Iino Kaiun - Company History

The company started where the navy was. In July 1899 Iino Torakichi began a towboat coaling business at Maizuru, the Kyoto-side port where the Imperial Navy opened a base that same year, and steady demand for bunker coal carried the firm from a sole proprietorship to Iino Shoji in 1918 and a separate shipping arm, Iino Kisen, in 1922. Then the navy switched its ships from coal to heavy oil, and the business followed the fuel. In February 1929 the company put into service the tanker Daiichi Takatori Maru (1,266 dwt) at a time when Japan had almost no tanker-building record and oil still moved largely in cans and drums; by August 1931 the first Fujisan Maru (13,586 dwt, 18 knots) was among the largest tankers under the Japanese flag. In two and a half years a coal hauler had become an ocean carrier of liquid cargo.

War took all of it. The trading and shipping companies were merged in March 1941, the fleet was placed under state control in April 1942 with twenty-five wartime standard tankers allocated to it, and by the time the name Iino Kaiun was adopted in April 1944 the pre-war fleet had essentially been sunk. The base of the business — supplying the navy — vanished with the navy. In 1946 the head office moved from Maizuru, a garrison town with nothing left to serve, to Tokyo, where the traders, banks and shippers were; Bahrain crude runs resumed from 1948, and a Tokyo Stock Exchange listing in May 1949, followed by five more exchanges by 1952, opened a channel to fund new ships.

The second business began in August 1955, when Iino bought the property firm Chiyoda Tochi Tatemono, later renamed Iino Real Estate. In October 1960 the first Iino Building — nine storeys above ground and four below, with the 500-seat Iino Hall — opened at Uchisaiwaicho and became the head office. The logic was that ships and buildings earn in opposite ways: freight rates swing with the world economy and the oil price, while a lease pays the same amount every month for as long as it runs. Adding LPG carriers and oil retailing in 1963 widened the liquid cargoes; by then the three-layer structure of crude, gas and rent was already visible.

In March 1964 the Ministry of Transport’s consolidation programme reduced Japanese shipping to six core groups in exchange for subsidised interest on Development Bank loans. Iino separated its liner division into a newly formed company, which merged into Kawasaki Kisen the following month. It was a deliberate contraction: with containerisation imminent, Iino had no prospect of carrying the tonnage needed to compete on liner routes, and so it withdrew to tankers and specialised bulk — cargoes that do not compete with the container box. Ranked below the six core lines forever after, it was also insulated from the collapses that would hit them, and the identity that lasted the next sixty years was fixed here.

Through the turn of the 1970s Iino built VLCCs into the double-digit growth of Japanese crude imports and extended into deep-sea dry bulk, founding a US coal-shipping company in 1972. Then the October 1973 oil shock destroyed the market it had just committed to: VLCC rates that had run above Worldscale 400 fell to 80 by January 1974 and to 35 by 1976, and the Iranian revolution of 1979 stopped the recovery. Laid-up tonnage and chronic fleet cuts followed for the better part of a decade, and an independent without the reserves of the core six felt it directly.

The response was to separate the functions and change the cargo. Ship management was spun out into Iino Marine Service in 1974, brokerage and marine supplies into another subsidiary in 1979, leaving the parent to concentrate on deploying ships. More important, through the 1980s Iino moved into chemical tankers — vessels with segregated tanks carrying methanol, aromatics and vegetable oils at once, where earnings depend on long-term volume contracts with chemical makers and on operating know-how rather than on a single spot rate. The company built a leading share of Middle East to Far East and Europe petrochemical traffic, and the one-legged dependence on crude was over.

Joining the Qatari LNG project in 1993, after Indonesia in 1991, bought something the spot market cannot sell: time. An LNG carrier costs more to build than a crude tanker of similar size and is customarily employed on twenty-year charters, so earnings are set for two decades rather than repriced every few months. Iino took shares in vessels rather than owning them outright — long contracts sized to its own balance sheet. A first double-hull tanker was delivered in 1999, ahead of the regulation, participation in a giant Saudi methanol project followed in 2001, and by 2003 the group was managing LNG tonnage under contract.

The property leg grew alongside. A photo-studio rental business was established in 1997, Iino Real Estate was merged into the parent in October 1997 so that buildings sat directly on the shipping company’s balance sheet, and a second studio opened in Minami-Aoyama in 2002. Rent from Uchisaiwaicho never stopped, whatever freight rates did — which was the point.

The 2008 crisis tested the arrangement hard. The Baltic Dry Index fell almost 95%, from a peak of 11,793 in May 2008 to 663 that December, and crude, chemical and dry-bulk rates collapsed together. Recurring profit fell from ¥11.2bn in the year to March 2009 to ¥2.2bn, then ¥1.0bn, and the year to March 2012 produced a recurring loss and a net loss of ¥4.3bn as long-term charter hire on ships ordered in the boom turned into a fixed burden. The core six announced fleet cuts and redundancies; the independent leaned on its rent. The lesson management drew was explicit — one wheel must be able to keep turning when the other stops.

The new Iino Building — twenty-seven storeys, five basement levels, about 104,000 m² — opened at Uchisaiwaicho in October 2011 and took back the head office. In November it became the first office in Japan to win LEED Platinum certification, which is what let it charge above the central Tokyo average. The arithmetic that followed made the company’s shape plain: in the year to March 2015, property earned an operating margin of 35% against shipping’s 4%, so a segment supplying a tenth of revenue produced most of the profit. The medium-term plan adopted in 2014 used that cushion to restructure the fleet — expanding chemical and gas carriers, shrinking dry bulk, and being selective about crude tankers.

From 2020 the property business went abroad — an office building in London that March, development projects in Portland and near Dallas in 2022, a second London building on the Strand in March 2024 — funded deliberately while shipping was earning well. And shipping earned very well: pandemic-era logistics disruption and then the rerouting of crude, LNG and LPG after February 2022 lengthened voyages and lifted rates, producing a record year to March 2023 with revenue of ¥141.3bn and net profit of $178.1M (¥23bn), roughly matched the following year.

The fleet strategy is now written in fuels. In February 2024 Iino delivered GAS INNOVATOR (17,945 dwt), the world’s first ammonia carrier designed under an ABS approval in principle for ammonia-fuelled conversion, on time charter to Mitsui & Co.; a methanol dual-fuel vessel had come in 2019, an LPG dual-fuel VLGC in 2022, and a rotor sail was fitted to a gas carrier in November 2024. Being small enough to move first, and steady enough — thanks to the rent — to invest through a downturn, is the whole argument. The plan adopted in May 2026 rebuilds the portfolio around ammonia, methanol and LNG dual-fuel tonnage and around two property bases, domestic and overseas; the payout ratio was lifted from 30% to 40%. A towboat operator that once carried coal for the navy now bets on the ships that will carry the fuels replacing oil.