Per Sylvester Jensen has plenty of work to do as CEO of Nordic Tankers, a position he took up on February 1st of this year. It is Monday morning, he landed a few hours ago from Houston, and he makes a brief stop at the carrier’s headquarters in Copenhagen’s north harbor before leaving for London in less than one hour.
Most of his work relates to customers these days. Not least nurturing the relations with steady customers, a significant portion of whom are US-based chemical companies, though also the European customers, as a majority of the carrier’s stainless tankers are operating on Northern Europe. “Focus on customers and quality,” as he says.
But the overall priority for the Nordic Tankers CEO is to create solid finances and a black bottom line at the carrier which has been suffering deficits since the new owners, investment fund Triton, acquired Nordic in March 2012. Yesterday, Per Sylvester Jensen was able to present his new executive management team, which includes Thome Ship Management CEO Carsten Ostenfeldt.
Next step is to get the operational aspects geared up, so that by 2015 – though perhaps not until 2016 – Triton’s investment can start paying off.
Gas investments in the US
"On October 15th we’re entering the seventh year since Lehmann Brothers cracked. The shipping industry has been through difficult years, and so has the chemical segment, but now the global economy is doing better overall. 2014 actually started out OK, but it will probably be 2015 or 2016 before we can achieve a profit. But numerous things indicate that developments are going the right way. US growth is doing well. Significant investments are being made in US gas plants, just as the refineries in the Middle East are starting to refine the products more. That’s positive for us,” says Per Sylvester Jensen when he meets ShippingWatch.
He admits that the poor market came as a surprise, even though he has extensive experience in the chemical tanker segment. He joined the company from a similar position at Eitzen Chemicals, with whom Nordic Tankers at one point sat down to look at the possibilities of industry consolidation. But the synergy was somewhat difficult to spot bewteen the two palyers.
The fleet must grow
However, Triton has not lost faith in Nordic Tankers, and the fund has supplied new capital both in terms of ship investments as well as providing the carrier with extra financial padding. Last year Nordic Tankers acquired six modern vessels, and this year the carrier has so far purchased another four. The company’s current fleet stands at 36 owned and 20 chartered vessels in Nordic Tankers’ fleet of smaller chemical tankers of up to 20,000 dwt. Additionally, the carrier has around 45 ships under commercial management and operating in pools.
"We’re looking to grow and to achieve a critical mass in stainless vessels, and we have the support of our owner for this," Per Sylvester Jensen tells ShippingWatch.
Nordic Tankers has invested USD 95 million in new ships alone this year, while Triton has injected USD 60 million of fresh equity into the carrier. And the interest in more ships remains intact.
Ideally, Nordic Tankers’ fleet should consist of up to 15 owned ships in the smaller chemical tanker segment up to 15,000 dwt and 25,000 dwt, respectively, in order to have the right size. And the company is not quite there yet. Add to this the chartered fleet.
Flexibility is crucial
The carrier is working to improve its operations with the same means used by other players in the shipping industry – namely improving the fuel economy and entering the most advantageous contracts. But ultimately, what makes the difference is customer satisfaction, and this brings us back to why the CEO is traveling around so much these days.
"It’s crucial to be able to deliver a quality product, and in order to this we need to have a critical mass that makes us flexible. We have a solid presence in Northern Europe with 10-12 ships that are primarily operating on 15-20 contracts for the major chemical companies. This gives us the flexibility that we want," he says.
He is well aware that Triton has invested in Nordic Tankers in order to make a good business from it, even though the company has signaled that the move represents a long-term investment. But as for many others in the chemical tanker segment, the recovery has been pushed a year, or maybe even two.
"The owners bought their way in when the market was bottoming out. But the low market has lasted longer than they expected," says Per Sylvester Jensen.