LIGHTHOUSEMAGAZINE
SVITZER CORPORATE PEOPLE MAGAZINE OCTOBER 2015
NAVIGATING
ROUGH SEAS
INSIDE:
EDITORIAL
REDEFINING OUR REGIONS FRAGILE GLOBAL ECONOMY OUR GLOBAL AGENDA 2015
– AND BEYOND
JOURNEY TO SAFETY
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SALVAGE BECOMES ARDENT
AUSTRALIA – BUSINESS TURNAROUND
EUROPE – DEFEND AND GROW AMERICAS – INTO THE BIG LEAGUE
MEA – EXPANDING OUR FOOTPRINT
CONNECT WITH YAMMER
KIDS COLOURING CONTEST
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CHALLENGES AND
OPPORTUNITIES
AHEAD
In August, we announced our half-year
results. Despite facing challenging markets,
we have been able to generate a satisfactory
result with higher margins and increased
market share compared to the same period
last year. It is also great to see the progress
on safety. There has been plenty of recognition from people in the industry on our
safety drive, and I am personally very
impressed with the response of Svitzer’s
global safety day, highlighting the need for
safety leadership from all of us.
At the same time, we need to continue our
efforts to improve service levels and enhance
our competitiveness. Many of our operations
are increasingly impacted by the slowdown
in the resource and oil sectors, and by a
more sober outlook for China. We are also
seeing the beginning of a transition from
coal to cleaner energies, which will have a
structural impact of great magnitude for
several Australian ports. We need to brace
ourselves for a difficult period of slower
activity in shipping.
We continue to see many opportunities to
grow in new markets. Our Americas team has
been very busy recently, expanding our
presence in Canada and entering the sizeable
Brazil towage market through the acquisition
of Transmar. Svitzer Australia has successfully started up some of the most challenging
terminal towage operations globally: the
Gorgon LNG and the Papua New Guinea Oil
Search terminals. And in the MEA and Asia
regions, we are working on several highly
exciting projects. You should expect to hear
more about some of these growth opportunities in the next few months.
So do we expect the coming year to be all
doom and gloom? Of course not! While the
macro economic situation looks increasingly
difficult, then there are plenty of interesting
opportunities for a financially strong player
like Svitzer. We are determined to accelerate
our growth on the basis of second-to-none
service levels, strong safety performance and
the industry’s best financial results.
Robert
REDEFINING
OUR REGIONS
MEA and Asia regions to ensure faster growth for Svitzer.
Svitzer’s current business portfolio relies
heavily on mature markets, specifically
Europe and Australia. One of our key
strategic objectives is to increase growth in
our two other regions, AMEA and Americas,
both of which have substantial growth
opportunities. The AMEA region today
covers a huge geographical area, which
limits our focus on strategic growth in
both Africa and Asia.
We have therefore decided, effective 1 October,
to create two regions covering this area: MEA
(Middle East and Africa, as well as the Indian
subcontinent and Sri Lanka) and ASIA (from
Bangladesh in the west to Japan in the
east, and from Russia in the north to
Indonesia in the south). Both regions will
have increased and dedicated management
and business development resources to
help reach our growth targets. The ASIA
region will source back office support from
the MEA region.
The MEA region is led by Torsten Holst
Pedersen, who for three years has led our
AMEA region from the regional HQ in Dubai.
The ASIA region will be led by Alan Bradley
from a regional HQ in Singapore. Alan comes
from a role as CCO for Svitzer Australia, where
he has been responsible for winning
significant harbour and terminal towage
contracts. Lise Demant, previously Cluster
Manager Asia, will step into the role of
ASIA COO. She will be responsible for all
existing business and will maintain close
involvement with business development.
With this strong setup we are confident that
the new Asia region will be able to contribute
significantly to our growth plans.
OUR THREE OBJECTIVES
• Safe operation
• Improve existing business
• Profitable growth
FRAGILE
GLOBAL ECONOMY
We have asked Graham Slack, chief economist at Maersk, to comment
on the state of global economy and how it may affect our business.
HOW DO YOU SEE THE OUTLOOK
FOR THE GLOBAL ECONOMY?
