Issue No. 7_ September 2007 - J. Lauritzen

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Issue No. 7_ September 2007 - J. Lauritzen Powered By Docstoc
					                                                               September 2007




A Capesize
    milestone




Half-year results · Lauritzen Kosan newbuilding programme enters into
delivery phase · Staying safe means staying alert · Vessel of the Year
2006 · Hole in one · JL exits the reefer business · A Capesize milestone ·
Goodbye to training, Hello to the real thing · It’s back to school for
experienced purchasers · Lauritzen Tankers builds in China

OCEANS OF KNOW-HOW
 4   Half-year results 2007

 5   Lauritzen Kosan newbuilding
     programme enters into delivery phase

 6   Staying safe means staying alert

 8   Vessel of the Year 2006

 9   Hole in one

10   JL exits the reefer business

13   A Capesize milestone

14   Allotment gardens - nature and leisure
     within the city limits

16   Goodbye to training, Hello to the
     real thing

18   It’s back to school for experienced
     purchasers

19   Lauritzen Tankers builds in China

20   Namegiving ceremonies
Dear Reader,                                                                              Although some organisations
The ability to handle uncertainty and change is paramount in today’s business             may continue successfully with
world with its increasing competitive pressures. The ability to cope with and             their current strategies, most
even thrive on change can thus be regarded as a major competitive advantage.              will undoubtedly need to change.
                                                                                          Of course, any change brings
The decision to sell JL’s 50% shareholding in NYKLauritzenCool, and conse-                uncertainty, and some organi-
quently to exit reefer shipping, is an excellent example. I take pride in the way it      sations are better at coping
demonstrates our ability to change. JL’s history in the reefer business (see article,     with that situation than others.
page 10) illustrates our ability to constantly seek new opportunities through
innovation, market development, and flexibility – and to continuously respond
to changing market conditions.

It is, of course, emotional to leave the fascinating reefer industry together with
all our trustworthy customers and dedicated colleagues worldwide. We wish all
our friends in the reefer industry good luck and thank them for the trust they
have shown us during many years. However, our exit from the reefer business
will open new opportunities for JL.

I find it fair to state that the ability to cope with change is built into the culture,
organisation, and management style of JL. I am very pleased with that. But there
is always a risk that complacency might be lurking around the corner. Therefore,
we constantly have to sharpen our skills and competencies and thus our ability
to continuously change.

During the last couple of months, other major changes have occurred. Lauritzen
Bulkers has ordered no less than four Capesize bulk carriers, manifesting its presence
in this segment of the bulk market. The Capes are the biggest vessels ever ordered
by JL. During the summer, Lauritzen Tankers ordered six additional product tan-                               Torben Janholt,
kers, another sign of our continuous fleet build-up in the MR product tanker market.                      President and CEO
With 50 owned and time-chartered vessels on order, JL has the biggest new-
building portfolio ever recorded. Furthermore, partners will add 15 additional
newbuildings to the JL-managed fleet.

I am pleased to report that JL’s result for the first six months of 2007 was
USD 132 million compared to USD 60 million in 2006 and thus better than
expected and very satisfactory. The outlook for the remaining part of the year
is positive, and the best ever full-year result is expected for 2007.

Sincerely,

Torben Janholt
President & CEO


                                                                                                                                3
    Very satisfactory
    half-year results 2007
    JL’s result for the first six months of        Fleet                                            and USD 140 million to Lauritzen
    2007 was USD 132 million compared              During the first six months of the year,         Tankers.
    to USD 60 million in 2006. The                 JL took delivery of two Handysize
    result is better than expected and very        bulk carriers, two MR product tankers            JL’s newbuilding commitments total
    satisfactory.                                  (one of which was sold at delivery),             about USD 1.3 billion. In addition,
                                                   and one 8,000 cbm ethylene gas carrier           JL’s investment capacity amounts to
    The improvement compared to 2006               (the first of a series of six sister vessels).   about USD 1 billion.
    was primarily driven by a substantial          Additionally, JL took delivery of four
    strengthening of the bulk market,              long-term time-chartered product                 Lauritzen Bulkers
    increasing activities within JL’s product      tankers and one Handysize bulk carrier.          The result before tax was USD 114.4
    tanker division, and gains on securi-                                                           million compared to USD 34 million
    ties. Earnings in Lauritzen Kosan and          Year-to-date, investments in 15 fully            in the same period last year. The result
    Lauritzen Reefers were better than             or part-owned vessels were approved,             is considerably better than expected.
    expected but lower than last year due          as were divestments in five vessels and
    to lower profit from sale of vessels and       other assets.                                    Towards the end of the first half of
    for Lauritzen Kosan particularly due                                                            2007, Lauritzen Bulkers ordered
    to the sale of the small gas carrier           After the exit from the reefer business,         four Capesize bulk carriers, further
    activity towards the end of 2006.              JL controls a combined fleet of about            strengthening its presence in this
                                                   130 vessels at the beginning of August           segment of the bulk market.
    The newbuilding programme further              2007. Based on current commitments,
    increased to a total of 50 vessels, includ-    a total of 65 newbuildings will be added         Lauritzen Kosan
    ing 19 vessels that will be taken on long-     to the fleet during the coming years,            During the first half of the year,
    time time-charter. Furthermore, joint          bringing the total fleet to 195 vessels.         Lauritzen Kosan realised a result
    venture partners will add another 15                                                            before tax of USD 7.2 million com-
    newbuildings to the JL-managed fleet.          Invested capital                                 pared to USD 16.9 million in the
                                                   During the first half of 2007, invested          same period last year. The result is
    During the first half of 2007, JL’s 50%        capital increased by USD 255 million             better than expected.
    shareholding in NYKLauritzenCool               compared with the same period last
    was sold to joint-venture partner NYK          year. Average invested capital was               The first of a series of innovative
    Reefers Ltd. As consequence of the             USD 695 million, of which USD 291                8,000 cbm ethylene gas carriers was
    transaction, JL will leave the reefer          million relates to Lauritzen Bulkers,            delivered in May. A further nine iden-
    market (see article on page 10).               USD 265 million to Lauritzen Kosan,              tical vessels will be delivered during



