Shipping company Norden has just about reached the final stage of its current strategy plan, which spans 2011-2013, and the carrier was almost able to cross the finish line in terms of the parameters and goals set forth by the company's Board of Directors back in the fall of 2010.
Norden CEO Carsten Mortensen points out that the three-year period turned out to be significantly more challenging than expected when the strategy was adopted.
”Nevertheless, we have by and large reached our goals. This has been done through determined and hard work and through constantly making an effort and a difference in every area which we have been able to control and thereby had the ability to influence. It is true to say that we have not received much support from the market, which has been marked by an oversupply of vessels and historically low rates. Fortunately, we have a long-standing customer base, which we have been able to supplement with new customers," says Carsten Mortensen in the latest edition of Norden News.
In the carrier's latest publication the CEO also reveals a few details about the contents of Norden's strategy for 2014-2016. And one thing that becomes clear is that the carrier plans to invest in additional tonnage:
"We are now looking ahead"
"We are now looking ahead and are applying the finishing touches to a new strategy which will ensure NORDEN’s growth also in the years to come. Continued investments will constitute a significant part of the strategy – you should buy the vessels when prices are low and let them generate profits when the markets are up. In that way, you make use of the fluctuations in a cyclical business. But no matter how attractive the newbuilding prices are, we will not overspend. We still live according to the principle that we can risk losing a deal but we can never risk losing the company. This is a sound principle which ensures that we never lose our touch on reality – not even if we are managing well at sea," he says.
The overall goals of the strategy for 2011-2013 were as follows:
- Tight cost control on shore and at sea
- Increased ECO/fuel efficiency focus on all vessels
- Flexible financial resources to pursue opportunities
- Create higher shareholder returns than peers
- Global leader in tramp shipping
According to Norden, one of the milestones set forth - the ambition to grow by 15 percent a year on the contract market - has not been fulfilled. And in relation to this, head of dry bulk Ejner Bonderup says the following:
”Already in 2012, we saw that many future contracts were fixed at a very low price – with no correlation between tonnage costs and yield. Therefore, we opted out of contracts and thereby also reaching the target of 15%.”
The new strategy will be presented early next year.