1 ODFJELL MARCH 2013
2 Odfjell Quarterly EDITOR: Margrethe Gudbrandsen EDITORIAL COMMITTEE: Karin Ryland Blom, Brit A. Bennett, Matt Duke, Geirmund Drivenes, Leif Gunnar Alvær, Theo Kruithof, Henning Løseth, Siri Anne Mjåtvedt CORRESPONDENTS: HOUSTON: Rebecca Snyder PHILIPPINES: Jennifer Franco Deadline next issue: 10 May 2013 Design: Bruno Blanchard, Cox Graphic production: Sigve Solberg, Cox Print: Scanner Grafisk AS Photo this page: Odfjell Terminals (Houston) Photo by: Steve Chenn Texts submitted to Quarterly may be subject to editorial adjustments. Highlights From cradle to grave 04 Taking Odfjell vessels through their life cycle 06 Landmarks Launching the new stowage system: ORCA 08 Continuing weak chemical tanker market and still significant losses at Odfjell Terminals (Rotterdam) 09 Leading Lady of Noord Natie Odfjell Terminals10 Chairmans message 12 QHSE Ready to combat the pirates! 13 Let your concerns be heard 14 Vessel Visitation Programme 15 Safety culture survey 16 Energy saving campaign CONTENTS Briefings Development programmes in Odfjell 18 Tanks growing and employees starting 20 Windows 7 Project 22 Safety never takes a holiday 23 Sea and shore Visit on board Bow Andes 24 Bow Elm transiting the Magellan Strait 25 Odfjell photo competition with a twist! 26 Personnel Fleet and terminals Offices and addresses 32
3 ODFJELL QUARTERLY magazine Jan A. Hammer, President/CEO Odfjell SE Dear Colleagues, At the time of writing we are almost one quarter into the new year with many of you eager to make 2013 a good year for our Company, at least a whole lot better than At the same time I have sensed from being around at different locations, that the last couple of years have taken a toll on your all's spirit and enthusiasm. I am pleased in that context to let you know that we seem to be on to a better track so far in Our overall performance, particularly in terms of QHSE, has improved, we have made a lot of progress at OTR and not the least, the chemical tanker market, and by that our time charter earnings, have started to move in the right direction. This is encouraging of course, especially since we have worked hard to remain relatively strong and well positioned for better times hopefully to come. Our fleet of chemical tankers for instance, is unique in terms of size and capabilities, but most importantly when it comes to technical standards. During difficult years recently, we have not jeopardized with maintenance and up-keeping. And in the midst of this we have even been able to renew and keep the fleet modern by getting rid of old and obsolete tonnage, acquiring newer second-hand ships and most important, by entering into agreements for construction of new ships. When it comes to our tank terminal business, I can also report encouraging developments, and OTR is of particular interest. I am very pleased obviously, with the fact that we reached agreements last month with the two labour unions and our own Works Council concerning a restructuring and social plan. Only with this behind us have we in reality become able to fully focus on the future and by that, bringing this large, complex and important facility back on track. But equally encouraging when it comes to tank terminals is the ongoing development of new greenfield sites, such as in Charleston and Nangang where tank construction now is under way, expansions at existing facilities and not the least, the many new opportunities we are faced with, in China and elsewhere. This being the case, I am looking forward soon, hopefully, to close the joint venture transaction with Lindsay Goldberg and thus bringing them in as global partners in basically all our terminal business. Together we are going to build a stronger and even more successful terminal business. Also when it comes to our new business segment, Odfjell Gas Carriers, we seem to be on to a good start, although we obviously have a long way to go to reach our ambition to become a major player in this segment. The best part of our story, is that despite the losses we have managed to remain financially strong thus able to pursue new opportunities, allowing us to continue developing our business and Company. Our cash position and gearing for example, are both satisfactory and considerably better than what is the case amongst the majority of our competitors. On the other hand, that does not mean we can pursue everything that look interesting. Hence, one of our most important tasks will be to evaluate and decide what we want and what we do not want to pursue, that being ship acquisitions, newbuildings and terminal projects. Let me be clear on one thing: the good and encouraging development does not mean that we can rest and become less agile, particularly in terms of safety and operational performance. We still have a lot of room for improvements and have made it a goal this year therefore, to bring our QHSE performance to a new and improved level. You will find more about that in this issue of Quarterly. A starting point in connection with our plans to reach this goal is the Safety Culture Survey that we launched earlier this year. The purpose as you know, has been to find out or better determine what are our weaknesses and based thereon, ensure that we initiate the right type of actions. I have just been informed that the response rate ended at more than 90 percent, which is satisfactory. My thanks to all of you who took the time to fill out the questionnaire. Needless to say, I am looking forward next week to be presented with the overall results and from there draw conclusions and action plans. You will also, in due course, be informed, so stay tuned. In sum we seem to be on to a more promising track, but still need to work hard, lift every stone as we say, to find opportunities for improvements and efficiencies, and at the same time ensure that safety comes first in all aspects of our business. Good luck with the continuation! NR.01/ odfjell quarterly magazine
