The IMO's decision to postpone implementation of the ballast water convention was the lethal blow to Norwegian Oceansaver, says the now-bankrupt company's Chairman and CEO, Kjetil Bruun-Olsen, in an interview with ShippingWatch.
The supplier of ballast water management systems had bet especially on system installations in the retrofit market, but this summer's decision to postpone implementation of the requirements threw a spanner in the works.
Owners started to postpone their decision to install ballast water treatment systems in the fleet of existing ships, the retrofit market"
"The decision from IMO was very disappointing and damaging for the company, because we saw that the owners started to postpone their decision to install ballast water treatment systems in the fleet of existing ships, the retrofit market," Bruun-Olsen tells ShippingWatch.
He had just joined the Norwegian company, where he had been appointed chairman earlier in the year, a position he was scheduled to begin on June 30. But when then-CEO Helle Hundseid resigned in late June, Bruun-Olsen was also named interim CEO for the ballast water management systems supplier.
While he spent the summer getting a closer look into the company through analyses, the IMO decision was announced – backed by countries including Norway – to postpone implementation of the ballast water convention, which means numerous vessels can wait up to two years before installing then systems.
Hired to turn things around
Oceansaver was, in particular, looking toward the market for retrofit installations, but with the IMO decision, the owners – BW Ventures and Norway's state-owned investment unit, Investinor – could wait no longer, after numerous deficit years and losses totaling NOK 800 million (USD 102.4 million) since the company was launched back in 2003."We performed a risk assessment of the whole company to start the turnaround and transformation process and execute the plan over the next 6 to 8 months. The plan included laying off people, around 20 employees, but the owners decided not to invest further in the company, and decided to withdraw," explains Bruun-Olsen, adding that competition in the market also intensified with aggressive moves from competing companies.
"We also analyzed the market and competitors and experienced that the Asian competitors launched an aggressive pricing strategy with significant anticipated price reduction of 30 percent and more."
As just one of four companies in the world, the Norwegian firm had achieved a key type approval from the US Coast Guard, which in effect meant that Oceansaver's system could be used throughout the world.
Seeing as Bruun-Olsen only joined Oceansaver a few months ago, he declines to comment on what he believes the company could have done differently over the years. He also declines to comment on why the company, despite achieving the US type approval, was unable to survive.
A total 70 employees based in Norway, South Korea, and China will be impacted by the collapse of Oceansaver.
Danish Maritime: IMO postponement hurt first movers
At industry association Danish Maritime, which represents Danish suppliers to the maritime sectors, Director General Jenny Braat says that the Oceansaver bankruptcy is just one example of the problems that arise in the sector when environmental regulations – for instance the ballast water requirements – are repeatedly postponed after an implementation date has been announced.
"This will impact the companies that were first movers and which were at the forefront of developments. I believe this is harmful to the maritime sector overall as well as the shipping sphere, as it eliminates opportunities and the companies' initiatives to innovate," Braat tells ShippingWatch:
I believe this is harmful the maritime sector overall as well as the shipping sphere, as it eliminates opportunities and the companies' initiatives to innovate"
"If we don't get demand for these products, we risk seeing that several of the players serving as first movers have to pay the price, while those that have copied some of the existing solutions end up as winners. And this would be disastrous."
She notes that the consequence of the latest postponement of the implementation of the ballast water regulations will, going forward, be an increasing cautiousness in the supply chain, which she says will "likely be more cautious about how much to invest in new technology before they are certain that the regulations will come into force."
English Edit: Daniel Logan Berg-Munch