ABOUT
LIGHTHOUSEMAGAZINE
LIGHTHOUSEMAGAZINE IS SVITZER’S PEOPLE MAGAZINE
DESIGN
CORPORATE EDITOR
Cross-Border Communications
Jens Viby Mogensen, jens.mogensen@svitzer.com
IMPRESSION
REGIONAL/DIVISIONAL EDITORS
3,600
Americas, Martin Helweg, martin.helweg@svitzer.com
Asia, Alan Bradley, alan.bradley@svitzer.com
Australasia, Mark Malone, mark.malone@svitzer.com
Europe, Marc Niederer, marc.niederer@svitzer.com
Middle East & Africa, Torsten Holst Pedersen, torsten.pedersen@svitzer.com
EDITOR IN CHIEF
Mika Bildsøe Lassen,
mika.lassen@svitzer.com
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“The global economy is in a fragile position.
The underlying drivers of slowdown are
China, lower commodity prices and a lack
of structural reform in some economies.
These developments are occurring against
a backdrop of high debt levels, rising US
interest rates, slowing export markets and
a potential stock market bubble. Overall, it
raises the likelihood of a so-called hard
landing with the global economy slowing
down. This outlook could further damage
investor and customer confidence, causing
a further pullback in demand.”
SO IS THE GLOBAL ECONOMY ONLY
GOING DOWNHILL FROM HERE?
“It’s a mixed picture, so we need to have a
balanced view. The Chinese authorities are
adopting stimulative policies, Europe is
doing reasonably well and the US grew at
3.9% last quarter. On the other hand, a
country such as Australia is particularly
exposed to the commodity crisis.”
HOW DO YOU SEE SVITZER
IN THIS CONTEXT?
“Some of Svitzer’s operations are likely to
be impacted by the slowdown in shipping.
That said, we have seen plenty of examples
that difficult markets can be beneficial for
the strongest operators. Svitzer needs to
make sure that everyone from office staff
to crews pull in the same direction to
enhance service levels and reduce costs. It
takes hard work and willingness to embrace
changes in the workplace to deliver strong
results in a difficult environment. I believe
you are already ahead of your competitors
in many respects, so keep it up!”
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OUR GLOBAL
AGENDA 2015
AND BEYOND
Svitzer is pursuing a bold agenda of growth and long-term
transformation of the towage business.
Svitzer is the only truly global operator
in towage today. Most other operators are
either local companies or a patchwork
of different pan-regional joint ventures,
unable to match Svitzer’s commitment
of a global approach to safety and service
standards. Nevertheless, we operate in a
very fragmented industry with significant
growth potential for Svitzer.
very negative implications for our industry.
Our customers are pushed hard to find
savings in the supply chain. We need to
acknowledge these challenges and work
closely across our organisation ashore and
on the tugs to find new ways to enhance
our competitiveness.
MEA and Asia. We have just entered
Brazil, which is one of the world’s largest
towage markets. We also have a great win
record within light off-shore operations,
such as the Papa New Guinea Oil Search
terminal, where we operate two 120TBP
tugs off shore.
AMBITION TO TRANSFORM
GROWTH STARTS WITH
PERFORMANCE
SECURING GROWTH IN EXISTING
AND NEW OPERATIONS
Over the last year, we have expanded our
market share in many of our competitive
ports. For example, in the ports of Brisbane,
Sydney, Melbourne and Liverpool, we
have secured support of liner customers
previously using competitors. It’s a great
token of appreciation from our clients.
We continue to see opportunities to secure
more contracts in these operations in the
coming year. However, most of the growth
in 2016 onwards will come from starting
up new operations, not least in Americas,
All businesses depend on capital to grow.
So to continue to attract investments for
new tonnage it’s paramount that we deliver
a strong financial performance. The first
half of 2015 proved quite successful in this
respect and we are well on the way to
achieving our full-year target. That said,
we are increasingly concerned about the
longer term economic outlook of the global
economy, which will likely also have some
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Change is a constant in today’s world.
Svitzer’s ambition is to lead the way in the
transformation of our industry.
We are introducing new ways to help
terminals increase productivity and ship
owners reduce fuel consumption. With our
global operating system, we can provide
more accurate performance data to our
customers, which has proven valuable
when they plan and optimize their port
operations.
We are also embracing new tug designs
and propulsion systems. We have set a new
environmental standard with the ECOtug®
that reduces fuel consumption by up to 10%
and emission of NOX up to 80%, compared
to traditional tugs. Our Gorgon tugs carry
diesel electric engines with the ability to
steam for an hour on battery power only.