4 Highlights ODFJELL QUARTERLY magazine From cradle to grave By Geir Almestad, VP Project Newbuilding, Bergen and Thorbjørn Haugsand, Site Manager, Korea As a world leading chemical tanker operator, we have a long-term perspective when it comes to the operation and management of our fleet. The long-term perspective means that the life cycle cost of the vessel from cradle to grave is an important and significant factor. Many considerations and decisions made in connection with ordering and building of a new ship are decisive for the cost of operating and managing a vessel. 4 The newbuilding process A typical newbuilding project can be categorised by its different phases. All these phases are important for the completion and finalisation leading to the end-product (the vessel), ready to start a lifetime service with Odfjell. Pre contractual phase Once quotations are received from the various shipyards participating in the tendering process, the quotes are screened based upon price and technical compatibility. We choose a shipyard and after complex discussions with the selected shipyard a Building Specification for the vessels is agreed upon. The Building Specification is the tool used for designing and building the vessel. It contains a detailed description of the ship and its system, and it sets requirements for materials, material protection, functionality, capacities, sizes of equipment etc. Furthermore, it describes how to build and test the vessel before delivery. In a negotiation process with a shipyard we outline all the requirements necessary for a chemical tanker to be operated by us, based upon past experience from our vessels. The results obtained during the negotiation process will be reflected in the Building Specification. Several compromises may have to be done to reach a final agreement with the shipyard. These compromises can be related to cost or to builder s standard way of building which cannot be altered. The overall life cycle cost impact is always considered in such cases. The final Building Specification becomes the foundation for the design and building of the vessels. A well described Building Specification is vital to avoid confusion and One of the newbuildings in progress; the world largest chemical tanker of 75,000 DWT discussions during design stage, in particular to avoid extra cost requested by the shipyard. Design phase The design phase begins after signing the Ship Building Contract, first with the selection of equipment and later the approval of drawings. The shipyard proposes suppliers to Odfjell for the assorted equipment based upon the Maker s List. Within an agreed time frame we carry out an evaluation of each proposal to ensure compliance with the building specification. At the same time each supplier s track record is evaluated for past experiences and future service. Some suppliers may be changed in agreement with the Shipyard. Then all drawings are submitted to Odfjell for approval. The process of evaluating all the drawings is quite demanding and it requires people who have had hands on sailing experience. We scrutinise functionality of systems, material quality (pipes and equipment) as well as capacities of all the assorted equipment on board to check for compliance with the specification. Experience has shown that shipyards do not have much knowledge of chemical tanker operation. Therefore it is necessary to give them as much detailed background information as possible for them to understand how the ships and systems must be designed. Building phase The construction of the vessel starts with the steel cutting at the shipyard, and it is then time for us to establish a Site Team. The Site Team is in principal checking that the vessel is built in accordance with the approved drawings and is built in compliance with the building specification. It is crucial to have a well-qualified Site Team with sufficient personnel to follow up the
