Lauritzen Bulkers A/S (LB), a global industrial carrier and ship owner, based in Copenhagen, has been building up a large fleet of geared bulk carriers over the past 20 years.
Back in 1995, the total fleet totalled as little as 25/30 units, and today, LB is operating a fleet of about 100 units primarily within the two segments of the dry bulk industry, the biggest concentration of geared vessels being Handysize and Handymax.
The fact that the ships are equipped with cranes gives the ship owners a large amount of flexibility, and the scale of the value-adding transport service becomes even more evident.
Over the past five years, LB has made a wide-ranging strategic transition of its operations on the back of geared bulk carriers with the aim of becoming a global service provider of dry bulk transportation, without losing its strong local focus. Business activities have grown significantly and LB’s operations have almost doubled, just since 2005.
modern, young and versatile geared bulk carriers which can adapt to basically any trade, commodity or special customer request, and call on many of the less developed ports in the world. The ability to perform self-loading or self-discharging operations adds value to the service which cannot be copycatted in the larger segments of the dry bulk business.
For Lauritzen Bulkers A/S, the cranes on board the ships are considered a means of optimizing the overall transport service provided to the customers, as well as to the ports and terminals Vessels’ grabs are often used to trim the cargo in ports where the shore loading installation has limited flexibility. The alternative, trimming with machines/payloaders in the cargo holds, is considerably slower and much more costly, thus this extra service adds value to all parties involved in the supply chain.
In some ports they even perform so-called synchronic discharge operations where shore cranes are used to discharge parts of the cargo to shore facilities and at the same time, vessel’s cranes and grabs, operated by vessel’s crew, are being used to discharge cargo into barges alongside the vessel. This is an extremely time- and cost-saving operation.
By using geared ships, customers can allow themselves to use less-developed ports/terminals and, at the same time, port authorities can save money by not having to invest in expensive shore cranes and run costly maintenance programmes as well — a win-win situation for all parties involved.
When looking at the dry bulk market in general, it is evident that some trades have been developed up around geared
tonnage — such as cement/clinkers to various ports in West Africa, and coal to India, etc. It is very unlikely that this tendency will change over time.
All kinds of features/equipment can be connected to the hooks of the geared bulk carriers in order to maximize effectiveness and flexibility. Examples include:
Hence, the complexity and the diversity is huge when it comes to the use of geared vessels, and these types of units will be able to justify their own existence going forward.
Dampskibsselskabet NORDEN A/S is an independent shipping company incorporated in Denmark and listed on NASDAQ OMX Copenhagen A/S as a part of the OMXC20 index. The market capitalization at 12 May 2011 was DKK 7.8 billion.
NORDEN was founded in 1871, making it one of Denmark’s oldest internationally operating shipping companies. NORDEN operates in dry cargo and tankers worldwide.
The management focus is long term and is based on NORDEN’s vision, mission and values. The goal is for NORDEN to continuesly develop for the benefit of its stakeholders and to achieve stable, reasonable earnings.
STATISTICS
Fleet and employees
Active vessels total:
| 185 |
Dry cargo vessels (excluding single trip chartered vessels):
| 147 |
| Tanker vessels: | 38 |
| On order total: | 35 |
Dry cargo newbuildings:
| 28 |
| Tanker newbuildings: | 7 |
Employees — offices:
| 270 |
Employees — at sea:
| 810
|
FLEET
NORDEN’s fleet is among the most modern and competitive in the industry and NORDEN operates a mix of owned and chartered tonnage in total 184 dry cargo (excluding single trip chartered vessels) and tanker vessels. In addition NORDEN has a newbuilding programme (dry cargo 29, tanker 7).
Dry cargo fleet
Active vessels total: 147 (excluding single trip chartered vessels)
Capesize: 4
Post-Panamax: 7
Panamax: 55
Handymax: 62
Handysize: 19
On order: 28
Tanker fleet
Active vessels total: 38
LR1: 0
MR: 19
Handysize: 19
DRY CARGOIn dry cargo, NORDEN is active in all major vessel types. It is renowned for its experience in operating geared bulk vessels. The company is one of the world’s largest operators of Handymax and Panamax dry cargo vessels and has growing activities in the Handysize, Post-Panamax and Capesize vessel also enhance the company’s strategic prospects beyond this period. The strategy plan aims to ensure long-term growth for NORDEN under various market conditions and also focuses on a financially strong shipping company’s options in cyclical markets.