     Invested capital (average) 1H USDm              Key figures                                         1st Half            Total Year
      800                                                                                       2007              2006             2006
                                                     (USD million)                            Actual            Actual          Actual
      600
                                                     Lauritzen Bulkers                         114,4               34,0             93,4
                                                     Lauritzen Kosan                              7,2             16,9              38,3
      400
                                                     Lauritzen Tankers                          13,6                1,6              3,8
                                                     Lauritzen Reefers                            9,9              16,2             13,2
      200
                                                     Landbased activities                        (0,2)             (1,2)            (3,7)
        0
                                                     Other                                       (7,6)             (1,3)            (8,7)
                                                     Result before tax                         137,3               66,2           136,3
              Bulk      Gas   Tank   Reefer   JL
                                                     Tax and minorities                          (5,8)             (6,3)           (11,9)
       2006          2007
                                                     Net result                                131,5               59,9           124,4
                                                     Cash and securities                        10,3             104,4              48,6
                                                     Long-term debt, total                      44,8               68,1             49,9
                                                     Equity (excl. min.)                       782,3             614,4            679,8
                                                     Total assets                              991,8             755,9            929,7


4
the coming years, five of them owned       Key figures
by Lauritzen Kosan and four by joint-      Return on invested capital for the first     Lauritzen Kosan
venture partners.                          six months of 2007 was 34.5% com-
                                           pared to 27.7% in the same period in         newbuilding
Lauritzen Tankers                          2006.
The result before tax was USD 13.6                                                      programme
million compared to USD 1.6 million        Return on equity was 37.7% compared
in the same period in 2006. The result     to 19.6% in the same period in 2006.         enters into
is better than expected.
                                           Solvency was 78.9% compared to               delivery phase.
During the summer, Lauritzen Tankers       81.3% last year.
ordered six additional products tankers,                                                Past issues of this magazine have pro-
further strengthening the fleet build-up   Outlook                                      vided progress reports on Laurtizen
in the MR product tanker market.           Due to the continued strong global           Kosan’s extensive newbuilding project
Lauritzen Tankers’ newbuilding pro-        economy and the overall positive out-        of ten ethylene gas carriers being built
gramme comprises 12 owned and time-        look for JL’s business activities, the net   at INP shipyard in Ulsan, Korea. The
chartered vessels.                         result for 2007 is expected to be sub-       first of these, the Isabella Kosan, was
                                           stantially higher than earlier estimated     delivered on 31 May. After extensive
Lauritzen Reefers                          and the best in the history of JL.           sea and gas trials, she sailed from
The result before tax was USD 9.9                                                       Korea to Iran to load her first cargo.
million compared to USD 16.2 mil-                                                       “All the tests went very well,” says
lion in the same period in 2006. The                                                    Jan Kastrup-Nielsen, president of
result is in line with expectations.                                                    Lauritzen Kosan, “which is as we
                                                                                        expected. But when you’ve spent so
In connection with the 50% sale of                                                      long reviewing diagrams and drawings,
NYKLauritzenCool, JL’s portfolio                                                        it’s always a relief when a cargo is
of time-chartered reefer vessels was                                                    actually loaded.” The next ship in
transferred to NYKCool AB. Four                                                         the series, the Helena Kosan, is due
reefer vessels will, however, remain                                                    to be delivered early September. All
on bareboat charter to Lauritzen                                                        ten of the vessels are scheduled to be
Reefers and be commercially operated                                                    completed and delivered by 2009.
by NYKCool



  Total fleet (August 2007)

  Owned                             34
  Part-owned                        14
  T/C                               39
  Pool                              28
  Joint charters                    12
  Comm. mngt.                        4
  Total                            131
  N/B (own)                         31
  N/B (T/C)                         19
  N/B (partners)                    15




                                                                                                                                   5
    Staying sa
    means stay
    “Our onboard ship management is tight,
    and our crews are fully confident with
    what it takes to stay safe – and that’s
    what matters”
    Tommy Thomassen
    Senior Vice President, Head of Lauritzen Fleet Management




    How J. Lauritzen ships avoid modern-day pirates,
    terrorists, and run-of-the-mill bad guys.
    If you have recently enjoyed a couple of   J. Lauritzen vessels have been attacked,     Awareness and discipline
    hours in a dark theatre happily eating     a Danish vessel, the Danica White, was       Large commercial vessels can’t do much
    popcorn and watching Pirates of the        hijacked in June, 210 nautical miles         to protect themselves. They are too
    Caribbean, you can be excused for          off the Somalian coast.                      slow to outrun the pirates, and most
    thinking of piracy as a threat from the                                                 shipping companies do not allow
    past. In fact, it is a danger that never   International naval forces do attempt        ships’ crews to be armed. When asked
    entirely disappeared and one that is       to protect shipping in this area –           to explain J. Lauritzen’s 100% success
    making an impressive comeback off          because of Middle East oil production        rate in modern time at avoiding this
    the west coast of Africa, in some of the   it attracts heavy traffic – but the size     danger, Tommy Thomassen, senior
    same waters where the Barbary pirates      of the territory to be patrolled gives       vice president and head of Lauritzen
    of centuries past preyed on shipping       the pirates an edge. Even when help          Fleet Management (LFM), gives a
    in the western Mediterranean.              is at the right spot at the right time,      disarmingly simple answer. “Our ships
                                               rescue efforts are not always successful:    play it safe,” he says. “Off Somalia, for
    21st-century pirates are often trained     the USS Carter Hall, part of a US            example, instruction is to stay at least
    and heavily armed fighters who use         task force, fired on the Danica White’s      250 nautical miles from shore. It’s a
    speedboats equipped with satellite         hijackers, but had to call off its pursuit   matter of staying alert and being disci-
    phones and Global Positioning System       after the pirates entered Somalia’s terri-   plined – observing the right security
    equipment and have the backing of land-    torial waters.                               level, posting extra guards, and always
    based militias. They are notoriously                                                    being prepared. Our onboard ship
    active off Somalia's coast. Although no                                                 management is tight, and our crews



