“K” Line to expand fleet to 500 ships

“K” Line to expand fleet to 500 ships

“K” Line to expand fleet to 500 ships

   Kawasaki Kisen Kaisha Ltd. plans to expand its fleet to 500 ships under a new five-year plan.

   Yasuhide Sakinaga, president of “K” Line, announced that the Japanese shipping group will introduce a new five-year plan once it has announced its yearly financial results in May 2004. Sakinaga explained that the new “post KV-Plan” will be introduced because the prospected final results for the year will exceed expectations for the original “KV-Plan” one year ahead of schedule.

   Part of the new plan will see the total vessel fleet increase to at least 500 ships by 2008, from 352 today. In addition to existing vessel orders for 43, “K” Line expects order another 100-odd ships at a cost of about 300 billion yen ($2.8 billion). “K” Line have no details for the breakdown of the ship types involved in the fleet expansion.

   “K” Line said that the fulfilment of the original “KV-Plan” was a combined result of market improvement and its cost-cutting initiatives, which have seen its intended saving of 30 billion yen ($280 million) in three years being achieved in two years.

   Sakinaga said that he expects to see the current profitable situation in the containership market continue until 2006. After this, he said that “deeper and more intense” co-operation with its alliance partners — COSCO, Hanjin Shipping and Yangming Marine — especially in terms of vessel orders, would be necessary to combat a downturn in profitability.

   Sakinaga also said that, over the next five years, he expects to see “K” Line’s involvement in non-containership markets increase, narrowing the difference between itself and its fellow Japanese competitors Mitsui O.S.K. Lines and NYK.