39 Hitoshi Nagasawa, NYK Line
Hitoshi Nagasawa’s designation as NYK Line’s new commander comes at a critical moment when the Japanese shipping conglomerate is striving to win back its lead position
Having worked for the group for almost 40 years, the new president now needs to lead the 134-year-old company into a new era
HITOSHI Nagasawa was named as the new president of NYK Line in April this year.
The appointment came at a critical time, when the Japanese shipping giant posted its third-worst annual results in a decade and was striving to get back on its feet.
The consolidated net loss stood at ¥44.5bn ($407.7m) for the fiscal year 2018 ended March 31, 2019, compared to a year-ago profit of ¥20.2bn.
Born in 1958, Mr Nagasawa has worked his way up to the helm after nearly 40 years of service at NYK, having seen the booms and busts of the business cycle.
Now he needs to lead the 134-year-old conglomerate into a new era of shipping.
The company’s finances have improved this year, but tough challenges remain.
A net profit of ¥11.1m was posted for the first half of fiscal year 2019, while the latest full-year forecast suggested the gains would expand to ¥26bn.
The turnaround was largely attributable to the recovery of its container shipping joint venture, Ocean Network Express.
However, prospects for the liner shipping industry are still being weighed down by various factors — not least the China-US trade war that is affecting cargo volumes and the IMO 2020 sulphur cap, which is set to ramp up carriers’ bunker costs.
The same geopolitical uncertainty has also hit NYK's air cargo business, which recorded ¥10bn extraordinary losses in November and is struggling to crawl its way back to profit.
“We are working to increase the earnings capability and strengthen our ability to withstand the changing business environment by optimising the portfolio and securing stable freight-rate business,” said Mr Nagasawa at a recent results presentation.
He also pledged to press ahead with the company’s medium-term management plan, 'Staying ahead 2022, with digitalisation and green'.
The plan, as the title implies, not only consists of business enhancement measures but also higher targets for environmental compliance, research and development, as well as corporate social responsibility.
One of the goals on the financial side is to raise NYK’s profits to ¥70bn-¥100bn in the fiscal year 2022 from ¥28bn in 2018.
On the compliance and technology front, its latest efforts include an agreement with partners to develop an advanced maintenance system for autonomous ships and the participation of the Getting to Zero Coalition.
More importantly, it must ensure “the business activities contribute to the sustainable development of society and enrichment of our corporate value”.
This view was echoed by Mr Nagasawa in his inaugural speech to his staff in Tokyo.
He began by quoting the famous Japanese entrepreneur Konosuke Matsushita: "With an awareness of our responsibility as a public entity of society, let’s be proud that we can contribute to society in so many ways and aim together to remain a corporate group that is trusted by the world."
In the next three years, the key to success for Mr Nagasawa is to stand firm in his convictions while trimming the sails amid shifting market conditions.