6
fe
ying alert

are fully confident with what it takes        about how to respond – and how not         the code. “The regulations tightened
to stay safe – and that’s what matters ”      to respond – in emergency situations.      quayside security with strict visitor
Achieving a consistent level of security      Additionally, all ships undergo rigorous   rules and improved search routines for
awareness and discipline is a matter of       audits: internal LFM security reviews      stowaways and explosives,” he says, “so
training, and LFM sees that everyone          and inspections and Flag State security    they provide a layer of security against
is trained in security, in Denmark            audits. “These audits are valuable not     everything from terrorist threats to
and the Philippines and in the Baltic         only because they document that we         common criminals.” ISPS regulations
countries. There are three Company            comply with requirements, but also         also focus on the important transition
Security Officers, and each ship in the       because they help us and the shipboard     from sea to port, by requiring ships’
fleet has a specially trained Ship Security   management and crew to continue            security officer and the port security
Officer as part of the International          stay on our toes when it comes to          officer to coordinate security levels in
Ship and Port Security (ISPS) code.           security, not allowing us to slowly        a structured manner. In volatile areas
                                              doze off ” says Tommy Thomassen.           this is vitally important to ship security.
International regulation
A major part of a Security Officer’s          He also notes that the ISPS regula-
responsibility is ensuring compliance         tions were by far one of the fastest
with the ISPS code that was imple-            produced and implemented pieces of
mented in the wake of 9/11. Each              maritime regulation ever, and points
J. Lauritzen ship has an individual           out that rules covering port security
security plan, with specific guidelines       are among the most important part of



                                                                                                                                       7
    Vessel of the Year 2006
    Congratulations to the master, officers, and crew of the Tessa
    Kosan for achieving best-in-fleet inspection performance.
    The vessel received only two Ship Specific Remarks in 2006.




                                                                                     An article in the March 2006 issue
                                                                                     of this magazine reported on the
                                                                                     initial success of Lauritzen Kosan’s
                                                                                     Zero Remarks vetting programme. It
                                                                                     encourages high standards of vetting
                                                                                     inspections through monetary awards
                                                                                     to ships’ welfare accounts whenever a
                                                                                     ship posts an inspection score of 0-4
                                                                                     remarks. Successful vetting is crucial in
                                                                                     gaining business from the oil majors,
                                                                                     and it is also an opportunity to promote
                                                                                     Lauritzen Kosan as a safe and respon-
                                                                                     sible shipowner. As Klaus Grøndal,
                                                                                     vetting manager of Lauritzen Kosan,
                                                                                     puts it, “Vetting inspections are the
                                                                                     entry ticket to all our business. Not
                                                                                     doing well can have serious conse-
                                                                                     quences, as an unsuccessful inspection
    Ulrich Voss (on left), Vetting Superintendent, Lauritzen Kosan, presents award   can end up with the vessel being
    plaque to Captain Nestor Aimero.                                                 rejected by our customers, with loss of
                                                                                     goodwill and earnings as a result”. A
                                                                                     rejected vessel is required to be satis-
       “The performance of the Tessa Kosan is a                                      factorily re-inspected before it again
       good example of people pulling together to                                    may do business for the individual
       put our core values into practice.”                                           customer, which is not only costly
                                                                                     but also time-consuming.

       Klaus Grøndal                                                                 During 2006, there were a total of 86
       Vetting Manager, Lauritzen Kosan                                              inspections carried out, of which 17%
                                                                                     received zero ship-specific remarks.


8
                                           Hole in one




The average amount of money awarded        While anchored on the roads off            the reef on 2 July 2007. Minor
per inspection was increased by 75%        Newcastle, Australia, the Pasha            repairs were conducted in Newcastle
in 2006, and there were a growing          Bulker – on long-term time charter to      harbour before the Pasha Bulker was
number of USD 500 awards for a             Lauritzen Bulkers – ran aground dur-       towed for major repairs.
perfect score. The award money is          ing a major storm on 8 June 2007,
used for the benefit of the entire crew,   just off the local golf club at Nobbys     The incident caused extraordinary
both those working at the time of the      Beach. The vessel remained grounded        media attention worldwide, but for-
inspection and those who join the ship     on the beach only a few meters from        tunately neither the crew nor the
at a later date. Funds can be spent on     the greens, where it became a tourist      environment suffered any damage.
anything from video games to karaoke       attraction and certainly also a distrac-   As time-charter owners, Lauritzen
systems to sports equipment. The idea      tion for the club’s keen golfers.          Bulkers had no responsibility for the
of identifying an overall winner as the                                               navigation of the vessel nor for the
Vessel of the Year is a new addition to    After the dramatic grounding all 22        rescue, but we thank the owners and all
the programme – one for which the          Korean and Filipino crew members           Australian authorities involved in the
officers and crew of the Tessa Kosan       were successfully rescued from the         rescue operation for a job well done.
were awarded a commemorative plaque        vessel by helicopter. The vessel had
and a 32” flat-screen TV.                  no cargo onboard, as it was waiting
                                           to load coal. During further stormy
“This programme is all about encour-       weather, the ship was pushed onto
aging team effort, and it’s obviously      the beach and was stuck in the sand,
been very successful,” says Klaus          completely trapped between the
Grøndal. “We’re not only paying out        beach and the reef. There were fears
more reward money, but the steady          that it could break up and cause envi-
reduction in crew-related remarks          ronmental problems.
also indicates a real change in attitude
and awareness. The performance of          The vessel’s Japanese owners, together
the Tessa Kosan is a good example          with salvage experts, decided to try to
of people pulling together to put our      refloat the ship. After the third at-
core values into practice.”                tempt, it was successfully towed off