5 NR.01/ 13 5 This newbuilding is to be operational in May this year construction of the vessel until delivery, and it makes a significant difference of the quality of the delivered ships. The team consists of inspectors with special competences within assorted fields like steel, painting, machinery, outfitting, electrical etc. The hull surveyors make sure that the vessels are built in accordance with the approved drawings. They ensure that correct welding procedures and welding sequences are followed, and they do welding gap control and structural alignment checking. These are all items that can reduce the lifecycle of the vessel if not done properly. It is of upmost importance that a good coating system for the vessel we specify for both outside hull and cargo/ballast tanks. The performance of the ballast coating system is directly related to the life cycle cost and the life time of the vessels. Today there is a special IMO requirement for ballast tank coating, called PSPC (Performance Standard for Protective Coatings) which the shipyard has to comply with. This is a new requirement from IMO to ensure that the ballast tank coating remains in good condition for at least 15 years. We have for many years applied this standard on newbuildings with good results, for example on the series of eight vessels built at Stocznia Szczecinska Nowa in Poland. The paint surveyors control that the steel preparations are properly carried out and that the paint system is applied according to the specifications. This is very important in areas such as ballast tanks, cofferdams and weather exposed areas. The engine and electrical surveyors follow up the various machinery and electrical installations, where there is typically a lot of testing and comments to follow up. It is essential that all installed equipment are well arranged for future maintenance and easy operation. Delivery Before delivery of the vessel, a sea trial is carried out to conform compliance with the Building Specification and the Shipbuilding Contract. A formal delivery of the vessel takes place when the vessel is ready and when it complies with the Building Specification. The ship then enters into service for Odfjell where she goes on-hire, and takes on the Odfjell experience. odfjell quarterly magazine
6 HIGHlightS ODFJELL QUARTERLY magazine Taking Odfjell vessels through their life cycle By Geirmund Drivenes, VP Fleet Manager, Bergen 6 Our determination to manage and operate both old and new ships at a high level is well established and we continue to maintain that a chemical tanker must satisfy all relevant requirements throughout its lifetime. The main challenge is to define; what is the optimal lifetime for an Odfjell tanker? In order to answer this we face three vital questions. Technically, what is the possible lifetime of a ship? Commercially, what is the maximum age of a ship our customers, authorities and the general public would accept? And from an environmental point of view, at what point in the lifecycle of a tanker does it provide a minimum of resource consumption and environmental strain? Technically From a technical point of view, the lifetime of a ship can be years and beyond. How long a tanker will continue to operate effectively and at a high quality will depend on the maintenance strategy chosen for that tanker. We know that tankers can experience different qualities of life depending on whether or not we give them a midlife upgrade. A midlife upgrade will enable a ship to sail more or less problem free and without need for major investments until the age of years (or until phased out). If we choose not to do a midlife upgrade, the ship will continue to sail fairly well until it reaches approximately 15 years but from then on it will deteriorate much more dramatically, and the usability of the ship will rapidly decline. Commercially The minimum quality standard of a ship is set by classification societies, international conventions, flag state and port authorities. However, the requirements of the charterers may be much stricter. During the last decade, the combined efforts of these parties have raised the minimum acceptable standards. The optimal phase out point would be when the ship becomes commercially and technically obsolete. The challenging task however, is to try and coordinate these two different aspects so they happen at the same time. A ship with a shorter lifetime will have shorter accessible payback time and has to be cheaper Bow Mekka in dry-dock in Bahrain to construct, most likely with lower technical standards. Lower technical standards may mean that the midlife upgrading will be required at an earlier stage than a ship with higher technical standards. As previously mentioned, skipping or reducing the midlife
7 upgrading will cause early deterioration which again may cause charterers to reject using the ship. There are many pitfalls, and clear answers are difficult to establish. Resources and the environment Assuming that the demand for international seagoing transportation remains the same, and that ships continue to have a shorter lifetime at sea, this will result in increase in the number of ships being built. This means more resources will need to be spent on construction (such as steel), on maintenance and last but not least, it will mean a proportional increase in energy consumption to serve these increased demands. Realistically, it is obvious that a greater number of ships impose a greater threat to the environment, with regards to pollution and exploitation of resources. Evaluation of these three aspects has made us conclude that a technical planning horizon of 30 years is the way forward. This has been our conclusion although internationally there are