In 2016, we will launch the first Reverse
Stern Drive (RSD)® Compressed Natural Gas
(CNG) tug, which is a vessel that combines
high power, lower fuel costs and substantial
reduction in emissions.
We look forward to accelerating our
pioneering initiatives in the future to better
support our clients and cement our position
as a true industry leader.
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SALVAGE
BECOMES
ARDENT
JOURNEY
TO SAFETY
We’ve all set out together on the path to improved safety.
We’ve made significant progress, including a year without LTIs
in two regions. But we still have a challenging journey ahead.
Svitzer Salvage has joined forces with Titan Salvage, a leading wreck
removal company, to create a new global marine services company.
Our philosophy at Svitzer is that safety
always comes first – it is not a matter of
cost, but of commitment. Over the past two
years, that commitment has emerged in
initiatives that engage everyone in the company and will help us accomplish the tasks
we see ahead. A large step in that direction
was the April activation of SOVIQ, a selfassessment tool for tugs, that will be fully
implemented by the end of Q3 next year.
THIRD ANNUAL SAFETY DAY
Svitzer’s annual Safety Day on 28 April
carried on a three-year tradition of
highlighting safety. It began in 2013 with
the introduction of Stop Authority, the
idea that all Svitzer employees have the
authority, the right and the duty to stop
any operation they think is unsafe – a
principle that continues to be a cornerstone of our safety initiative.
This year, the Safety Day theme was
“Taking the lead”, which aims to encourage
everyone at Svitzer to be a safety leader by
watching out for themselves and colleagues.
Also on Safety Day, we introduced a webbased Safety Counter that provides an
immediate way for the entire organisation
(as well as customers and industry partners)
to track our safety performance by showing
time elapsed since the last lost-time incident
– on a company-wide basis, by region and
by vessel. Safety Day sessions at locations
worldwide received very positive feedback
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this year, along with suggestions for
improvement in years to come.
SAFETY AS KEY TO SUCCESS
“Improving safety doesn’t only improve
our safety performance,” says Kristian
Brauner, CTO for Svitzer. “It also increases
cost-efficiency, reliability and business
performance. Also, our customers increasingly demand it. ¬Getting safety right is
the key to our success – both business
success and making sure that all our crews
come home safe from every workday.”
Besides thinking safety at all times, one of
the most important ways we can ensure
safety is to improve the overall quality and
maintenance standards on our vessels. Our
maintenance and repair strategy has been
in place for more than one year, and we
have started to experience the positive
effects of many of its initiatives.
ACCOMPLISHMENTS AND
CHALLENGES
There is definitely hard work yet to be
done, but there is also a sense of momentum building throughout the organisation
– the feeling that everyone is involved and
working together,” says Kristian. “An
especially big achievement is that in May
both the Americas and AMEA regions
completed one year with zero LTIs.” The
challenge now is to investigate further and
determine lessons learned that can be
duplicated in other regions.
The new company, named Ardent, began
operations on 1 May 2015 and is owned
equally by Crowly Maritime Corp., Titan’s
parent company, and Svitzer. Ardent will
bring together their strong heritages and
expertise in an entirely new entity that will
offer customers an even broader range of
capabilities and marine related services.
Svitzer AMEA and Svitzer Americas
receiving their well-deserved recognition
of one year without LTIs.
The new company is headed by Peter
Pietka, formerly CEO of Svitzer Salvage.
“Ardent will be stronger and more efficient
than either of the previous companies
could be alone,” he says. “It will become
an industry leader in wreck removal and
emergency response, which are part of our
extensive marine offering to the industry.
Ardent will serve as a strong platform for
new expansion opportunities in complementary businesses such as underwater
services and offshore decommissioning.”
GREATER STRENGTHS, LOWER COSTS
SHARE THE KNOWLEDGE
WITH YAMMER
A reminder to everyone at Svitzer to
sign up for Yammer – it’s a great way
to share safety and technical best
practices with your colleagues
worldwide.
The real power of the merged business, and
its benefit for the industry, will be its ability
to adapt to changing customer needs – as well
as to the challenging economic conditions
described on page three. Joining forces also
brings economies of scale, as it allows the new
company to reduce geographical overlap in
their services in Europe, the US, Asia and
Australia. The result is an organisation with
greater combined strengths, global reach
and lower costs.
THE NAME SAYS IT ALL
In recent years, Svitzer has focused on
being the loss mitigation partner for the
marine industry through their preparedness
department and emergency response services.