                                                                                                                                9
     For more than a century, J. Lauritzen reefer ships have
     served worldwide markets. Seen here, the Knud Lauritzen
     off New Zealand with a full load of containers.




     The end of an era
     reefer business
     A history of more than 100               Pioneer of the reefer trades                 atlantic banana trades. JL consequently
     years has come to an end with            JL was a pioneer in the development          played a leading role in the expansion
     J. Lauritzen’s sale of its 50%           of the reefer trades, carrying citrus from   of the reefer business during the 1930’s,
     share of NYKLauritzenCool to             Spain to England as early as 1905.           and JL’s reefer activities were also
     NYK Reefers Limited, JL’s pro-           During the 1920’s, JL installed electrical   extended to include Chile, Ecuador,
     fessional and dedicated partner          ventilation systems in the cargo holds       Brazil, and South Africa.
     during the last four years. As           of its vessels in order to improve the
     a consequence of the transac-            still rather primitive carrying conditions   On the vessel side, the first of a series of
     tion, NYK will take full control         for perishable cargoes. Regular services     three general cargo vessels were recon-
     of the company, which has                were established from Italian ports to       structed at Elsinore Shipyard in Den-
     been renamed NYKCool AB.                 the UK, from Sicily and Spain to             mark, part of the J. Lauritzen Group,
                                              Gdyniain in Poland, and between the          in the beginning of the 1930’s. These
                                              Canary Islands and Antwerp in the            converted refrigerated vessels played
                                              Netherlands. In 1925 JL opened its           an important role in the early phase of
                                              first overseas office in Valencia, Spain.    the development of the reefer trades.

                                              During the 1930’s, JL expanded its           A new milestone was reached in 1935,
                                              reefer activities considerably. In 1931,     when JL took delivery of its first pur-
                                              JL performed its first shipment of           pose-built reefer vessel, equipped with
                                              bananas from West Africa to France.          specialised cooling machinery, also from
                                              This was a major achievement, since          the shipyard in Elsinore. The YRSA,
                                              there was no experience in transporta-       later renamed African Reefer, was JL’s
                                              tion of bananas over such long distances.    first vessel to carry the “Reefer” name
                                              Also in 1932, JL negotiated a long-term      and traded for JL until 1963. During
                                              contract concerning transportation of        the second half of the 1930’s, JL fur-
                                              bananas from the West Indies to Europe,      ther expanded its fleet of dedicated
                                              and JL subsequently became instru-           reefer vessels and the African Reefer
                                              mental in the development of the trans-      was followed by a series of sister vessels.


10
 “J. Lauritzen has enjoyed a strong partnership with NYK Reefers and
 a very good cooperation with our Swedish colleagues. As a part of
 Lauritzen’s overall strategy we decided to sell our reefer fleet in 2006,
 and it is therefore only natural that NYK takes over our 50% shareholding
 of the joint marketing company.
 Torben Janholt, President & CEO, J. Lauritzen




a: JL exits the
 Modern reefer vessels                      change was made in their appearance         During this period, JL’s fleet of reefer
 In 1953 a new series of modern reefer      as these vessels, instead of being white,   vessels gradually expanded with bigger
 vessels was ordered at the Lauritzen       were painted the same JL-red as the         ships, and in the late 1970’s four sister
 Group’s shipyards in Elsinore and          company’s polar vessels.                    vessels – the Asian Reefer, Balkan Reefer,
 Aalborg, Denmark. Major innovations                                                    Canadian Reefer, and Ecuadorian Reefer
 included replacing inflammable cork        Between 1968 and 1974, six sister           – were delivered, each with a hold
 with glass wool as insulation material     vessels were built at Aalborg Shipyard.     capacity of 588,000 cbft. and a speed
 and replacing traditional wooden grat-     These were the so-called Italian reefer     of 22 knots. The partnership existed
 ings with aluminium gratings. Diesel       class, with a cargo carrying capacity of    until 1983, when P&O decided to
 engines from Burmeister & Wain gave        422,000 cbft. and able to make a laden      withdraw. Consequently, JL became
 the vessels a service speed of 18 knots.   speed of 22 knots.                          the sole owner of LPR and the com-
                                                                                        pany name was changed to Lauritzen
                                            The pool concept                            Reefers.
                                            Around 1970, a pool concept was
                                            adopted by J. Lauritzen in order to         After 1983, the Lauritzen Reefers’
                                            secure economies of scale through the       pool was gradually developed, includ-
                                            control of a larger number of vessels       ing JL’s reefer vessels as well as vessels
                                            from other owners. Thus a joint-            belonging to other reefer owners. JL
 The African Reefer, delivered in 1935,     venture with Peninsular and Oriental        contributed the majority of the vessels
 was J. Lauritzen’s first purpose-built     Steam Navigation Company Ltd.               employed in the pool, which in the
 reefer vessel equipped with specialised    (P&O) was established in 1971 under         beginning of the 1990’s comprised
 cooling machinery.                         the name of Lauritzen-Peninsular            about 65 specialised reefer vessels.
                                            Reefers (LPR). The company was owned
                                            on a fifty-fifty basis between JL and       JL/LR became a market leader with
 In the second half of the 1950s more       P&O, but vessels belonging to other         regards to trade development as well as
 new vessels were ordered, and the ves-     reefer owners were also operated by         technological innovation. An example
 sels’ carrying capacity was increased      LPR. By 1975, LPR controlled a com-         of trend-setting technological innova-
 to almost 250,000 cbft. A noticeable       bined fleet of some 25 reefer vessels.      tion was the development of the Family


