"K" Line

KAWASAKI KISEN KAISHA, LTD. (“K” Line) is pleased to announce the launch of new Asia/India/Pakistan services; PMX (SWACO-K1) and PIX (SWACO-K2) with enhanced port coverage. “K”Line continues to offer stable and value-added services with varied network.

Details of the service are as follows:-

PMX

• Vessel Deployment:  Six (6) x 4200 TEU type vessel
• Port Rotation:  Qingdao – Shanghai – Ningbo – Singapore – Port Kelang – Karachi – Mundra – Colombo – Singapore – Qingdao

• Commencement Date: 28th AUG 2016 ETA Qingdao

PIX

• Vessel Deployment:  Five (5) x 4200 TEU type vessel
• Port Rotation:  Fuzhou – Hongkong – Nansha – Shekou – Singapore – Port Kelang – Colombo – Karachi – Mundra – Port kelang – Fuzhou

• Commencement Date: 8th SEP 2016 ETA Fuzhou

August 18, 2016

Kawasaki Kisen Kaisha, Ltd. (“K” Line) is honored to have received recognition from the port authorities of both Long Beach and Los Angeles, for recording high level of compliance throughout 2015 with voluntary speed reduction by“K” Line’s containerships, car carriers and dry bulk carriers in the two ports’ respective programs in order to prevent air pollution and warming by slowing ships within the designated water.

Ships participating in the program are asked to comply with speed limit of 12 knots within 40 miles (about 74 kilometers) from each port in order to reduce emissions of exhaust gases containing nitrogen oxide (NOx), sulfur oxide (SOx), particulate matter (PM) as well as CO2 from ships. As a result of this year’s achievement, “K” Line has been honored to receive this award from the Port of Long Beach for eleven consecutive years since 2005 and from the Port of Long Beach for eight consecutive years since 2008 when their awards were commenced respectively. Especially, as to the Long Beach program, there were only two carriers including “K” Line which both recorded more than two hundred calls at the port and more than 90% compliance rate.

Recognition:

Long Beach Port “2015 GREEN FLAG VESSEL SPEED REDUCTION PROGRAM”

(“K” Line meets 99.31 compliance rate, totaling 286 compliant legs.)

Los Angeles Port “2015 VESSEL SPEED REDUCTION PROGRAM”

(”K” Line meets 100% compliance rate, totaling 63 compliant legs.)

“K” Line Group continues its focus on contributing to environmental and biodiversity conservation through its active participation in environmental initiatives taken by port authorities around the world in order to fulfill our mission to hand down a sustainable society as well as this blue and beautiful ocean to the next generation under “K” Line Environmental Vision 2050.

Kawasaki Kisen Kaisha, Ltd. (“K” Line) and “K” Line Pte Ltd. (KLPL), have signed the ship building contracts for three next generation VLCCs and two AFRAMAX tankers in line with their fleet upgrading plan under the newly-reformed Medium-Term Management Plan, “  　 Value for our Next Century – Action for Future -“.

Orders for two VLCCs were placed by “K” Line with Kawasaki Heavy Industries, Ltd. (KHI) which will deliver them in 2017 and 2018, respectively, and order for one VLCC with Namura Shipbuilding Co., Ltd. which will be delivered in 2018, whereas orders for two AFRAMAX tankers were placed by KLPL with Namura Shipbuilding Co., Ltd., which will deliver them in 2018 and 2019, respectively.

These VLCCs and AFRAMAX tankers are designed to comply with all existing regulations as well as forthcoming rules such as the International Convention for the Control and Management of Ship’s Ballast Water and Sediments.

Main Particulars of VLCCs

Shipyard　Nantong Cosco KHI Ship Engineering Co., Ltd.　 Namura Shipbuilding Co., Ltd. Imari Shipyard

Delivery                        2017, 2018                    2018

LOA                              339.5m                         338.9m

Beam                            60.0m                           60.0m

DWT                             311,360MT                    310,300MT

Tank Capacity                348,500m3                    351,500m3

Main Particulars of AFRAMAX tankers

Shipyard                        Sasebo Heavy Industries Co., Ltd.

Delivery                        2018, 2019

LOA                              243.8m

Beam                            42.0m

DWT                             113,000MT

Tank Capacity                125,400m3

With these five new ships, “K” Line and KLPL will continue to provide reliable and stable service to our valued customers with the highest standard of safety.

“K” Line Group are focusing on maintaining and improving vessel safety operations and environmental preservation as we regard these as our first principle in running our business sustainably, fulfilling our social responsibility.

As part of confirming this principle, “K” Line and Kawasaki Heavy Industries, Ltd Group have developed “K-IMS”^*1 ; Integrated vessel operation and performance management system.

