Odfjell

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Odfjell SE
Type Public (OSE: ODF)
Industry Shipping
Headquarters Bergen, Norway
Key people Jan A. Hammer (CEO)
Revenue USD 1,239 million (2007)
Operating income Increase USD 204 million (2007)
Net income Increase USD (10) million (2007)
Website www.odfjell.com

Odfjell SE is a Norwegian shipping and tank terminal company. The company has its headquarters in Bergen, Norway and is listed on Oslo Stock Exchange.

Odfjell SE today[edit]

Company business is in two parts, the shipping and the tank terminal activities.

The shipping business is managed from the Bergen headquarters, and comprise chartering, operation and ship management. As per June 2014 company operates about 80 chemicals parcel tankers, about half owned by company itself. There are two 49,000 dwt chemical tankers under construction at the Hyundai Mipo yard in South Korea, for delivery during 2014. The chemical tanker fleet operated amounts to abt. 2,25 mill dwt, or 2.5 mill m3 by cargo tank volume, nearly 2 mill m3 being stainless steel tanks. Also operated are three LPG/Etylene tankers, two of them company owned. There are eight 17,000 m3 LPG/Ethylene carriers under construction at the Nantong Sinopacific yard in China, for delivery 2015 - 2017. Ships owned by Odfjell SE use the prefix BOW to their names.

The terminals activities are managed by the subsidiary company Odfjell Terminals BV, Rotterdam, jointly owned 51/49% by Odfjell SE and Lindsay Goldberg. The company owns 10 tank terminals, and cooperates with another 12 being owned by parties related to the company. Owned terminals are located in the US, in Europe, in the Middle East, and in the Far East.

International offices are maintained throughout the world; in the US, South America, Europe, Middle East, Africa, Far East and Australia. Company employs about 3,400 personnel world wide, mariners and ashore.

Company celebrates its centenary in 2014. Chairman is Laurence Ward Odfjell (1965 - ), of fourth generation.[1]

Origins[edit]

The company traces its history back to 1890, when captain Berent Daniel Olsen (1849 -1912) moved to Bergen with his family in order to become part of the (then) modern shipping: Steel hulls and steam propulsion. His three sons, Fredrik (1878 -1950), Abraham (1881 - 1960), and Andreas (1885 - 1968) changed their family name to Odfjell shortly after the turn of the century. The three brothers bought their first ship, the secondhand DS Birk, in November 1914. In the spring of 1915 Fredrik and Abraham Odfjell jointly established AS Rederiet Odfjell, to serve as the corporate vehicle for their shipping interests. In 1916 they bought the secondhand DS Storli, and established the single purpose company Skibs AS Storli as her formal owners. This company is the direct predecessor of Odfjell SE.[2]

Company development[edit]

Initially, company tonnage was solely dry cargo tramp ships. From the early 1930s there was a gradual shift towards liner vessels, in cooperation with French interests. Of more significance for the future was an entry into the small tanker segment during the final years of the 1930s. As Norway became a bellingerent in WW2 in April 1940 the company fleet comprised seven ships, plus two small tankers under construction. These two, and three other ships, became controlled by the occupants, while the remaining four ships became part of the Nortraship fleet, controlled by the Norwegian Government in exile in London. Three ships were lost due the hostilities, 41 crew and an unknown number of German navy cadets perished.

After the war the liner business was reestablished, now between the US East Coast and South America, with two ex-US war surplus ships. These were the first to use the BOW prefix to their names. Of more significance was an increased focus on the small tanker business, leading eventually to the MT Lind of 1960, the world's first tanker with stainless steel tanks, for the acid trade. During the 1960s the dry cargo liner trade was wound down, and by 1970 the fleet consisted exclusively of chemical tankers. Company established its own chartering department in 1963, and its first tank terminal - the TAGSA Terminal in Buenos Aires - was opened for business in 1969. From the late 1960 the company entered a strategic chemicals trade partnership with Bergen shipowners Westfal-Larsen & Co, both for ships and terminals. This partnership lasted to 1990, when Westfal-Larsen was bought out by Odfjell. Apart from joining up in newbuilding programmes for new chemical tankers, they established an operating department (OWL Tankers), and a new tank terminal in Houston, Texas (now Odfjell Terminal (Houston)).