                                                                                                                                     11
     “It is obviously emotional for us to leave the reefer business and we
     wish NYKCool a fair wind. We want to thank all our trustworthy cus-
     tomers worldwide for their continued support. We also thank the many
     dedicated employees of JL who over many years worked hard to meet
     our customers’ demands.”
     Torben Janholt, President & CEO, J. Lauritzen




     Class reefer vessels (758,725 cbft.        Lauritzen Reefers and Cool Carriers,      created. Finally, NYK acquired the
     capacity under deck and 118 FEU            creating LauritzenCool. Following this    remaining 50% of NYKLauritzenCool,
     reefers on deck) delivered from            initial strategic move, JL became         effective 1 June 2007, thereby taking
     Danyard (Aalborg and Frederikshavn         instrumental in the consolidation of      full control of the company.
     Shipyards) in 1990-91. A reefer-in-        the reefer industry. Lauritzen Reefers
     dustrial cluster had gradually evolved     and Cool Carriers were a perfect          Ongoing excellence
     within the Lauritzen Group, which          strategic fit, which combined two of      For JL, the recent transaction marks
     included construction at Danyard of        the strongest brand names in the          the end of an era with intimate cus-
     state-of-the-art reefer vessels equipped   industry, with robust market positions    tomer relationships and great col-
     with advanced cooling machinery pro-       in all major trades, strong conceptual    leagues. We thank them all for their
     duced by Sabroe Refrigeration, owner-      skills, and long-lasting customer rela-   trust and support, and wish them all
     ship of reefer vessels by J. Lauritzen,    tionships. Furthermore, both compa-       the best of luck in the future.
     and commercial management of ton-          nies had experience with land-based
     nage by Lauritzen Reefers’ pool.           reefer logistics as a supplement to       J. Lauritzen will endeavour to bring
                                                ocean transportation, and on that         the entrepreneurship, innovative skills,
     Over the years Lauritzen Reefers worked    basis LauritzenCool Logistics (LCL)       and flexibility that we have gained
     diligently to optimise the return on       was established.                          within the reefer industry with us
     voyages by exploiting the flexibility                                                in our constant effort to become a
     of the reefer ships’ holds to carry dry    In August 2003, a strategic partnership   world-class shipping company, irre-
     cargoes on return voyages. The reefer      was established between NYK Reefers       spective of within which segments of
     trades are characteristically from the     and LauritzenCool. This was shortly       shipping we concentrate our efforts.
     southern to the northern hemisphere,       followed by NYK’s acquisition of 50%
     and the ability to carry packaged          of LCL in January 2004 and NYK’s
     goods or, at a later date, containers on   subsequent 50% acquisition of             Background source for article:
     the return voyages could significantly     LauritzenCool in September 2005,          Søren Thorsøe. “J. Lauritzen 1884-1984.”
     improve the bottom-line. This concept      whereby NYKLauritzenCool was              The World Ship Society, Kendal, 1984.
     peaked during the years of cooperation
     with the NOBOA group, with
     bananas and other fruits as fronthaul
     cargoes for the US and Japan markets
     and cars as backhaul cargoes from
     Japan to Chile, Peru, and Ecuador.

     Major acquisitions
     Lauritzen Reefers’ pool was terminated
     in 1996, after which LR was established
     as a stand-alone entity operating ton-
     nage solely owned and time-chartered
     by JL.

     In December 2000, JL acquired Cool
     Carriers from Norwegian Leif Hoegh         Hiroshi Yamafuji (on left), CEO, NYK Reefers and Torben Janholt,
     & Co. and subsequently merged              President & CEO, J. Lauritzen


12
  A Capesize milestone
Lauritzen Bulkers places                     to strengthen the Lauritzen Bulkers          ships on order at Hyundai are being
first-ever order for Capesize                fleet, which is today at a record level      built to meet the latest CSR (Common
newbuildings with Korea’s                    of more than 85 ships.” The growth           Structural Rules) and PSPC (Performance
Hyundai shipyard.                            strategy is further evidenced by the         Standard for Protective Coating) stan-
                                             fact that Lauritzen Bulkers is awaiting      dards. The application of these stan-
Although Lauritzen Bulkers acquired          delivery of more than 40 other vessels,      dards serve various purposes, namely
two time-charter Capesize vessels last       including purchased, contracted, and         to prolong the service life of the vessel,
year, the order with Hyundai is the          time-chartered ships. They are to be         increase its safety, and at the same time
first for newbuildings of this size.         delivered between now and 2011, and,         reduce its maintenance. They will be
They are scheduled for delivery during       encompassing a variety of vessel sizes       used primarily to transport iron ore,
the last quarter of 2009 and the first       and types, indicate Lauritzen Bulkers’       and are 292 metres long, have a 45
quarter of 2010. In addition, two sim-       determination to increase its fleet across   metre beam, and draw an 18-metre
ilar Capesizes have been ordered from        all segments.                                draft fully loaded. Because of the enor-
Japanese yards. “At 180,000 tons dead-                                                    mous pressure of being loaded at rates
weight, they’re the biggest ships we’ve      Capesize ships – so called because they      of up to 15,000 tons per hour, the
ever ordered,” says Jens Ditlev Lauritzen,   are too large to traverse the Panama         four new vessels will also incorporate
president of Lauritzen Bulkers. “In          Canal and therefore must round the           a stress-monitoring system to protect
the larger picture, these four Capesize      Cape of Good Hope and Cape Horn              their hulls.
purchases are part of our ongoing            to travel between oceans – represent
strategy of taking every opportunity         the largest type of bulker carriers. The