“K-IMS” is based on two systems which already exist in our fleet ; “SPAS”(Ship Performance Analyzing System) which is the electrical AB log and vessel performance analyzed, and “EP-Monitor”(Engine Plant Monitor) which is a remote monitoring system for the vessel engine plant condition. However, we have developed a new system by integrating “EP-Monitor” which is able to collect and observe all kinds of operation data including navigation data and “NAVI” (Optimum Navigation System) which we have newly adopted. Integrating these individual systems enables us to utilize the real-time operation data from vessels, so-called Big data, into a mutual system and also enables us to support vessel operation and manage vessel performance in a simple way by taking real-time vessel operating conditions, optimum safety route selection, the latest vessel performance and so on, through the new data browsing system that we have developed.

“K-IMS” and the Big data are managed in the cloud system via a shore server and they have various functions such as observing the operating condition of vessels, analyzing the performance of vessels and deciding the safest and recommending the lowest course cost based on the analysis results and weather information. “K-IMS” can be shared among operation teams, ship management companies and vessels. Therefore, it will contribute not only to safety navigation and saving fuel costs but also dramatically improving efficient vessel operations and management.

Furthermore, Kawasaki Heavy Industries, Ltd and “K” Line Ship Management Co., Ltd., part of the “K” Line group, recently applied for the project “to support R&D of advanced technology for safe vessels” offered by the Ministry of Land, Infrastructure and Transport.  Our development project “Enhancing analysis accuracy by automatic correction function with hull property model and applying it to safety operation” was adopted because it merits the development of “advanced safe vessels” by IoT (Internet of Things) for vessels’ equipment with marine broadband and making use of Big data.  With the success of this project the accuracy of the Optimum Navigation System in the “K-IMS” is much improved and it is expected that further improvement of ship safety and economic operations will be achieved in appropriate navigation route selection.

“K” Line will continue to work on environmental preservation and economic operation, continuing to build a reliable safety operation organization by improving the accuracy of the optimum navigation system and further developing and utilizing of bottom fouling analysis system, trim optimization system, engine diagnose system on “K-IMS”.

^*1 K-IMS : Kawasaki – Integrated Maritime Solutions

Twenty-one students from 14 countries (*), who are provided the scholarship by the Sasakawa Peace Foundation and study at The World Maritime University took the special lecture at “K” Line Training Center in Tokyo, on May 19, 2016 in conjunction with the Sasakawa Peace Foundation for the purpose of deep understanding about maritime industry in Japan.

The world Maritime University (WMU) is a postgraduate maritime university founded by the International Maritime Organization (IMO), a specialized agency of the United Nations and established in Malmö, Sweden in 1983. Mainly its objective is to provide the advanced and professional maritime knowledge for the maritime personnel. The associated maritime organizations in Japan, such as The Nippon Foundation, The Sasakawa Peace Foundation (The Ocean Policy Research Institute), etc. have invited the said scholarship students mainly from Asia Pacific region to Japan every year as a part of scholarship program. This time, invited students paid their courtesy visit to relevant authority and organizations, visited the maritime associated facilities and enjoyed cultural heritages during their stay in Japan, besides taking the lecture at “K” Line Training Center,.

The students arriving at “K” Line Training Center were firstly given the welcome speech by Captain Eiji Kadono, Senior Managing Executive Officer responsible for Marine Sector, Technical and Environmental Affairs (including Fuel Cost Control) Unit, and subsequently received the lectures about the various topics such as brief history of “K” Line, the outline of our business, the role of maritime industry in Japan, Japan’s position in the global maritime industry, and “K” Line’s education system for seafarers. After the lecture, they experienced the ship handling simulator and LNG tanker simulator with the demonstration by the deck and engine instructors of “K” Line Training Center.

During the students question and answer session, some asked incisive questions about our business or shipping business in Japan, the other asked the origin of ship’s name, the various fields of Q and A were actively exchanged the whole time. We believe that they develop a better understanding not only about us but also shipping business widely.

“K” Line will continue to contribute to improve maritime education and enlightenment through such workshop or facility tour based on our knowledge in maritime technology and safe navigation inherited in its long history.

Ends

* Students are from: Bangladesh, Benin, Cambodia, Egypt, Indonesia, Japan, Jordan, Kenya, Morocco, Peru, Philippines, Sudan, Thailand, Vietnam (alphabetical order)

“K” Line has established a joint venture company owning Malaysian-flag panamax vessel with Halim Mazmin Group(HMG) in order to participate in a tender for long-term contract with TNB Fuel Services Sdn Bhd(TNBF), and a subsidiary company of HMG has signed one long-term consecutive voyage charter contract with TNBF. TNBF has signed five long-term contracts with four Malaysian Shipping Companies in this tender.