In terms of dry cargo, NORDEN strives to be the first choice for large, well-established cargo owners, and it therefore aims to increase its market share with mining and commodity companies, energy producers, construction groups, commodity-intensive industries, etc. There will be a consistent focus on concluding
types. NORDENs Handysize and Post-Panamax activities are operated commercially by NORDEN Handysize Pool and NORDEN Post-Panamax Pool, respectively, which also operate vessels from Interorient Navigation Company Ltd. (INC), Cyprus. In total, the company operates a total of 146 dry cargo vessels.
Dry cargo expansion plans 2011–2013
Based on NORDEN’s vision, the strategy plan Long-term Growth in Challenging Times defines a number of growth and earnings targets for the years 2011–13 and launches initiatives which will new COAs (contracts of affreightment) to produce average annual growth of 15% in both transported cargo and contractually secured cargo. This will also allow NORDEN to create new activity as operator in connection with the routes in the cargo programme.
NORDEN aims to be among the global market leaders in Post-Panamax, Panamax, Supramax/Handymax and Handysize vessels types and active in the Capesize vessel type.
The company also aims to enter into more joint ventures and strategic partnerships, for example sharing cargoes and vessels with selected customers. A growing number of customers have a strategic interest in participating in transports, and by virtue of its values, financial strength and long-term focus, NORDEN holds a strong position towards such customers.
A core fleet expansion will boost NORDEN’s presence in the market. It will continue to expand the cost-efficient and modern core fleet through new-buildings, long-time charters and acquisitions. At the same time, it plans to optimize its order book, for example by selling vessels with a view to reinvesting in tonnage with better specifications and for later delivery.
Geared bulk carriersNORDEN’s geared bulk carriers are an important part of this expansion strategy, as they offer inherent flexibility that allows them to load or discharge cargo in ports without shore-based equipment. This gives geared bulkers flexibility in the cargoes they can carry and the routes they can travel. All of the
company’s geared bulk carriers were built as such, so are not conversions from vessels originally designed for other roles. Crew members on board NORDEN’s geared carriers have the skills and experience to use the equipment, and onboard engineers also have experience in the maintenance and repair of deck cranes.
NORDEN’s geared bulk carriers are typically fitted with four 30 metric tonne electro-hydraulic deck cranes, and four electro-hydraulic 10/12m3 grabs. The company prefers to source its deck cranes from manufacturers in Japan. Indeed, it is heavily involved in the selection of all ship’s equipment for its newbuildings. It does this by negotiating — with the shipyard — the equipment suppliers to be included in the makers’ list.
OFFICES AROUND THE WORLD
NORDEN has its head office in Hellerup, north of Copenhagen in Denmark, which has 206 employees including site offices, as well as offices in: Singapore (28); Shanghai, China (14); Annapolis, USA (16); Rio de Janeiro, Brazil (2); and Mumbai, India (4). At its offices NORDEN has in total 270 employees and about 810 are employed on the company’s owned vessels.
SHIPPING CREDENTIALS
NORDEN was a founding member of the Danish Shipowners’ Association in 1884 and has remained a member since that time. Furthermore NORDEN is a member of international organizations Intertanko (The International Association of Independent Tanker Owners) and BIMCO (The Baltic and International
Maritime Council), as well as ICC Denmark (International Chamber of
Commerce).
INTERIM REPORT — FIRST HALF OF 2011 & CEO FILM
Highlights from the latest interim report include:
- Results in the first half-year were slightly ahead of
expectations due to a stronger than expected performance by the tanker
department. The dry cargo department performed in line with
expectations. Excluding non-recurring income, operating earnings
(EBITDA) in the second quarter were 8% higher than for the first quarter
of 2011.
- EBITDA in dry cargo was US$32 million in the second quarter, whereas EBITDA in tankers was US$12 million.