The creation of the new company with Titan
is the next step to becoming the safe choice
for the industry. Not only can customers
trust that operations will be carried out
safely, but they can also rest assured that
their interests will be cared for to the
highest standards.
“Ardent” means intensely
devoted, and that is the
culture the company wishes
to create – absolute commitment
to the things it does and to
the customers and stakeholders
it serves in the areas of:
• Risk mitigation
• Emergency response
• Wreck removal
• Offshore decommissioning
• Underwater services
SIGNIFICANT GLOBAL FOOTPRINT
Ardent’s combined strengths means it can
provide a stronger network in key global
locations and that best practices can be
shared globally. Ardent is headquartered in the
US, in Houston, Texas, because of existing
strong maritime industry connections
there. Houston also offers close proximity
to the offshore oil and gas industry, which
is important for future growth with respect
to decommissioning and ER/Preparedness
services. The company will also have
operational offices in the Netherlands, the
United Kingdom and Singapore, as well as
supporting offices in Australia, Brazil,
South Korea, Greece and South Africa.
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AUSTRALIA
SVITZER AUSTRALIA
TURNING AROUND
A CHALLENGED BUSINESS
TYPE OF BUSINESS:
COUNTRIES OF OPERATION:
FLEET:
WORKFORCE:
Harbour and terminal towage
Australia and PNG
76 tugs, 3 barges, 1 pilot boat, 1 oil tanker and some 25 smaller vessels (including launches, lines boats and platforms)
On-shore – 120 FTE
Off-shore – 957 FTE
Working constructively with employees remains Svitzer Australia’s
preferred option for dealing with the
very real commercial challenges.
Svitzer Australia faces the need to turn
around a very challenged business. Results
are down compared to last year, and we
should expect our business to be further
negatively affected by the slowdown in
China – as well as by other global economic
conditions outlined on page three.
Slowing economic growth domestically
and falling commodity prices globally have
contributed to a plateauing in the volumes
passing through the nation’s ports. Confronted
with this situation, as well as greater competition from new participants, Svitzer has
been taking a hard look at all aspects of
our harbour towage business. Rather than
taking a top-down approach to cutting costs
and improving productivity, we have seen
building stronger employee engagement as
the key to increasing competitiveness.
“Given their firsthand knowledge of
Svitzer’s operations and the needs of our
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customers, it simply made good business
sense not only to listen to our employees,
but to go one step further and directly
involve them in building a more sustainable
and competitive business,” says Mark
Malone, Svitzer Australia’s Managing
Director. As a first step towards this goal,
Svitzer commissioned the Macquarie
University’s Centre for Workforce Futures
to interview as many of our employees
as possible. The objective was to gain a
deeper understanding of how they view
our operations and what management can
do to better support them. All told, the
Centre interviewed more than a quarter of
the workforce. It is the first time Svitzer
had undertaken such an exercise.
BUILDING RELATIONSHIPS
Encouragingly, a key conclusion from the
research is that most people in most ports
love what they do for a living and think
Svitzer is a good place to work. But equally,
it also confirmed that they want a greater
say in the decisions that affect them and
how they do their jobs. We are now working
to turn the feedback and ideas received into
concrete actions that will make it easier for
our employees to do their jobs, while
helping to build a more competitive and
sustainable business.
“Unlike others that take a top-down approach
to cutting costs and improving productivity,
working constructively with our employees
remains Svitzer’s preferred option for dealing
with the very real commercial challenges we
confront and making the changes required,”
said Mark. The ultimate beneficiary of all
we are doing will be our customers, both in
terms of the tariffs they pay and the service
they receive. And already the changes we
are making, including being more responsive to the needs of shippers, are producing
dividends in what is an increasingly
competitive marketplace.
BUSINESS GROWTH
Over the past twelve months we signed long
term contracts with some of the world’s
biggest shipping lines, including the Mediterranean Shipping Company (MSC) and ANL,
part of the Marseille-based shipper CMA CGM.
And on 1 April this year our new agreement
commenced with Clipper Bulk, one of the
world’s largest owners/operators of Handysize and Supramax vessels. Svitzer is now
providing safe, reliable towage services to all
their vessels visiting Australian ports. Lastly,
during the course of 2014 we successfully
grew our market share in the ports servicing
Australia’s three largest cities: Brisbane,
Sydney and Melbourne. Going forward,
Svitzer will continue to value the long-term
relationships we have developed with our
customers over short-term gain.