different views. Midlife crisis A term often used in ship management is the term midlife crisis. The term, although not scientifically founded, is a stage in the ship s lifecycle where the maintenance costs tend to increase more than throughout the earlier years. This is also a stage in the lifecycle where major upgrades may become necessary due to the wear and tear of the ship and in order to meet new requirements as increased environmental standards. Normally, the midlife crisis will start when the ships reaches about half the estimated service time, which in Odfjell is 30 years. The challenge in fighting the midlife crisis is to establish the lifecycle of a ship from a longterm preventive maintenance perspective. Taking signs of deterioration seriously at an early stage is essential. If a preventive maintenance programme is established correctly it will reduce the extent of the midlife crisis. In addition, taking action at early signs of deterioration may actually reduce the midlife crisis further. The common denominator is in both cases the preventive maintenance approach. Taking costs into consideration at an earlier stage, will hopefully lead to lower costs (and total lifecycle costs) in the future. fleets that can help to reduce the impact of the midlife crisis. The demands of our markets dictate that ships close to the 30 year old mark have to comply with exactly the same environmental- and quality requirements as new ships. In principle, there is nothing that prevents a ship from being lifted back to as new condition, or even upgraded to better than as new. It is only a matter of how much maintenance and upgrades the owner is willing to spend on his ship. To implement technical upgrades as necessary to meet the new requirements during the vessels life cycle, we established a Technical Change Management concept in Likewise, as scheduled dry-dockings are one major activity used to lift the standard of the ships, we are focusing on improved management of the dry-docking process. However, as the ships have scheduled dry-dockings only every 2.5 years 5 years, the availability of the ships are limited. This means to a certain extent that we may need extra fitters who are able to do repair jobs while the vessel is trading. Should we invest in mobile fitters that are available to support the execution of a life cycle maintenance programme for the ships, or shall we assume that the sub-contractors at any time have the skills and competence we need? The needs might change rapidly and establishing competence internally takes time and the decision to do so must consequently be taken at the right stage. The ultimate challenge is to find the right balance and we are continuously striving to improve our processes to meet the rapidly changing requirement and at the same time maintain a life cycle perspective as an industrial player. The end of the lifecycle: Recycling After ending their duty on the seven seas, many Odfjell ships will be sold for recycling. Several initiatives are in place to secure a good recycling process. Green Passport We have established a programme to obtain Green Passports for all ships to be recycled in order to ensure a good and controlled process. This is a programme that is certified by Lloyds and meets all requirements and expectations of IMO Resolutions A 962 and 179 regarding recycling of ships. The programme requires us to map all potential hazardous materials and conditions that can impact the environment and working conditions, and it requires that the recycling yard follows the same IMO guidelines when handling such materials. Choice of recycling yard Different recycling yards are of different quality. Before choosing a yard, Odfjell inspect the yard to make sure that it complies with the International Maritime Organisation s (IMO) guidelines for recycling and our own requirements including ISO certification by an independent body like DNV, Lloyds, etc. In our contracts with the yards, there is also a clause requiring that they shall follow the IMO guidelines. NR.01/ 13 7 Considering the fact that we have vast experience in the operation of ships of various ages, it is clear that we now have a unique chance to establish an overall programme for the odfjell quarterly magazine
8 Landmarks ODFJELL QUARTERLY magazine Launching the new stowage system: ORCA By Leif Gunnar Alvær, Manager Projects and Training, Bergen What is your impression of ORCA? 8 Print out of the storage plan from ORCA On 31 January 2013 the development of the new Odfjell Tankers stowage tool ORCA was completed. The first deployment was successfully launched for operators in Bergen on 6 February. Currently the system is being rolled out on our fleet, and we expect that within the second quarter of 2013 the system will be available on most Odfjell Tankers operated vessels. It is our intention that all vessels operated by Odfjell Tankers shall use the system within We have, and will continue to have short training sessions in order to familiarise the users with the system. The stowage system will be available for Operators, Vessels, Port Captains, Port Operators, Supercargoes and other users with an interest in stowage related issues. Scientific