   “In the larger picture, these four Capesize
   purchases are part of our ongoing strategy
   of taking every opportunity to strengthen the
   Lauritzen Bulkers fleet, which is today at a
   record level of more than 85 ships.”
   Jens Ditlev Lauritzen
   President, Lauritzen Bulkers




                                                                                                                                       13
     Allotment
     gardens –
     nature and
     leisure within
     the city limits
     For the past 12 months, JL’s working
     environment has been slightly different
     from our posh neighbourhood in downtown
     Copenhagen.

     At Sankt Annae Plads our nearest           and an increase in population, the
     neighbour is the new Opera house.          interest in allotment gardens increased.
     At our temporary premises at Amager        In that period the city of Copenhagen
     Strandvej the Opera House has been         broke its old boundaries and many
     replaced with a small green enclave        large, dense five-story buildings were
     containing a concentration of small,       constructed. These flats were often
     unique sheds – so-called allotment         very small, some with only a view of a
     gardens. Compared to the downtown          backyard, and the residents longed for      holders spent most their leisure hours
     neighbourhood with its charming            natural surroundings and the outdoors.      in their gardens, taking great pride in
     boutiques, art galleries, and gourmet      As a result, areas in the vicinity of the   creating a small paradise of their own.
     restaurants at every turn, the contrast    city were rented by the municipalities      Where there used to be squares with
     of the new surroundings is striking.       for allotments, so that people could        heaps of rubbish outside the city, the
                                                get into contact with nature and live a     outskirts now offered wide green areas,
     Allotment gardens form a characteris-      healthy outdoor life.                       fruit trees, and neat little houses.
     tic feature of Danish cultural life, and                                               However, the allotment gardens have
     the roots of this phenomenon can be        Rest and recreation – and necessity         not only served as place of pure rest
     tracked back to the late Middle Ages,      The size of the gardens ranged between      and recreation: during the Second
     when gardens were situated outside         200 and 400 square meters, and often        World War, they provided a welcome
     town walls and served as an important      the plots included a small shed built       and vital supply of vegetables and
     food supply. In the 1890s, due to the      with the aid of the most primitive          fruits for a nation suffering under gov-
     Industrial Revolution, poor housing,       tools and materials. The allotment          ernment rationing.

14
While allotment gardens in the past         roughly means to be cosy and relaxed         the allotment gardens’ atmosphere of
were an integral part of urban working      in warm surroundings with friends            tranquillity for the bustling environ-
class culture, today they are more likely   and family. Many allotment holders           ment of Frederiksstaden, with its cul-
to be associated with a summer getaway      put a great deal of effort into creating     tural institutions, wide avenues, and
for urban families with children – and      that cosy and comfy atmosphere in            opulent dwellings.
even for the highly paid. It is the free-   their allotments.
dom to get out of the apartment for
the summer and take a break from the        For almost a year now JL has taken a
demands of modern life that attracts.       break from the throbbing life of the city.
People are able to socialize and relax      But we will soon leave these natural
in the atmosphere they have created.        surroundings behind in order to return
There is a Danish word that fits this       to our renovated headquarters on 24
lifestyle perfectly – hygge. Although       September. Who knows – perhaps we
Danes say it cannot be translated, it       will feel a little nostalgic about trading

                                                                                                                                  15
     Goodbye to
     training, Hello
     to the real thing
     As of 1 August three trainees made the
     transition to real jobs, more responsibility . . .
     and larger paycheques.