Around the same time, Odfjell entered into the Norwegian offshore oil exploration business, through the establishment of the subsidiary company Odfjell Drilling & Consulting Company, ODCC. This company joined forces with the Norwegian Aker Group to develop the Aker H3 semi-submersible drilling rig, designed to face the harsh environment encountered in the North Sea, and beyond.

In 1980 the company was split in two independent parts, one for each branch of the family: The deepsea chemical tanker business and the tank terminals were taken over by the descendants of Fredrik Odfjell, and soon consolidated into Skibsaksjeselskapet Storli, direct forerunner of Odfjell SE. The small tanker business and the offshore oil exploration business were taken over by the descendants of Abraham Odfjell. S/A Storli went public in 1986, being listed on the Oslo Stock Exchange.

Towards the end of the 1980s conditions in the chemicals trade started to improve. In 1990 Odfjell bought out Westfal-Larsen from the partnership in a USD 280 mill deal. The nine ships involved were quickly sold on to Saudi-Arabian National Chemical Carriers (NCC), who became Odfjells strategic partner within the chemicals shipping trade for the next 15 years. The terminal business bought from W-L was retained by Odfjell. The NCC ships were operated by Odfjell on a pool basis. Together the two partners launched an amitious newbuilding programme for stainless steel parcel tankers, the first being delivered in 1994, and eventually comprising 16 ships. While all ships had so far been for the deep sea trade, in the mid 1990 the company entered the short-sea chemicals trade, eventually establishing regional networks in the Americas, the Far East, and in Europe.

In 1998 the company name was changed from S/A Storli to Odfjell ASA, and new logos adopted - though the tree interlinked rings are retained as the ships' bowmark, signifying the original three Odfjell brothers.

In the early years of the new century the company expanded drastically. First, in February 2000 the company merged with Greek chemicals tanker company Seachem, adding 20 ships to the fleet, as well as a newbuilding contract for stainless parcel tankers. At the time, Odfjell was the world's second largest operator of chemical parcel tankers, and Seachem the fourth. Later that same year Odfjell acquried the Botlek Tank terminal in Rottedam, renamed Odfjell Terminals (Rotterdam). Thereafter the involvement in tank terminals increased rapidly, in Singapore, South Korea, China, Oman, Belgium, and also in the US and in South America.

Serious marine accidents and severe company setbacks[edit]

After the turn of the century the company experienced two serious marine accidents: In 2002 a company ship collided with a French fishing vessel, with the loss of four French fishermen. Then in 2004 the parcel tanker Bow Mariner exploded and sank off the US East coast, with the loss of 21 mariners. This event is company's most serious peacetime marine accident. At the time the ship was managed by a third party.

In 2003 the EU Commission and the US Department of Justice jointly initiated investigations against the company for possible violations of anti-trust regulations witin the chemical tanker industry. Company pleaded guilty rather than risk protracted legal proceedings, and was heavily fined in the US.

In the summer of 2012 serious deficiencies were revealed in the safety systems at the company's Rotterdam tank terminal (OTR). Initially, 5 tanks were shut down, subsequently another 50. Company was heavily finded by Dutch Authorities for breach of safety regulations, and the terminal CEO was fired. Following a complete fact-finding shutdown of the entire terminal, a major upgrading programme was initiated; as per autumn 2014 this programme is still in progress.[3] [4][5]

[6]

Sources[edit]

  1. ^ Odfjell SE company magazine, Odfjell Quarterly, June 2014 issue
  2. ^ "Odfjell - The history of a shipping company" by Atle Thowsen & Stig Tenold,publ. 2006 by Odfjell ASA, ISBN 82-7064-058-1
  3. ^ Newswebsite nu.nl: Controversial tank-storage company partially closed down, 20 July 2012
  4. ^ Odjfjell press-release: Safety shutdown and recoveryplan Terminals Rotterdam, 27 July 2012. Visited: 1 August 2012
  5. ^ Dutchnews: Odfjell closes down more tanks, 26 July 2012. Visited: 29 July 2012
  6. ^ Odjfjell pressrelease: Change of managing Director Rotterdam, 31 July 2012