view on the project During the development of the stowage system, we have focused heavily on the experience from the point of view of the user. We have therefore included representatives from both the vessels and operation ensuring that the system works the way it should. Throughout the project a PhD student has also been following the process as part of his thesis. He is focusing on user involvement in ICT-system development. It is not often one sees a company that is so rigorously focused on software usability. Having followed the development process of ORCA, where the importance of implementing the user s daily activities is so crucial that the developers actually moved in with the users, it will be an exciting spring in 2013 when the software is ready to fly, or more likely, sail, says Sturla Bakke, PhD student. The first version of ORCA contains the following features: - Manual stowage plans can be created without external data - Intuitive and user-friendly interface drag and drop, fully customisable layout - Rotation list ports and berths with easy possibility to change rotation. - Operation list detailed cargo operations (loading, unloading, transit, transfer) and port activities, fully customisable Tank plan customisable tank contents, ship figure, arrival and departure conditions, 10 different filters Ship utilisation displacement, deadweight and volume (max, used and available) Trim, list and draft calculation 14 types of manifests and reports Functional checks (more than 20 different types of violations) For questions regarding the stowage system, please use Torbjørn Røsland, Ship Operator, Bergen Odfjell has managed to create a tool with all the relevant needed functions, and at the same time it seems to be really user friendly. It is quick and easy to use especially when you try to add various scenarios with the cargo program and cargo intake. Tentative cargoes, which are not yet in our system, can easily be added or deleted within seconds. This is very efficient in the planning process, and I believe this can reduce the feedback gap between us and Charterers. In my opinion, the next stage will be to see how ORCA will handle the communication between vessel and office, and how it will become the main stowage tool also on board. Karl-Henrik Persson, Chief Officer, Bow Summer The new stowage system ORCA is a good tool with many useful features. ORCA gives the user multiple options with regards to presentation of data and generating reports. The overall impression so far is very good. Ina Taule, Ship Operator, Bergen ORCA is easy to understand, easy to work with, easy to move from area to area and user-friendly. It is a good combination between Super Cargo and Othello. Raymond Gjendemsjø, Chief Officer, Bow Mekka As I have been involved in the project more or less from the beginning, I have witnessed the long process it has taken ORCA to get where it is today. With all the experience within the project and all inputs collected form test vessels, ORCA has become a more complete solution for stowage simulation on board/ ashore. Planning port rotations on board in collaboration with the operator has become easier and less time consuming.
9 Continuing weak chemical tanker market and still significant losses at Odfjell Terminals (Rotterdam) By Terje Iversen, CFO, Bergen EBITDA of USD 17 million reflects both a continued weak chemical tanker market and still significant losses at Odfjell Terminals (Rotterdam). The chemical tanker market improved seasonally towards the end of the year. Volumes shipped remained on par with the previous quarter. Earnings on a time charter basis were up 7.8% compared to third quarter. Freight rates per tonne shipped increased by about 10%. The average price on bunkers purchased in the quarter remained high. In fourth quarter, with the exception of Odfjell Terminals (Rotterdam) (OTR), the EBITDA for our tank terminals remained on par compared with previous quarter. In December we announced that we had signed of a Letter of Intent with Lindsay Goldberg LLC to expand the existing joint venture to essentially include all of our tank terminal business. The proposed transaction will significantly increase the capitalization of the tank terminal division and will enable us to jointly embark on an ambitious and accelerated growth strategy. OTR has reached agreements in principle with the Unions and the Works Council with the objective of finalizing the negotiations regarding downsizing and reorganisation of the work force. The re-commissioning project at OTR is slightly delayed relative to earlier plans. 