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 . . 2 P .P. 3 .P. 3 . . 4 P .P. 6 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 . . 7 P .P. 8 .P. 10 .P. 12 .P. 14 .P. 16 .P. 16 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 2 “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!” 3 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 4 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. 5 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 6 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. 7 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 8 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. 9 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 10 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. 11 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 12 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. 13 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 CONNECT WITH YAMMER Stay in touch with the team Join the network – submit your profile today Connect to colleagues – post photos and comments Share work experiences – get inspiration from around the world “Follow” our CEO, Robert Uggla WHAT COLOUR IS AN ELEPHANT? Do you recognize all these animals? 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.