The co-owned panamax vessel will transport 1.5 million　ton of steaming coal per year from Indonesia or South Africa or Australia to Malaysia consecutively for 10 years from September of 2016.

Tenaga Nasional Berhad(TNB) is the largest power utility company in Malaysia and has its total generating capacity of about 11,000 mW which is one of the largest generation capacity in South-East Asia. TNBF is a subsidiary of TNB and supplies coal and fuel to the TNB Generation. HMG is a group of companies operating ship owning, flight training academy, maritime university and tourism established by Tan Sri Halim Mohammad.

Under the medium-term management plan “”K” Value for our Next Century – Action for Future – ”,  “K” Line is expanding its business for achieving consistent growth by securing long-term contracts.

Kawasaki Kisen Kaisha, Ltd.（ “K” Line）achieved 13.6% reduction in CO₂ emissions^*1 in 2015 against 2011 level, as a result of deployment of larger vessels, proactive initiatives for introducing advanced energy-saving technologies including electronically controlled engines, as well as slow steaming being continuously pursed through close cooperation at sea and on land with ship owners, vessels and ship management companies.

Therefore, we successfully accomplished ahead of schedule the CO₂ emission reductions target by 10% for 2019 against 2011 level, which is one of our interim milestones by 2019, the 100^th anniversary year of our foundation, under “K” Line Environmental Vision 2050 ～Securing Blue Seas for Tomorrow～^*2  as a long-term objective toward 2050 established in March 2015.

In light of this achievement, “K” Line set a new CO₂ Emission reduction by 25% for 2030 against 2011 level in the process of CO₂ emission by half for 2050 under the Vision.

Towards the new target, we are pursuing further CO2 emission reductions through both hardware side such as deployment of energy-saving vessels, continued review on energy diversification including LNG-fueled vessels as well as adoption of energy-saving technologies to be retrofitted on existing vessels, and software side to enhance efficient operation by use of big data obtained timely from vessels and the operational management for ballast navigation and anchorage under energy management system which is now being introduced for thorough marine energy saving.

As a world–leading marine transport operator, “K” Line continues to aim at providing more environmentally and efficient transportation services for more people all over the world.

*1 Per ton-mile basis is an index for transporting one ton of cargo one nautical mile (1,852 meters).

*2 “K” Line Environmental Vision 2050

http://www.kline.co.jp/en/csr/environment/index.html

Kawasaki Kisen Kaisha, Ltd. (“K” Line) announces that Moody’s has downgraded the issuer rating of the company from “Ba2” to “Ba3”, effective from May 6, 2016.

Although we have continued constructive discussions with Moody’s based on a cyclical nature of shipping industry, it was regretful that downgrade implementation has been taken.  Based on nonecessity of continuous rating obtainment from business (operation) perspective, today, we have withdrawn issuer rating from Moody’s. Nevertheless, we will continue to keep our ratings from Japan Credit Rating Agency, Ltd and Rating and Investment Information, Inc.

http://www.kline.co.jp/en/ir/stock/rating/index.html

We hope our ratings to improve as we run our business steadily based on our Medium term Management Plan, released on April 28, 2016.

Hanjin, Hapag-Lloyd, “K”Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Yang Ming have agreed to create a new alliance covering all East-West trade lanes namely, Asia-Europe/ Mediterranean, Asia-North America West Coast, Asia-North America East Coast, Transatlantic and Asia-Middle East / Persian Gulf / Red Sea. A binding agreement has been concluded by all partners and “THE Alliance” is scheduled to begin operation in April 2017 subject to approval of all relevant regulatory authorities. The initial term of the cooperation will be five years.

The new partnership will build one of the leading networks in the container shipping industry combining approximately 3.5 million TEU or 18% share of the global container fleet capacity. All six partners operate advanced and competitive fleets with more than 620 ships in total. This will become the basis of a dedicated fleet deployed into the groups’ future service portfolio. Clients will be able to enjoy an outstanding product characterized by fast transit times, high frequency sailings and expansive port coverage.

On going discussions between Hapag-Lloyd and UASC are progressing according to plan, although an agreement on business combination has not yet been reached and will in any event be subject to regulatory approvals. It is anticipated that UASC will become part of THE Alliance, which will increase the overall alliance capacity to more than 4 million TEU.

“This agreement is a milestone and will enable the six partners of THE Alliance to offer sailing frequencies and direct coverage in the market,” member carriers said in a statement. “The unique product will feature enhanced port coverage in Asia, North America, Europe including the Mediterranean as well as Middle East. The network of THE Alliance will ensure frequent sailings, high reliability and very attractive transit times for all shippers in the East-West trade lanes.“

More details on the services and port rotations will be published when all necessary preparations are finalized.