While the harbour towage side of our
business faces an increasingly challenging
operating environment, our concerted efforts
to pursue emerging opportunities in the
off-shore oil and gas industry has gone from
strength to strength. In the last twelve
months, Svitzer added PNG-based Oil Search
to the list of global energy suppliers that
rely on us to keep their vessels moving.
We now have a contract to deliver towage
and other marine services to their Kumul
Terminal. Meanwhile, our long term contract
to deliver towage and pilotage services to
Chevron’s new Gorgon LNG Project has
begun. We have taken possession of our
four new eco-tugs and pilot boat and have
contracted the high-quality, professional
crews that will man them.
INVESTING IN THE FUTURE
To ensure that we can continue to deliver
the highest level of service to our customers
both now and well into the future, we are
investing significantly in renewing and
expanding our fleet and in maintaining
and improving the skills and expertise of
our people. Last year alone, we acquired
one new and three second hand tugs. We
have also acquired a new full-mission tug
simulator, a tool that has greatly enhanced
our in-house training capabilities. Located
in Fremantle, this new simulator is being
used to improve the skills and readiness of
our existing crews. It will also be employed as
part of our recruitment process to assess
more closely the abilities of potential
candidates.
As well as investing in the capabilities
of our employees, Svitzer is commited to
providing them with safe and healthy
workplaces. As a result of the improved
procedures we’ve introduced, the new
technology we’ve installed and the
ongoing awareness programs we’ve
instituted, working on a Svitzer tug
has never been safer than it is today.
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EUROPE
SVITZER EUROPE
DEFEND
AND GROW
TYPE OF BUSINESS:
COUNTRIES OF OPERATION:
FLEET:
WORKFORCE:
Harbour towage, 26 ports; terminal towage, 1 port
UK, Sweden, Denmark, Norway, Netherlands, Germany, Portugal
Mainly a mix of ASD and Voith tugs, 125 total vessels
On-shore – 156 FTE
Off-shore – 950 FTE
For Svitzer Europe, a strong defence
looks to be the best offense in the
race to win on multiple fronts.
“Europe has become a consistently
profitable region, which places increasing
strategic importance on defending our
position against numerous serious
competitors,” says Marc Niederer,
Managing Director of Svitzer Europe. The
past five months in particular have been
very successful. The challenge is to
maintain that record by defending and
improving existing business in a highly
competitive environment in which towage
companies across Europe are consolidating and attacking new markets.
We have several initiatives in place to help
us do so. The first is to win locally, to be
the supplier of choice in ports throughout
the region. We are well positioned to
achieve this goal, as our company has
decades of local presence and experience
in the region. Going forward, our aim is to
develop an even stronger local presence in
every port and build relations with every
stakeholder. Winning locally is all about
people, and every Svitzer employee in the
region is an ambassador in this effort to
create lasting connections.
MAINTAINING FLEXIBILITY
A second key to becoming the operator of
choice is to capitalise operationally on
our vast geographical coverage. Our
competitors typically operate in only one
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or two ports. They can add resources to
build business and increase profits, but
when business declines they have no
alternative use for their tugs. Svitzer, on
the other hand, serves multiple ports and
can shift resources to where they’re
needed. We need to further improve this
agility; without it multiple ports and
numerous resources become a liability.
new entries into the ports of Rotterdam
and Bremerhaven. In Bremerhaven, for
example, we have gained ground by
focusing on container carrier business
rather than car carriers, which require
more time to service but pay the same.
DEFENDING AND GROWING
Additionally, The Svitzer Continental
Europe Team has turned Amsterdam into
a successful joint venture with Iskes.
Previously, Amsterdam was an operation
where two incumbent operators were
competing in a market that was not large
enough to allow them to make acceptable
returns. Unions, workers council, crew
and management worked hard together
to save the operation and the jobs. The
solution was a fully independent joint
venture, with ownership by Iskes and
Svitzer, which has allowed Svitzer to keep
all the Dutch jobs and the port to quickly
show an economic profit. Customers
have also benefited: where there were
previously two operators managing
separate fleets, the joint venture provides
a single combined fleet that can better
serve customers’ needs.