- For the second quarter, EBITDA was US$40 million compared with US$100
million last year, which included non- recurring income of US$41
million. Operating earnings for the first half of the year were US$88
million against US$179 million in the first half-year of 2010.
- For the second quarter, the profit from operations (EBIT) was US$21
million (US$86 million). Profit for the period was US$10 million (US$83
million) after negative fair value adjustments of certain hedging
instruments of US$11 million.
- In the first half-year, NORDEN gained market shares in dry cargo with 40% growth in transported volumes compared with the same period last year. In comparison, estimated market growth was 5–6% (R.S. Platou), and at the same time, COAs of 35mt of forward cargo have been secured.y Theoretical net asset value was DKK 246 per share against DKK 275 per share at the end of first quarter. This development is due to change in the US$/DKK rate and decreased market value of vessels.
- During the second quarter, the dry cargo department increased coverage for 2011 to 94%, and therefore only has 1,317 open ship days for the rest of the year. In tankers, coverage for 2011 remained unchanged from the first quarter. y NORDEN maintains its expectations of an EBITDA of US$135–175 million and an EBIT of US$55–95 million. President and CEO Carsten Mortensen has commented, “I am satisfied that, despite very tough conditions, we performed a little better in the first half-year than expected. I am especially pleased with tankers’ nice contribution to NORDEN’s bottom line and with the fact that the new strategy is well under way with the creation of significant and solid growth in cargo volumes in dry cargo.”
Emarat Maritime embarks on ambitious newbuilding programme
Emarat Maritime LLC (EML) is the largest Dubai-based privately Arab owned shipping company.
The company was established in early 1990 when it acquired its first vessel, Dubai Pioneer – a 1963 built ‘tween-decker’ of about 13,500dwt. EML consolidated its position in the agri- products trade between Sub-Continent/Red Sea/South East Asia with owned and operated tonnage. At the height of this operation (1993/1994), the company controlled 16 vessels (four owned and 12 commercially managed vessels) of between 5,000– 22,000dwt. With the decline in the agri-product trade during the second half of 1990, the company turned its focus towards the dry bulk markets acquiring its first bulk carrier in 2001.
Today EML operates a fleet of 12 vessels comprising eight bulk carriers and four tankers. EML is renowned globally for its young and well-maintained fleet with an average age of 5.8 years, providing high quality sea-transportation services for a number of industries. EML has embarked on an ambitious investment programme to meet growing demands with a new building programme comprising three Super Handymax bulk carriers, three Capesize bulk carriers and three Aframax tankers currently on order. In the next three years, there will be a considerable growth in the existing EML fleet size. From humble beginnings through turbulent times, EML can look back on a long and storied history with an experience of ongoing success.
With a well maintained fleet, EML’s vessels have been able to achieve record outputs in loading/discharging of bulk commodities at various ports. The vessels have maintained excellent ratings with organizations like ‘RightShip’ and therefore, charterers/traders seldom face any difficulty in getting the vessels approved by the terminals/shippers.With a professional team and versatile approach, EML has become an established name amongst the shipping fraternity. In spite of a low freight market, long tonne miles and port congestion, the company’s dry bulk loaded about 3.8mt (million tonnes) of bulk cargo in the year 2010. In the first half of 2011 this figure has reached 1.5mt and EML estimates that this figure will exceed 3mt by the end of the year, even in this hard hit low freight market with low volumes of cargo. EML mainly operates on a spot basis, either on time charter trips or voyage charter.
The company has four electro- hydraulic cranes on all of its bulk carriers. On Dubai Faith, the cranes have a 25 metric tonne rating, and a 22m working radius. The other vessels have a rating of 30 metric tonnes, and a working radius of 26m. Nearly all of the cranes are manufactured by IHI Corporation in Japan, with the exception of Dubai Ambassador and Dubai Faith, the cranes for which have been manufactured by Fukushima in Japan.
All vessels have four double-scoop 12m3 grab buckets, except Dubai Faith which has 10m3 grabs. Nearly all of the vessels’ grabs are made by SMAG GmbH, except Dubai Sun which has radio remote controlled electro-hydraulic grabs from Guven Grabs in Turkey. All the SMAG grabs are electro-hydraulic, with wired remote control.
