Shipbuilding, Shipping, Environment, Energy, Service - Accelerating diversification and globalization with five business domains -
April 21, 2016
We at TSUNEISHI HOLDINGS (HQ: 1083 Tsuneishi, Numakuma-cho, Fukuyama-shi, Hiroshima; President: Hirotatsu Kambara) will exert the synergy of our group management resources to propel diversification and globalization in five business domains: our established shipping and core shipbuilding businesses, as well as
environment, energy, and service. Through these efforts, we will stabilize our business base for the medium to long term.
TSUNEISHI HOLDINGS CORPORATION
Consolidated sales in the fiscal year ending December 2015 (January 1 - December 31, 2015) for TSUNEISHI HOLDINGS (30 companies including TSUNEISHI HOLDINGS) came to 238.3 billion yen, a decline of 51.5 billion yen (-18%) year-on-year. By segment, shipbuilding business sales were 179.1 billion yen, a YOY decline of 44.5 billion yen (-20%), due to factors including the sale of TADOTSU SHIPBUILDING. Sales in the shipping business came to 32.6 billion yen, a YOY decline of 11.0 billion yen (-25%) because there were no ship sales. However, our environment business was strong with sales of 7.4 billion yen, an increase of 300 million yen. Due to steep drops in oil prices, the energy business declined to 22.2 billion yen. For the service business, facilities such as Miroku-no-sato and Tsuneishi Shimanami Village had record numbers of visitors. The addition of our small airplane business to consolidation figures resulted in marked growth to 12.6 billion yen. We project consolidated sales in the FYE December 2016 to reach 240.0 billion yen.
1. Shipbuilding Business
＜Energy-saving technology advanced and applied to various ship types＞
While we have secured orders for our group core business of shipbuilding through the end of 2018, sea cargo movement stagnated due to factors such as the decline of the Chinese economy. Freight shipping rate have remained low for carrying bulk cargo such as iron ore and grains. TSUNEISHI SHIPBUILDING have advanced energy-saving technology for the bulk carrier, our core ship model, and are gradually applying this to other models such as container carriers and tankers, receiving new shipbuilding orders for the Aframax Tanker and container carrier. We also set upon a three-year plan to select and develop a next-generation ship model that responds accurately to market needs.
TSUNEISHI SHIPBUILDING work closely with group companies located overseas such as in the Philippines and China to nurture global human resources that will drive business in the next generation. Major capital investments at the Tsuneishi factory undertaken in the last two years will be almost completed by the end of this year. As the “core factory”, this facility will share Tsuneishi quality, which is backed by experience and results, with our overseas locations. As a result, we will supply better Japan quality ships to customers from all of our factories.
2. Shipping Business
＜Taiwan and Southeast Asia enhanced; shift to a stable revenue structure with a diversified fleet＞
For KAMBARA KISEN’s liner business, we formed a new alliance with Shanghai Haihua Shipping Co., Ltd. (HASCO) for the Taiwan route in April. This enables us to better accommodate shipping needs in Taiwan, adding Gaoxiong to our Taichung and Jilong ports of call in Taiwan. The Shanghai transshipment agreement with Regional Container Lines, a major shipping company in Thailand, remains in place. With an increasing number of shippers transferring manufacturing hubs to Southeast Asia, we will enhance services such as shortening transport turnaround between regional ports in Japan and Southeast Asia by partnering with other shipping companies and using Shanghai as a hub port. KAMBARA LOGISTICS will enhance international multimodal transport with its base at Fukuyama Port and contribute steady revenue to shipping operations.
In the tramp business, fuel oil prices have greatly dropped due to declining crude oil prices, but the dry bulk market has worsened because of an ongoing oversupply of tonnage. Although we have long-term charter contracts with shipping companies in Japan and abroad that were signed during prosperous times, the situation remains harsh. As of the end of December 2015, KAMBARA KISEN (including overseas subsidiaries) retain 37 ships. We plan to increase the ratio of ships other than bulk carriers by 2020 to diversify our fleet, including new ship models.
3. Environment Business
＜Growth accelerated through M&A to expand business＞
Following the acquisition of Futaba Sankyo CO., LTD in July 2015, we acquired Toko Corporation in January 2016 to step up our recycling initiatives. We are working toward 100% recycling by acquiring new technologies to make compost out of waste and raw fuel out of cement and manufactured iron.
At TSUNEISHI KAMTECS, we are working to enhance our sales base and treatment facilities in Japan. At the same time, we are preparing the infrastructure for the waste treatment business we are rolling out in Asia. The wastewater treatment business in Thailand is gaining momentum, and we are developing business through a recycling model to accommodate waste disposal needs that are becoming more significant in Asian countries as these economies grow.
＜Aiming for a complete waste-recycling model to eliminate environmental damage＞
TSUNEISHI KAMTECS are devoted to developing non-incineration waste treatment methods and to recycling waste completely for zero damage to eliminate the need for final disposal sites. The conventional method of reclaiming disposal sites with incineration ash cannot be considered sustainable with the aging of incinerator facilities and the remaining years’ capacity of landfill sites. To become a sustainable society that doesn’t use final disposal sites, we aim to completely recycle waste by effectively utilizing it as a resource, such as energy. Our fundamental approach is that “everything is useful,” rather than simply treating trash as waste.
4. Energy Business
＜Launch of electric vehicles (EV) business in Asia and electricity sales business＞
TSUNEISHI C VALUES supply community-based energy and automobile-related services to pursue all possibilities for human, cars, and energy. In the energy business, revenues declined for petroleum operations due to the substantial decline of crude oil prices. On the other hand, we enhanced overseas businesses, including used car parts exports to Paraguay. We also launched electricity sales by generating solar power on Omishima Island of the Seto Inland Sea in addition to our domestic solar panel sales business.
As a new business, we will harness our automobile sales and maintenance technology to roll out EV manufacturing and sales operations in Asia. Traffic jams and air pollution are worsening with the growing populations, urbanization, and economic development of Southeast Asian countries. We conducted verification tests of electric tricycles (E-Trikes) in 2014 at Cebu (Balamban) in the Philippines, which is an overseas hub of our shipbuilding business, and are preparing to launch sales there. We are also steadily working to cultivate more businesses, one being the development of a compact four-wheel EV at a research lab in China.
5. Service Business
＜Miroku-no-sato and Tsuneishi Shimanami Village visitors reach record levels＞
TSUNEISHI LR are creating bustle in the Bingo area of Hiroshima with its hotel/resort/leisure facility operations including the Seto Inland Sea spa resort Bella Vista SPA & MARINA ONOMICHI, Jinseki Kogen Hotel, and Miroku-no-sato.
In the amusement park category, visitor numbers reached a record high of approximately 350,000 in 2015 with the introduction of water slides last summer and the decorative illuminations that caught on with visitors. In the accommodation/dining category, the activity-oriented Tsuneishi Shimanami Village also achieved a record number of guests (88,000 overnight guests in 2015). In the marina & hotel business, Bella Vista SPA & MARINA ONOMICHI opened the new main restaurant, Erretegia, in July 2015. With the Ribbon Chapel winning the international LEAF Award also, which recognizes innovation that will serve as the standard for next-generation architectural designs, the number of weddings increased and both room prices and occupancy rates improved.
TSUNEISHI LR will continue to hire new graduates and mid-career employees to revitalize its communities with the objective of further developing and growing business.
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TSUNEISHI HOLDINGS CORPORATION
Marketing Communication Group, CSV Department