717,000 cbm is approved for usage per end of January We now expect 1.2 million cbm to be available for commercial use by end of Q The supply/demand picture within the chemical tanker segment continues to move in our favour. However, favourable yard prices and modern fuel efficient designs may lure investors to contract new tonnage. The supply overhang, on the other hand, may be prolonged due to reversal of lost capacity through slow-steaming and low utilisation. Our main concerns relate to challenging markets also in 2013, high fuel costs and potential setbacks in the global economy. On the tank terminal side we have witnessed higher activities and inquiries for storage. We expect improved earnings in our tank terminal division in the first quarter of ,800 cbm expansions at OTH In February the Board approved an expansion of a new tank bay of ten stainless steel tanks with a capacity of 30,800 cbm at Odfjell Terminals (Houston). At the time of writing, OTH has started the engineering phase and once the Air Permit is given by the Texas Commission on Environmental Quality, the construction will start. The construction is expected to take approximately months and the new bay tank operational in Q New liquid jetty at Port of Sohar Source: Oman Daily Observer Port of Sohar plans to build a new liquid jetty to cater for an anticipated rise in liquid cargoes handled at the industrial port, fuelled in large part by a strong uptake of bulk storage capacity at the central tank terminal operated by Oiltanking Odfjell Terminals & Co (Oman) (OOTO). The new jetty, designed to cater for product tankers of up to 120,000 DWT, will further reinforce Sohar Port's standing as an emerging liquids hub at the entrance to the Middle East Gulf. OOTO has seen the capacity of its tank terminal grow by leaps and bounds since its launch in Starting with 842,500 cbm of storage capacity at launch, the terminal was expanded shortly thereafter to cater for 425,000 cbm of new capacity. In July 2012, OOTO brought a further 27,300 cbm of new capacity into operation, taking its total capacity to a world-class 1,297,800 cbm. - There is a lot of demand for the services of OOTO, very likely because of the location. They have a lot of plans to expand. But while they can look at expanding on the landside, we would also need to cater for the growth in vessel calls, Edwin Lammers, Executive Commercial Manager, Port of Sohar said. The new jetty is expected to be brought into operation in early Oiltanking Odfjell Terminals (Oman) NR.01/ 13 9 odfjell quarterly magazine
10 Portrait ODFJELL QUARTERLY magazine Leading Lady of Noord Natie Odfjell Terminals By Margrethe Gudbrandsen, Communications Manager, Bergen the role still remains exciting and interesting, says Martine. 10 Noord Natie Odfjell Terminals Almost three quarters of a year has passed since we joined forces with Noord Natie Terminals and we feel it is about time we introduce the woman behind the terminal in Antwerp, Managing Director at Noord Natie Odfjell Terminals (NNOT); Martine Teeuwens. Noord Natie Odfjell Terminals is now a joint venture between Noord Natie (75%) and Odfjell Terminals/Lindsay Goldberg (25%). The first tanks were built in 1950' and 75% of the shares are owned by private Belgian residents. Martine has been working at the terminal since Noord Natie used to be one of the biggest terminal operators in Antwerp with container terminals, terminals for general cargo and commodities, she explains. These activities were sold in 2002 except for the tank terminal, which represented 5% of the company and remained with the existing shareholders. When I started working with Noord Natie the tank terminal was a well-kept secret! Although it was not very well known it did have many long-term customers. It was actually a coincidence that I started working at the tank terminal division. I have been climbing the ladder so to speak. I was being trained on all the activities at the terminal, but at a certain moment the director who was responsible for the tank terminal needed assistance and I became Assistant Commercial Manager. I went on to introduce a quality and safety system with consultants and developed our first order processing computer system with the IT department. Later I became Commercial Manager. In 1996 my boss retired and I became General Manager for the terminal. In 2000 I became Shareholder and Managing Director. I would not want to change where I am today. Even after 23 years, Fast Facts. 300,000 cbm (+ 50,000 cbm expansion ready end 2013/early 2014) 230 tanks 12,5% ownership (Odfjell) Storage of chemicals, base oils and other mineral oils, biofuels, animal, vegetable oils and fats and oleochemicals 115 employees Strategy of growth The terminal initially started operation with seven tanks with a total of 10,000 cbm. It has subsequently expanded +/- every 10 years. Before Christmas 2012, another 50,000 cmb expansion plan was announced for the terminal; a two phase project where Phase 1 (25,000 cbm) is estimated to be completed by the end of 2013 and Phase 2 (with the next 25,000 cbm) aiming to be ready by end of Q The main products for the terminal are base oils and glycols but the terminal offers storage for a broad range of other chemicals. The terminal has a mix of contracts starting at one year up to five years as well as spot contracts. You also have new land available, when do you plan to expand into this area? There are plenty of land available for further expansion for a minimum of 100,000 cbm storage capacity. This is something that is on the planning stage at the moment, she states. NNOT has 115 employees at the terminal and had 303 vessels and 577 barges calling the terminal in You have been in operation for a long time. What makes the terminal so successful? In addition to our expansion strategy, our