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Mitsui OSK’s massive cutback plan may leave blood trails

The top management in the Japanese Mitsui OSK Lines, led by Koichi Muto, will sell off dry bulk and tanker ships, scrap and not least annul contracts, and return chartered ships. The latter may have a serious impact on a long list of companies once the reform plan has been presented.

In a detailed address to the nation and the company’s investors on Friday, the top manager Koichi Muto from the Japanese company Mitsui OSK Lines (MOL) presented a gloomy outlook for one of the world’s largest shipping companies, which for the second year in a row must face a billion-dollar deficit of about $1 billion in 2012.

Yet Koichi Muto also delivers a solution, a reform of the entire group, which includes a massive divestment, scrapping, returns of chartered ships and cancellations of contracts, particularly in dry bulk and tank with a view to reducing the free tonnage. And the container company, wherein Mitsui is a part of is the so-called G6 alliance, also contributes to the deficit.

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