Mitsui OSK Lines lowers profit target

In a significant impact from the global economic crisis, Mitsui OSK Lines (Thailand), or MOL (Thailand), yesterday revised this year's projection for the movement of containers in and out of Thailand.

The move is in line with the slowdown in exports in the second half of the year following the eruption of the financial crisis in the US and global economic difficulties.

MOL (Thailand), which is celebrating its 40th anniversary in the Kingdom, handled about 300,000 20-foot container-equivalent units last year, up 16 per cent from 2006.

"We have revised our projection this year by reducing the growth in the number of TEUs handled by the company from 10 per cent to only 3 per cent. The company estimates it will handle about 310,000 TEUs in total this year," said president Takao Furukawa.

"Despite a significant growth foreseen last year, we started to recognise a significant slowdown in the second half, mainly in the transportation of products such as auto parts, tyres, electrical appliances and electronic products, due to the slowdown in exports," said Furukawa.

"In view of the 2007 export-import figures [3.2 million TEUs exported/1.7 million TEUs imported] and 2008 estimates [3.3 million TEUs exported/1.9 million TEUs imported], and considering the current economic situation in Thailand, we see both the export and import businesses remaining steady in 2009, as well," he said.

The parent company expects its Thai revenue to reach Bt1.1 billion this fiscal year ending next March 31.

Akimitsu Ashida, president of Mitsui OSK Lines in Japan, said the parent company had lowered this year's net profit target to ¥300 billion (Bt106 billion), from ¥350 billion before.

The company's share price also dropped significantly, by 75 per cent, from ¥2,000 apiece to ¥500.

He said product movement into the US market had dropped 10 per cent, due to the economic turmoil, while those shipped into Europe are facing a flat growth, down from 7-8 per cent growth posted last year. This affects many container carriers.

"I personally believe that this global economic crisis will be prolonged, lasting another two years," said Ashida.

However, Furukawa believes in the great potential of the carrier business in Thailand.

"Many Japanese manufacturers, especially auto-makers, are investing in Thailand to make the country their main manufacturing centre, and they are also moving their corporate regional headquarters functions to here from other areas, particularly Singapore.

This trend is expanding to manufacturers of other products, including auto parts and home appliances, which means exports will increase dramatically, and the import of raw materials will increase, as well.

Furthermore, the present boom in Japanese foods and an increasingly Western lifestyle are also boosting the import of food and materials. It means this will place huge demands on logistics providers for timely and reliable delivery, not only internally, but also abroad.

"We expect demand for logistics to increase day by day, year by year," he said.

Furukawa said his company would officially open its first own container depot in Thailand next April. Located 10 kilometres from Laem Chabang Port, the container depot will occupy 47.4 rai of land and respond to a huge demand of customers for quick and convenient pick-up or return of containers to the depot.