Mitsui O.S.K. Lines Ltd , Japan’s second-biggest shipping line in terms of sales, said spinning off its container shipping division was one option to turn around the loss-making business.
‘Mitsui O.S.K. is the only shipper among Japan’s three major shipping companies to have forecast a first-half profit, as it managed to avoid the worst of a collapse in commodity shipping rates by locking in fees through long-term contracts. But the container business is the biggest drag on its earnings in the year to March 2010 due to unprofitable rates, sagging volumes and oversupply concerns. “That (spinning off) would increase flexibility and speed up decision making, consolidating the business with other firms for instance,” Kenichi Yonetani, Mitsui O.S.K. senior managing executive officer, told Reuters in an interview on Thursday. He said he there would be more benefits in consolidating the business with that of a foreign ally than a Japanese rival such as Nippon Yusen KK or Kawasaki Kisen Kaisha ere would be no overlap of facilities. Mitsui O.S.K. expects a loss of 20 billion yen in the container division for the year to March 2010, following a 21.3 billion yen loss in the 2008/09 business year.