All of these efforts together have enabled
Svitzer Europe to defend existing business
vigorously. We have successfully dealt
with a strong competitive entry in London
and maintained 95% of our previous
market share. Further we have made
It is clear that the Svitzer Europe Team –
including crew, local offices and the
regional team – is fully committed to
defend our leading position in Europe
and have strategies in place to do so.
A third initiative concerns technical
performance and centres on availability.
In order to maintain a low cost-base, we
try to operate the minimum number tugs
needed to provide a high standard of
service, so it is essential that they are up
and running at all times. Breakdowns can
leave us unable to serve our clients. The
answer is to avoid unplanned downtime by
being diligent about performing preventive
maintenance. Maintenance and dry
docking costs are a valuable investment if
they help avoid a breakdown – the cost, in
terms of lost business, of having a tug out
of operation would be much higher.
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AMERICAS
SVITZER AMERICAS
INTO THE
BIG LEAGUE
TYPE OF BUSINESS:
Harbour and terminal towage
COUNTRIES OF OPERATION:14
FLEET:
73 vessels
WORKFORCE:
On-shore – 61 FTE
Off-shore – 471 FTE
Improving our service offering,
penetrating bigger markets and
aligning local resources spells
growth for Svitzer Americas.
Although Svitzer Americas stretches from
Chile to Canada, with multiple countries and
a lot of distance in between, it has always
been a small region within Svitzer in terms
of operating profit. Commercially successful,
with growth of more than 20% a year, the
region, as Managing Director Martin Helweg
puts it, had never quite been able to break
into the “big league” of Svitzer Europe and
Svitzer Australia. A situation that three
years ago sparked the determination to
improve performance through restructuring
the organisation and by fine-tuning a wide
range of measurables, from technical
performance to safety standards.
BIGGER MARKETS
These efforts are beginning to pay off. Last
year the Americas region recorded the
strongest EBITDA improvement in Svitzer
and posted the highest scores in the company
on all other measurables – from employee
engagement and technical standards to
safety – except growth. “You could say
that we are in the harvest season, reaping
the rewards of groundwork laid down
previously,” says Martin. “We expect to see
growth this year to $40 million EBITDA,
double what it was just three years ago.”
The key to continued improvement is to focus
not just on volume of new contracts won
but on bigger markets, which offer contracts
that promise growth over time. We are
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targeting several markets for increased
attention. In 2015, the main focus has
been on Brazil, Mexico and Canada. So far,
Svitzer Americas has been very successful
in Canada with two new contracts, one in
Port Cartier and one in Baffin Island.
“Winning of first the Port Cartier contract
shortly followed by two fit-for-purpose
ice-class vessels in Baffinland has been a
win-win for both Svitzer crews and Svitzer
Canada,” says Doug Birch, Svitzer’s Chief
Engineer on the Point Chebucto.
With the acquisition of the Brazilian
harbour towage operator Transmar Serviços
Maritimos, Svitzer has also established a
footprint in Brazil. This is the first step for
Svitzer into the Brazilian towage market
and is part of our strategic objective of
growing in emerging markets. We plan to
turn full attention to the Mexican market
later in the year.
LOCAL PRESENCE
These recent successes stem largely from
a decision made 18 months ago to increase
local presence by ensuring that local operations have all-around stand-alone capability,
giving them the ability to manage their
own contract negotiations. “You can’t win
contracts from a regional head office or
Copenhagen alone,” says Martin. “It sounds
simple – even obvious – but the challenge
is actually to do it.” The most important
change was to empower our commercial
colleagues on the ground by ensuring
back-office independence, instead of relying
on commercial resources in a regional office.
This kind of local presence makes it easier
to act quickly and satisfy customer needs.
Success is not a given in any of these
markets. Competitors throughout the
region have very high standards and
many have been in place for a century
or more. In many areas, crewing can be
challenging, as there is often not a large
pool of experienced people to draw on.
We frequently face serious training
challenge, which is why Svitzer Americas
has established a regional training facility
in the Bahamas. “Most recently, we sent
eight Brazilian captains there for training.
The group’s enthusiasm was summed up
by Marcus Silveira, Master of the tug ECO
OCTO. “We needed to be brought up to
speed with Svitzer standards,” he says,
“and the simulator training is a great way
of learning the way a global towage
company operates”.
With a record of strong recent growth,
a solid strategy for increasing local
presence and success in new markets,
it looks as if Svitzer America’s big-league
debut is about to take place.