                               Jannik Jarnsborg,                          first, but I think that’s one of the most
                               Assistant Chartering Manager,              valuable parts of the trainee programme
                               Lauritzen Bulkers                          – learning how to juggle competing
                                                                          demands on your time and to be
                               Like all J. Lauritzen trainees, Jannik     aware of how you’re doing the job.”
                               Jarnsborg has completed a two-year         He recently had the chance to spend
                               programme of general shipping educa-       two weeks at J. Lauritzen’s Singapore
                               tion courses supplemented by equally       office gaining direct experience of
                               intensive on-the-job training – spend-     overseas operations and seeing exactly
                               ing his first year of training with        how they do their jobs. “I’m looking
                               Lauritzen Kosan and the second one         forward to being a full-fledged
                               with Lauritzen Bulkers. His final aca-     employee after 1 August,” he says.
                               demic project was to write and defend      “To being an equal among equals
                               a paper on the time-charter business,      and giving it my best effort. And,
                               which brought together his studies         of course, to collecting a bigger
                               and his practical experience with the      paycheque . . . that’ll be nice, too.”
                               sales and purchase of vessels and time
                               charters. Being rapidly immersed in the    Monica Christensen,
                               details of vessel purchasing and time      Assistant Operations Manager,
                               chartering was demanding, he says, but     Lauritzen Kosan
                               mastering the technical details wasn’t
                               the most challenging part of the trainee   For the past two years, Monica Chris-
                               programme.                                 tensen has balanced the theoretical side
                                                                          of her trainee education with almost
                               “If you can handle it, you’re given        daily contact with ship captains and
                               pretty much responsibility right away.     agents. As a member of the operations
                               That means the phone is ringing, you       department of Lauritzen Kosan, she
                               have people pulling you from all sides,    has literally been at the crossroads of
                               and it’s up to you to find out how to      worldwide shipping activity, engaged
                               prioritize everything. It was tough at     in everything from coordinating load-
16
ing and discharge ports and determin-        and complex side of the business. “It’s    ing to cope with serious job responsi-
ing cargo discharge temperatures to          a challenge,” she says, “but that’s what   bilities right from the start. “This was
appointing agents and updating sched-        I love about this job. You never know      especially true when I first started with
ules. “Our academic classes in ship-         for sure what’s going to happen next.”     the Bunkers Department,” he says.
ping gave us a solid background in the                                                  “One day, about a month after I began,
shipping business, but the actual job        Christian Grønlund,                        I realized that – at age 21 – I was buy-
training has definitely been ‘learning       Assistant Chartering Manager,              ing oil for ten vessels and trading for a
by doing’,” she says. “After 1 August,       Lauritzen Kosan                            total amount of about USD 10 million.
I know I’ll have the feeling of more                                                    Let’s just say it both made me nervous
responsibility, but in reality I’ve been     Christian Grønlund has already had         and really focused me on not making a
allowed to do my job pretty independ-        broad practical experience, even by JL     mistake.” Christian Grønlund credits
ently already.”                              trainee standards. After spending his      all his senior colleagues – but especially
                                             first year in JL’s Bunkers Department      his assigned mentors – for providing
Her training has also included rotating      trading oil, he moved to Lauritzen         the help and advice he needed. Asked
one-week stretches as a duty officer on      Kosan, where he has worked in both         about the future, he points out that
call for captains, agents, or charterers     the Operations Department and              there is always room for growth within
who need to contact Lauritzen Kosan          the Chartering Department. As of 1         the shipping industry – and always
outside of regular office hours. Usually     August he will continue with Lauritzen     something more to learn. On that note,
this isn’t a problem, but, she observes      Kosan as an assistant chartering man-      he is soon travelling to Korea to get a
that “if you’re very unlucky you might       ager. “Basically, my job is to keep ves-   firsthand view of Lauritzen Kosan’s
have to work through the night, so it        sels employed, to make sure they have      newbuilding projects. The future looks
can be demanding. But even as a trainee      cargo to sail with,” he says. “You could   wide open.
you get to be the one who sorts things       compare it to a hotel, which ideally
out and solves problems, and that’s          would maintain 100% occupancy. We
exciting.” In the next few years Lauritzen   try to come as close to that as we can
Kosan will be taking delivery of tech-       for our ships, largely on contract, but
nically advanced newbuildings from           also through the spot market.”
Korea that have ethylene capacity,
and, along with everyone else, Monica        He also confirms that the most intense
Christensen will be learning a new           part of the training period was learn-
                                                                                                                                     17
     It’s back to school
     for experienced
     purchasers
     Two members of Lauritzen           “Well, at least that’s behind me,” thinks
     Fleet Management’s purchasing      nearly every graduate who leaves
     department earn marine pur-        school and gets a job. Not necessarily,
     chasing and supply diplomas        as Henning Andersen (above left) and
     in year-long distance-learning     Klaus Christoffersen, both seasoned
     programme.                         J. Lauritzen purchasers with years of
                                        experience, recently discovered. During
                                        the past year, they participated in the
                                        first class of a groundbreaking new
                                        course launched by the International
                                        Marine Purchasing Association(IMPA)
                                        in co-operation with the National Sea
                                        Training Centre (NSTC) and Lloyds
                                        Maritime Academy. After final exams
                                        in July, both men emerged as success-
                                        ful graduates with diplomas in marine       trial production companies in mind
                                        purchasing and supply.                      and are more concerned with stock
                                                                                    planning, production planning, and so
                                        The diploma is intended for all pur-        on. This course was developed from a
                                        chasing practitioners in shipowning,        strictly maritime point of view, so it’s
                                        operating, and management companies         much more useful for shipping com-
                                        as well as all ship suppliers around the    panies. It offers a unique opportunity
                                        globe. Comprised of eight discrete          to gain a recognised qualification in
                                        modules, the course considers different     marine purchasing and supply, which
                                        purchasing models, incorporates appro-      is why we’re requiring all our current
                                        priate marine insurance and English         and future employees to complete it.”
                                        law, and explains how they interface
                                        with other areas such as finance and        The various course modules were
                                        administration. Except for the final        created by industry experts with
       “Until now, the                  exam, all course work and testing is        specialised backgrounds as diverse as
       shipping industry                delivered by distance-learning methods,     a port captain with customs expertise
                                        via the Internet.                           and a London law school professor.
       has never had a                                                              Henning Andersen and Klaus Chris-
       specific course for              A maritime focus                            toffersen say that the course offered a
       maritime purchas-                “Until now, the shipping industry has       combination of benefits, both strategic
                                        never had a specific course for maritime    and operational. “With our past expe-
       ing and supply.”                 purchasing and supply,” says Henrik         rience, we were familiar with a good
                                        Steffensen, head of purchasing for          deal of the basic information,” says
       Henrik Steffensen                Lauritzen Fleet Management and an           Klaus Christoffersen, “and that’s just
       Head of Purchasing Department,   IMPA board member involved with             as well since some of the modules, like
       Lauritzen Fleet Management       establishing the new programme.             the one covering English law, were
                                        “Most courses were set up with indus-       pretty demanding.”



