MOL has said it plans to limit its market exposure in the face of global coronavirus pandemic.
“Coronavirus is raging all over the world. In my view, it is inevitable this will significantly affect global trade volume, including the product category, due to travel restrictions aimed at preventing the infection from spreading,” chief executive Junichiro Ikeda said in a briefing to staff on Wednesday.
“To be specific, we will take steps to limit our market exposure while keeping in mind the loss in cargo transport volume — I think this sums up everything at the present time.”
Remote working
Ikeda said the company had shifted its staff to working remotely since March in an effort to prevent the spread of infection.
He said the pandemic was “structurally different” from the 2008 financial crisis triggered by the collapse of Lehman Brothers.
“The current crisis is shrinking the real economy, particularly human activity itself, so the real impact, including the psychological effects, is immeasurable,” he said.
“In this sense, I think the ongoing economic effects triggered by the expansion of this outbreak may lead to significant changes.”
Ikeda said that under such a crisis, MOL must “make efforts to ensure profits in FY 2020 and steadily execute measures to achieve it”.
In this fiscal year, he said MOL planned to operate businesses in which “we are always conscious of controlling our market exposure”.
However, he said this “abnormal situation” may become prolonged, but sooner or later it will end, and the economy must move toward recovery.
'Vision unchanged'
Ikeda said the company’s vision still “remains unchanged”, despite the deteriorating business environment and changing economic conditions due to the pandemic.
He said MOL would continue to work towards making the company a group of business units that were the most competitive in their respective areas.
“In the same manner, we are moving forward with the allocation of management resources in business fields where we have a competitive advantage, while being conscious of financial discipline,” he said.
Under its latest business management plan, the company has created a number of new organisations within it with effect from 1 April 2020.
These include the establishment of the post of chief environment and sustainability officer and a chief digital officer.
Other new positions include an executive officer post to oversee productivity improvements, an executive officer in charge of enhancing group management and also an executive officer in charge of domestic regional strategies to "recognise and utilise local networks".
Ikeda said MOL had also restructured its offshore project division into two separate entities, effective from 1 April 2020.
The division will remain responsible for crude oil-related businesses such as floating production, storage and offloading projects and shuttle tankers.
However, its LNG-related businesses such as floating storage and regasification units and LNG powership businesses will now form part of the newly established offshore gas project division.
MOL will transfer its offshore wind power business — and its associated arms from its new and clean business division — to the steaming coal and renewable energy project division to better promote the technology to its power-company customers.
