NORDEN remains in a strong position in a historically challenging market

With 24 years of experience in the shipping industry, Ejner Bonderup has taken up the position as head of NORDEN’s largest business area, dry cargo, at a point where the global dry cargo market is struggling with historically low rates and too many new ships in the sea. But that does not intimidate him. NORDEN is in a strong position to deal with the challenges — this is due to the company’s strategy and values as well as the significant cash balance, says Bonderup.

The new head of NORDEN’s Dry Cargo Department, Executive Vice President Ejner Bonderup, has no doubt about how NORDEN will benefit the most from the historically poor dry cargo market, where the rates in 2012 were at the lowest level since 1998, and where the number of new vessels has set new records. His formula for coping in this challenging market is to always concentrate all business-related efforts on complying with the NORDEN 2011–2013 strategy of ‘Long-term Growth in Challenging Times’. Within the dry cargo area, this focuses on growth in transported cargo volumes, growth in contractually secured cargo volumes, establishment of joint ventures and strategic alliances and the creation of added value as an operator.

At the end of 2012, NORDEN’s total active dry cargo fleet of owned and chartered vessels — with and without purchase options — totalled more than 200. The majority of the dry cargo team is positioned at the head office in Hellerup, but dry cargo employees are also positioned at NORDEN’s offices in Singapore, Shanghai in China, Mumbai in India, Rio de Janeiro in Brazil and Annapolis in the USA.


”I think NORDEN has a clear and precise strategy that has worked for us in these challenging years following the crash of Lehman Brothers in September 2008. NORDEN is well-padded and well-positioned to maintain and even improve its position in the global shipping market,” says Bonderup who, since his arrival in the fall of 2012, has spent most of his time getting to know NORDEN from scratch. He

has visited all NORDEN’s overseas offices, including the office in Shanghai which plays a special role as NORDEN’s biggest dry cargo market.

But Bonderup, who has 24 years of experience in the shipping industry, has also found time to express which managerial challenges the struggling dry cargo market gives rise to.

“As a management team, it is our job to create a good and solid foundation for a high-performing team to base their work on. This foundation will include a clear framework, clear communication combined with a good deal of information sharing, transparency when it comes to our objectives and a stable and well-functioning shipping system. If you are able to combine these things correctly, you have a good basis for achieving high performance,” he says.

EMPLOYEES: FACING CHALLENGES HEAD-ON Which challenges does such a difficult dry cargo market impose on your employees?

Bonderup replies:“When we operate in an uncertain market, where fluctuations and insufficient performance among some actors are a daily challenge, it is necessary to build up full confidence — and that goes both ways. The employees must always experience that the company and its management are backing them all the way and provides the support needed to perform well. On the other hand, the company must also be able to know that the employees execute their tasks as agreed and eliminate potential misunderstandings fast.”


Does NORDEN possess special strengths, which the company is able to draw on when the market conditions are as difficult as they are now?

”We have money in the bank, and NORDEN has always fulfilled incurred obligations. This is a strong selling point in our future search for new business. We are also able to deliver as promised tomorrow,” says Bonderup.

It is part of NORDEN’s strategy to have financial resources which enable the company to stand up to hard times, act independently of the bank and loan market and take advantage of the opportunities in a cyclical market. This is also the case in the period of financial crisis NORDEN is currently in, when external financing can be difficult to obtain.

At the close of 2012, NORDEN had cash and securities totalling US$529 million and

undrawn credit facilities of US$161 million. With these financial resources, NORDEN can carry through both already known investments as well as the planned new investment programme for 2013 without additional external financing.


How important are NORDEN’s four core values — flexibility, reliability, empathy and ambition — in the present difficult situation in the dry cargo market?

“This is a question of DNA composition. It is important that we base our business on a proper foundation, and the values are of great importance not only internally but definitely also externally. To be able to clearly indicate to all stakeholders who you are and what your focus areas are means a lot. But it does not come for free. It comes with a great obligation — both for the company and for the

individual employee. It is important that all employees take ownership of the values, and it is important that we have attuned our expectations towards each other when complying with the values. NORDEN has worked with these values for several years, and it is my impression as a newcomer in the team that the values are alive and well anchored in the organization.”


Do you think we will ever experience previous decade’s bountiful years in the dry cargo market again?

”We do not need to see a Capesize market above US$200,000 per day again to create great value for our owners. Furthermore, it is relevant to ask the question if it was in fact a healthy and balanced market back in 2006/2008. It probably was not. I do not believe that the same conditions will occur to the same extent in the near future. But the market has not lost its ability to act cyclically, and I am certain that demand will catch up with supply again,” says Bonderup.

Bonderup does believe that the shipping industry is heading for a very interesting period. “This is a time of opportunity, and we at NORDEN have the ability and the strength to evaluate and execute our next strategic steps,” he says.