Lauritzen CEO: Time for Lauritzen Kosan to grow
Several members of the Lauritzen Kosan executive team are currently travelling around, visiting as many as possible of the 40 oil companies that constitute the carrier's core customer group as possible. According to Jan Kastrup-Nielsen, CEO of J. Lauritzen, the visits are aimed at creating a solid and thorough basis for a venture and establishment that includes new investments and new tonnage in the group's gas division.
One of the key reasons for the major losses suffered by the Lauritzen group in recent years was the contracts breached by several Asian dry bulk players. Lauritzen Kosan is a different story, with solid results, even though the company's profits are not ostentatious. But the gas division is the second of the two business units J. Lauritzen plans to actively pursue with direct investments. The last unit is J. Lauritzen's stake in Axis Offshore, which works with accomodation platforms for the offshore industry.
New tonnage in the pipeline
"We're traveling around a lot and talking to customers right now. We're asking them what they might be interested, and talking to them about their needs in the coming years. But there's no doubt that we need to buy new tonnage for our gas tanker segment," Jan Kastrup-Nielsen tells ShippingWatch.
Lauritzen Kosan primarily competes with carriers such as Stealthgas, Unigas, and Epic Gas, which is headed by former Chairman of the Danish Shipowners' Association, Lars Vang.
The goal for Lauritzen Kosan - and for Lauritzen Bulkers as well, really - is to build even closer customer ties and to, as much as possible, sign long-term transport agreements with them.
Crucial ties
"Our value creation is based on employees who can build ties to our stakeholders, who can gain access to interesting data and information, and thus fulfill the customers' transportation needs. You have to understand what the customer values," says Jan Kastrup-Nielsen about the company's goal.
He has now served for approximately one year, after replacing Torben Janholt, J. Lauritzen's former CEO through many years.
The building and strengthening of J. Lauritzen's gas division could be seen as a break from his predecessor's ambitions to let Lauritzen Kosan become part of a larger consolidation in the industry, though with Lautitzen Kosan serving as big brother.
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But Jan Kastrup-Nielsen does not agree entirely with this notion:
"We're keeping the door open for potential partnerships, but right now we're focusing on strengthening Lauritzen Kosan," says Kastrup-Nielsen. He also rejects the notion that the two business units J. Lauritzen will be based on (together with the investment in Axis Offshore) represent a break from his predecessor's philosophy, which stated that a company should have several different units on which to build its business. However, Jan Kastrup-Nielsen feels that size is absolutely crucial. A carrier needs to be big in order to assert itself. And this is why Lauritzen Kosan needs to grow, just as Lauritzen Bulkers.
Had lost focused
But he agrees that J. Lauritzen had become too unfocused.
"Considering how things hit us, the spread had probably become too big," says Kastrup-Nielsen, referring to the fact that the group, just a few months ago, was diversified across dry bulk vessels (mainly Handysize and Supramax), gas tankers, product tank (MR), shuttle tankers, and finally the accomodation vessels co-owned in Axis Offshore, together with Norwegian HitechVision.
The Lauritzen group is 100 percent owned by the Lauritzen Foundation, which has backed the carrier even through the crisis. The owner also supports the two business units the carrier plans to bet on going forward. Asked about when the owner can expect to be pleased with the group's returns, Jan Kastrup-Nielsen says:
"It will probably be 2016 or 2017 before our owner gets truly happy."
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