MOL Denies Container Spinoff

Japanese carrier MOL has refuted a report by Reuters that it is considering “spinning off” it container division.

It said the report, which was carried in The Journal of Commerce Online Monday, was a result of a misinterpretation of remarks made by MOL Financial Director Kenichi Yonetani in an interview with Reuters.

MOL said today it is not considering spinning off its liner division and it has no plans to quit the container business.

It said Yonetani did say the container business had been hardest hit “due to unprofitable rates and sagging volumes.” He also admitted that he expects overcapacity in the container market to continue for several years.

But he explained that "only diversified shipping lines which provide a wide range of services including bulkers and containers will be able to survive” and that although MOL’s spinning off its container shipping division was one option, the benefit of doing so at this time would be small because of the industry's huge overcapacity.

“Obviously, with the current downturn in the global economy and oversupply of capacity in the shipping market, being a responsible company, MOL continues to review every alternative to improve its profitability,” the carrier said in its statement.

“However, as MOL’s CFO actually said, it considers that the option of a ‘spin off’ is not a choice under the current circumstances.”

Contact Peter T. Leach at pleach@joc.com.