First of all, I thank all of you for your cooperation on the safe voyages of our managed vessels in 2011; we didn’t have any big accidents last year and this was due to your good performance for the safety of our vessels.

For the people in shipping business, last year was a real turbulent year. Japanese economy was hit by the Great East Japan Earthquake on 11th March, and at the same time the Japanese shipping industry received a great amount of negative influence from the accident.

The Japanese shipping companies including ours have had two big matters last year.

The first one was Dollar-Yen currency. This strong Yen produced a rapid fall in our earning power and furthermore we were hit by reducing export cargo from Japan because Japanese companies lost competitiveness in export brought about by this strong Yen. They are now trying to shift their production facilities outside of Japan to maintain the competitiveness. We should carefully watch this trend and prepare for the reality.

The second thing was the act of nature last year. In addition to the big earthquake in Japan, we had a massive flood in Bangkok in August 2011. Due to the earthquake, subcontract factories of the car industry in eastern area in Japan were heavily affected and supply disruption of car parts made drastic reduction of automobile production and stopped car export from Japan. This temporary state of suspension of exporting cars gave heavy damages to Japanese shipping companies. We, managing more than 50 Pure Car Carriers from K Line, tackled the problem by laying up several vessels and ordered slow steaming to almost all our PCCs. The flood in Bangkok followed and car export from Thailand declined. K Line, one of the biggest shipping companies transporting cars, was severely affected by those incidents last year.

For the world-wide shipping industries, the first problem was the confused situation in Europe. Starting from the Greek crisis, people lost fiscal sustainability in Europe, this has been yet to terminate and the whole world economy has been placed in a very unpredictable situation. Naturally the shipping financial condition should be harder than before and a deteriorating economy in Europe has created decline of cargo movement. Those matters will affect the shipping industry very badly in this year.

The second thing is the ongoing high price of bunkers. Fuel oil sticks close to USD700 per ton level and shipping company’s earnings are seriously affected.

The third thing is about piracy. The situation has not improved and remedies　were only a countermeasure that never leads to a solution of the fundamental cause. Therefore, the problem will continue in this year, but this involves human life and invests great deal of time and expenses. We hope that all the countries involved should work out effective measures to solve the problem.

In the dry and wet market, we suffered enough from its drastic ups and downs and also the unstable movements. The previous year was a very difficult period for the shipping industry and those troubles were not solved and were passed on to this year. It is very hard for anybody to predict what direction we are going to go in this year. A series of elections will take place, top ranking officials of the U.S.A., China, Russia and France will be newly elected in this year, and thus probably, current leaders cannot carry out necessary measures until election will be finished. After the elections, we would expect those new top leaders to implement some special and effective measures against financial and economical problems in their respective areas.

In the shipping world, this depressed situation will not last long.　We should think and take appropriate countermeasures both as industry-based and independent company wise. TNKC will fully cooperate with K Line for their measures on earnings recovery.

What is year 2012 for TNKC? How do we act in this year? The expansion of company organization was almost finished. Now we have four pivotal points of ship management　in the world - Kobe/Manila/Bremen and London, and we have three crew recruiting sources - Manila, Varna and Odessa. From the 1st of January this year, Manila office was renamed as TNKC-ROHQ (TNKC-Regional Operating Headquarters) that has same ship management system with Kobe and has more coherent and transparent relations with our other offices. In this year, we will further shape up the contents of this system to work better and better. The most important mission of our company is “safe voyageｓ”and in order to achieve this objective, we should take proper actions in hardware and software by utilizing this newly established system. We should share common awareness of the problems by establishing close communication through this new system. We will level up our total crew quality by conducting more fulfilled TTOS in many places; to enhance personal relationships by close exchange of human resources between offices. One by one, we will put these matters in effect in this year.

“Zero accidents” and “the safety of human life” are the basis to get Owners and Customers’ reliability and at the same time the best factors for cost savings. You are the professionals in shipping and have high skills, sophistications and experiences but please rethink about conventional wisdom of your job and try to make an improvement.

You should be very busy in this year, I hope that you all take care of your personal health and let’s work together to overcome every difficulty that we are facing.

I wish all of our ships safe voyages, and you all, working afloat and ashore, and your family - good health, happiness and prosperity in the year 2012.

Thank you.
Yoichi Hasegawa
President