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MEA
SVITZER MEA
EXPANDING
OUR FOOTPRINT
TYPE OF BUSINESS:
COUNTRIES OF OPERATION:
FLEET:
WORKFORCE:
Terminal towage; some spot towage in UAE;
light offshore in India and East Timor
Angola, Bahrain, Egypt, India, Oman, Qatar, UAE
46 tugs, 34 other vessels
On-shore – 98
Off-shore – 789
In MEA Svitzer pursues multiple
approaches to entering into new
countries and new markets.
The MEA region is a geographically large
and culturally diverse area, with Svitzer
operations spread throughout the Middle
East and Africa, as well as the Indian
subcontinent and Sri Lanka. Recent major
successes in the area include a new contract
for five vessels with Petroleum Development
Oman (PDO) and contract extensions in
Egypt and Qatar. That said, the MEA region
– like the rest of Svitzer – faces an uncertain
global economy. The biggest challenge
throughout MEA thus far in 2015 has been
the impact of lower oil prices on our main
customers, the majority of whom are oil
and gas companies. The first half of the
year was spent renegotiating terms on all
long-term contracts, as these customers
have been looking for significant savings.
14
However, as our cost base is fixed, we have
not been able to offer direct reductions. We
have instead worked with our customers to
identify and implement mutual cost savings
to the benefit of both parties.
But according to Michael Koefoed, Regional
CFO, the major long-term challenge is “to
expand our footprint across the region. The
most important thing for us is to grow and
establish a presence in new countries. With
the oil- and gas-related pipeline having
dried up for now, the focus is to enter
harbour towage markets, primarily in West
Africa and Saudi Arabia, and public-private
partnerships in countries where port infrastructure is owned by the public sector.”
LONG-TERM LOCAL PARTNERS
One of the biggest obstacles to doing so is
regulatory restrictions, which vary from
country to country. Most ports in the
region are protected by legal entry barriers.
In general, Svitzer MEA looks for longterm local partners who can help us
understand the local market and establish
an entrance platform. Our approach is to
appoint a country representative and in
some cases even set up a company before
we have secured business. We have
followed this approach in Saudi Arabia
and Malaysia, where we have identified
strong local partners and agreed on the
main principles for how we will work
together in pursuit of new business. In
Africa, Svitzer is seeking a foothold in
Nigeria, which has the continent’s biggest
towage market but also one of the most
restrictive, requiring that the company
itself is Nigeria owned and that vessels are
Nigerian flagged. We have hired a senior
manager from Maersk to drive business
development and are making use of
Maersk’s many years of in-country
experience. The first tug, the SUPREME
ENDEAVOUR, arrived in Nigeria this
spring, and the immediate outlook for
deployment is positive.
TRAINING AND SAFETY
employ local personnel on-board and
on-shore within a certain time frame. This
can be a significant challenge in countries
without strong maritime traditions and
requires significant training efforts. Svitzer
MEA has already established a strong track
record with training programmes in Angola
and Oman, and was given a Lloyd’s Sea
Trade Award for the training programme
carried out in Angola. Svitzer will continue
to focus on training and has recently
invested in simulator capacity in Dubai
and employed a training master who
will travel to operation sites and carry
out on-board training.
In addition to ownership restrictions, some
countries also have localisation requirements, which means that Svitzer must
This training expertise helps differentiate
Svitzer from competitors and has also
proven more broadly useful, as, for
example, when an Egyptian-trained crew
has been used to help train crews in other
operations outside Egypt. Svitzer MEA is
also differentiated from the competition by
our commitment to safety and our decision
to implement OVMSA standards, which is
particularly important to the oil majors.
The capability to train and develop local
crew, a strong safety focus and the ability
to customise company structures and
solutions to form strong local partnerships
are competencies that set Svitzer apart from
the competition in the MEA region.
15
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WHAT COLOUR
IS AN ELEPHANT?
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Just for fun, colour the animals from
different Svitzer regions around the world.
RUSSIA
USA
EUROPE
SOUTH
AMERICA
AFRICA
AUSTRALIA
WIN A PRIZE!
Colour this picture, then scan it and email to: competition@svitzer.com.
Be sure to include your name and postal mailing address. All entries will be entered
in a drawing, and three winners will receive a LEGO® model of a Maersk Triple E
vessel. Winners will be posted on Yammer and in the next issue of Lighthouse.