18
                                            Lauritzen
                                            Tankers builds
                                            in China
                                            Newbuildings on order from                   remaining five will follow in 2011. All
                                            GSI offer attractive combina-                six vessels will be owned and operated
                                            tion of price and design.                    by Lauritzen Tankers. This brings the
                                                                                         total number of ships on order to ten:
                                                                                         two smaller newbuildings are coming
                                            Six new recently purchased medium            from Korea early next year and two
                                            range (MR) product carriers are the          from Japan in 2010. “In terms of
                                            first vessels Lauritzen Tankers will         price negotiation and design flexibility,
                                            take delivery of in China. They are          it’s very important to have good long-
                                            to be built at Guangzhou Shipyard            term relationships with shipyards,
                                            International Co., Ltd. (GSI), which         which we’ve already established in
                                            is a part of China State Shipbuilding        Japan and Korea,” says Erik Donner.
                                            Corp. (CSSC), South China’s largest          “We’re happy to be able to add GSI
                                            modern integrated shipbuilding enter-        to the mix. And we hope that this
                                            prise. “GSI is one of the best – and         new established relationship will
An immediate success                        best known – yards in China building         bring additional future newbuildings.”
The 2006-2007 course, the first one         tankers. They focus exclusively on
of its kind, was even more successful       product carriers, and count other
than anticipated, with 60 people sign-      Danish shipping companies among
ing up. The second year, with more          their customers,” says Erik Donner,
than 40 people enrolled, has followed       vice president of operations and
suit. Participants in 2006-2007 were        chartering for Lauritzen Tankers.
chiefly from European companies,
but also included representatives from      In the past, Lauritzen Tankers has
companies in Japan, Hong Kong,              worked with shipyards in Korea and
and the Middle East. In addition to         Japan, but GSI was able to offer an
J. Lauritzen, other major Danish            attractive combination of price and
shipowners such as AP Moeller Maersk,       design – all six ships will be built to
Torm, and Scanlines took part.              meet the latest IMO II/III regulations.
                                            “This new design is 50,500 dwt.,” says        “This new design is
As for the return to the routine of         Erik Donner, “which fits with our
studying and taking tests, it seems as if   strategy of concentrating on the larger
                                                                                          50,500 dwt, which fits
little has changed. “It’s a good thing to   end of the MR scale. Because these            with our strategy of
do the course together, the way Klaus       ships have a larger cubic capacity            concentrating on the
and I did,” says Henning Andersen.          (58,000 cbm), they’re able to handle a
“That way you’ve got someone to             broader range of voyage combinations
                                                                                          larger end of the MR
compare notes with – and someone to         than smaller MRs. This gives us greater       scale.”
keep up with.”                              trading flexibility and potentially higher
                                            earnings.”                                    Erik Donner
                                                                                          Vice President, Operations and
                                            The first of the ships will be delivered      Chartering, Lauritzen Tankers
                                            in the fourth quarter of 2010, and the



                                                                                                                                     19
                                                                                                                   September 2007




Namegiving ceremonies
                                                       20 January 2007
                                                       Sofie Bulker delivered from the Shin Kurushima Dockyard.
                                                       Sponsor: Sofie Wegeberg, daughter of Carl Wegeberg, Vice President,
                                                       Lauritzen Bulkers–Tonnage Procurement.

                                                       19 February 2007
                                                       Freja Dania delivered from the Shin Kurushima Dockyard.
                                                       Sponsor: Tove Elisabeth Nielsen, Senior Vice President, J. Lauritzen.

                                                       12 March 2007
Mrs Karen Heering (far right) was spon-                Belaia delivered from Imabari Shipbuilding Co., Japan. Sponsor:
sor for the Freja Selandia on 28 March                 Margarita Tidemand, spouse of Sverre Tidemand, Managing Director
2007.                                                  and member of the BOD of Belships ASA.

                                                       28 March 2007
                                                       Freja Selandia delivered from the Shin Kurushima Dockyard.
As reported in this and earlier issues of              Sponsor Karen Heering, spouse of Niels Heering, attorney-at-law,
Lauritzen News, J. Lauritzen’s current                 member of the BOD of J. Lauritzen.
newbuilding programme is extensive,
including more than 50 vessels to be                   12 July 2007
delivered within the next couple of                    Freja Fionia delivered from the Shin Kurushima Dockyard.
years.                                                 Sponsor: Cheryl Talam Hansen, spouse of Tom K. Talam Hansen,
                                                       Managing Director, J. Lauritzen Singapore.
When a newbuilding is delivered, it’s
time for festive activities at the Far                 23 July 2007
Eastern shipyards involved. Each                       Perla Bulker delivered from the Tsuneishi Fukuyama Shipyard.
delivery is celebrated at the shipyards                Sponsor Anne Bruun Larsen, Senior Operations Manager, Lauritzen Bulkers.
by representatives from the yard,
                                                       7 August 2007
the shipowners, clients, business
                                                       Charlotte Bulker delivered from the Hakodate Shipyard.
associates, representatives from the
                                                       Sponsor Charlotte Warsberg, daughter of Torben Warsberg,
J. Lauritzen Group – and not least
                                                       Vice President, Lauritzen Bulkers-Chartering/Capesize.
by the sponsors.



Editors                                J. Lauritzen A/S                       Editorial support and design           Lauritzen News is a semi-annual
Torben Janholt                         Sankt Annæ Plads 28                    Cross-Border Communications            publication. Reproduction
Tove Elisabeth Nielsen                 1250 Copenhagen K                      Copenhagen                             permitted only after agreement
Jens Søndergaard                       Denmark                                                                       with the editors.
                                       Tel: +45 3396 8000




Facts on J. Lauritzen A/S

J. Lauritzen A/S operates globally through these business units: Lauritzen Bulkers, Lauritzen Kosan, and Lauritzen Tankers.
JL employs a staff of approximately 600 persons and together with partners/associates controls a combined fleet of about 200 vessels representing bulk
and gas carriers and product tankers.

For more details on JL’s business activities and on the fleet, see www.j-lauritzen.com

				
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