segment as major future challenges. I will work to see them survive through differentiation."
Naito joined NYK in 1978 and worked in various segments including containership, car carrier, semi-liner, NCA and tanker. He became corporate officer in 2005, managing corporate officer in 2007 and representative director and senior managing corporate officer in 2009. He has assisted Kudo as representative director and executive vice president corporate officer since April 2013.
He headed the Group Management Headquarters in 2009, the Management Planning Headquarters in 2010-2011, the General Cargo Transportation Headquarters (containerships, logistics and air cargo) in 2012 and the Technical Headquarters in 2013. He served as chief financial officer (CFO) in 2009-2011, playing a core role in strengthening NYK's financial base after the global financial crisis.
More recently, Naito promoted slower navigation for energy saving as general manager of the Technical Headquarters. He led a group-wide campaign with an appeal: "The global shipping industry is sure to proceed in the direction of economic rationality through reduction of fuel consumption. A success or failure in this race will determine whether we can eventually stay in the market or have to pull out." He also proposed that NYK start new business projects by utilizing its high technologies. His proposal was put into the firm's new five-year midterm management plan "More Than Shipping 2018 - Stage 2 Leveraged by Creative Solutions".

[Naito's profile]
Naito joined NYK upon graduation from the Faculty of Economy of Hitotsubashi University in 1978. He served at the Hamburg Office of NYK Line (Europe) Ltd. in 1992 and became manager of the Liner Group in 1996, general manager of the Petroleum Group in 2004, corporate officer in 2005, managing corporate officer in 2007, director and managing corporate officer in 2008, representative director and senior managing corporate officer in 2009 and representative director and executive vice president corporate officer in 2013. Born in Nagoya, Aichi Prefecture, on Sept. 30, 1955, he is 59 years old.

*Promoting differentiation with emphasis on technology

Naito, an odds-on favorite for years, is assuming NYK's presidency. He is a mild person and his artless way of speaking gives out no coercive pressure. But he is known to be a muscular shipping man who pursues the true nature of things. He behaves with thoroughness whenever necessary in an uncompromising manner. That may perhaps be his character. But it seems to me that he is stubbornly loyal to his duties.
Particularly impressive to me is what he did as chief financial officer during the post-Lehman shock recession. He pressed ahead with reconstruction of NYK's impaired finance, cost reduction and liquidation of group subsidiaries and affiliates. His style often met objections. But he was obviously driven by his sense of crisis that no end should be put to NYK's long history.
Faced with the upsurge of fuel oil prices, Naito spearheaded the group's energy-saving campaign. Feeling so much about technology, he always talks passionately about the importance of technology as the key in his firm's differentiation strategy. One of his traits is to be skeptical about common knowledge. He was often seen to tell his staff, "Are the general sayings really true?", "You can see it in different perspectives," or "You can do it better this way." He hates their habitual behaviors and urges them to doubt business common sense.
The global shipping industry went through turbulences in the past years. The conclusion NYK drew from the unprecedented shipping boom that lasted from 2003 and the dreadful depression that came after the Lehman shock was "More Than Shipping," the main theme of its midterm management plan. Technology holds the key in this strategy aimed to promote differentiation by adding something else to conventional shipping. But it means a lot more. It requires each of the staff to review his or her duty, improve the way to do it and aim for better profitability. In short, originality and ingenuity are the key words.
NYK's management policy of "More Than Shipping" is clear enough. With the global tonnage glut seen to continue, it has no other choice but to promote differentiation and enhance profitability through originality and ingenuity. Naito is resolved to play the role of a preacher to firmly establish and deepen this policy line.
(By Naoki Nakamura)

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