So far, EML has not converted any vessels to geared bulkers.
The company’s operations are based strictly in compliance with social norms and shipping ethics. The company strives to maximize its contribution to society through its intrinsic business activities while shipping the cargo entrusted to it by its customers to its destinations in a reliable, safe and speedy manner without any environmental impact. Various social, economic and market conditions and trends that affect shipping markets are monitored continuously enabling the company to establish an optimum governance frame-work whilst always adhering to regulatory requirements, corporate social responsibility and changes in the socio-economic and business environments.
Global warming is of vital concern in today’s world and since vessels rely on fuel, emissions of CO2 are unavoidable. EML’s efforts to promote fuel conservation are aimed at reducing greenhouse gas emissions by installing MariNox on all its vessels and also by adopting the new concepts of the ‘Flipper Fins’ and the wind/water resistance reducing ‘seaworthy bow’ which has been proven to demonstrate unmatched increase in the vessel speed and fuel efficiency. EML has also gone one step further by voluntarily subscribing for the EA (Environmental Awareness) notation and its new building Dubai Sun, which was delivered in April 2010, is the first vessel in the world to be certified for EA Notation by class NKK and was awarded the Bulk Ship of the Year 2010 due to its safety environmental protection. These and many other environmentally friendly adaptations have been implemented across the EML fleet including the newbuildings.
Aiming for optimum customer satisfaction, EML has developed new designs in shipbuilding which allow its vessels to increase the cargo intake as compared to a vessel of the conventional design. This has also helped in reducing CO2 footprint and saving fuel. In these treacherous market conditions that the industry has been experiencing since late 2008, EML fleet vessels have been enjoying an edge above others while sustaining business and making profits.
EML is a member of a number of International Trade or Shipping related Organizations such as BIMCO,The Baltic Exchange, INTERTANKO and INTERCARGO and The International Chamber of Commerce – International Maritime Bureau (ICC-IMB), and plays an active role in terms of finding solutions to the various problems faced by the industry.
EML’S MISSIONEML’s mission is to serve global trade ceaselessly and efficiently by contributing towards global economic growth and development and always striving to conserve energy, protect people and preserve the environment.
EML’S OBJECTIVES
1. Comply with all applicable laws and regulations and International standards. Where existing laws and rules are not adequate to assure protection of health, safety and environment, EML will establish its own HSSE (Health, Safety, Social, and Environmental) standards to meet or exceed the best industry practices.
2. Provide a framework for evaluating health, safety, security and environmental aspects and impacts for setting objectives and targets. Continuously monitor and review the company's HSSE performance against set standards by way of key performance indicators, audit and evaluation, findings from which shall be implemented for continued improvement.
3. Identify, assess, effectively minimize and control all risks pertaining to health and safety of company employees and contractors.
4. Provide a secure working atmosphere with safeguards for protecting people, environment, property and EML’s management operations against risk of injury, loss or damage from criminal, hostile or terrorist acts.
5. Protect the environment by adopting and implementing effective pollution prevention measures reflected in the reduction of emissions, production of waste and use of energy and water.
6. Ensure emergency preparedness, both ashore and at sea with effective contingency plans.
7. Ensure that incidents, accidents or unsafe conditions are reported immediately.
8. Educate and train its personnel so as to improve their health, safety, security, environmental and quality assurance awareness and skills.
CORPORATE SOCIAL RESPONSIBILITYIn 2005, EML implemented a policy whereby the company would contribute back to society and the maritime industry by providing a new career stream to young aspiring UAE nationals who would like to take up seafaring as a career.
This has now been extended to cover other GCC countries also. EML has launched a fully paid Deck Cadet Sponsorship programme which includes overseas education and training for the career aspirants culminating in certification from a choice of the United Kingdom or New Zealand. The company guarantees jobs to these young men upon completion of their training. Emarat Maritime LLC remains committed as a team to help prepare the shipping industry evolve as a survivor today and a leader tomorrow.
EML is realizing the dream of ‘Safe Ships, Green Seas’.