main advantage is that we are very well located. We are almost completely surrounded by water and thus have many different berths for seagoing vessels and separate berths for barges. In addition, we also have good transit times for trucks as we can also be reached via rail. As well as our excellent infrastructure, our success is also down to the fact that we have a very experienced and flexible team of colleagues working at the terminal, she says. Safety a high priority The terminal has a strong focus on safety and aims for high QHSE standards. QHSE is incorporated into everything, everywhere and at all levels at the terminal. We put a lot of care into the training we give our staff and regularly repeat these trainings sessions and update them on a regular basis. We are constantly running terminal tours and observations by people from different departments. Our
11 NR.01/ The Management Team at Noord Natie Odfjell Terminals. From left: Patrik Bosmans, Manager Dangerous Goods and Health & Safety Coordinator, Bart Orban, Technical Manager, Martine Teeuwens, Managing Director, Heidi Deumens, Quality Coordinator, Annick De Blende, Environmental Coordinator and Geert Heirbaut, Technical Advisor and Luc Costers, Sales Coordinator emphasis is on motivating people to continuously have awareness for all aspects of QHSE, says Martine. Joining the Odfjell terminal network Since June 2012 Noord Natie and Odfjell have been partners, how have you experienced the partnership? We are happy that we have joined the Odfjell network of terminals and shipping contacts. It means we will be able to work together to further develop our activities and hopefully bring new contacts to Odfjell too. Name: Martine Teeuwens Positions: Managing Director Nationality: Belgian Experience: 23 years at Noord Natie Interesting business After 23 years at the terminal Martine still thinks it is a very interesting and fascinating business. - There are always changes, different products, customers, changes in regulations, new technologies etc. As Managing Director I am involved in all aspects of the business, it never gets boring! You meet a lot of people from different types of organisations, from small traders to big companies, people from different backgrounds, countries, etc. You provide solutions, work out procedures with your customers and I am glad that I work with a very good team that runs and operates the terminal. There is never a dull day at work, concludes Martine. odfjell quarterly magazine
12 Chairmans message ODFJELL QUARTERLY magazine 12 Dear all, Laurence W. Odfjell In February we posted the results of Odfjell for the year 2012 and this was our fourth year in a row of producing losses in shipping, so this was, indeed, another disappointing year for Odfjell, for our employees, our business partners and our shareholders. Notwithstanding our losses, foremost in our minds, has been the situation at Odfjell Terminals Rotterdam (OTR) where what we now see as many years of substandard performance, led to our decision to effectuate a safety shut down in July last year. Our colleagues in the Netherlands are now well into the process of recommissioning the terminal as they are diligently and systematically bringing the facilities safely back into operations. In connection with the safety shut down and what led up to it, I was recently interviewed by the Dutch Safety Board certainly a moment to reflect upon what went wrong and why. Quite frankly, I believe there are lessons to be learnt for Odfjell in a broader context than OTR, and we will evaluate this going forward, especially as we aim to step up to a proactive safety culture at sea and at shore. In fairness to many employees in our many different units around the world that already have been working towards or achieved a proactive safety culture for years now, I would like to express my appreciation for this mindset and work, especially because your success as frontrunners will help the whole organisation improve. Six months prior to the safety shut down, the Supervisory Board of OTR engaged a reputable independent institute called TNO to conduct a study on the systemic causes behind the many incidents at OTR. The results of this study were presented in October last year and were used as input for the reorganisation plans of the terminal in Rotterdam. There was one finding by TNO that I would like to highlight now, because I feel its cause could be based on possible misunderstandings by some Odfjell employees and this therefore requires clarification: TNO found that OTR had been too flexible in attempting to please our customers, that we had been driven by sales. In this pursuit, we have arguably sold services we were not fully fit to perform, either from a safety or from an efficiency/reliability perspective, thus leading to disappointed expectations, at best. In short, we were 'too commercial'. Let me first reflect upon what is commercial in the context of our business of handling hazardous products. Odfjell is obviously a commercial enterprise that sells services to many different customers around the world. In our business model for shipping, we have always been willing to take significant commercial risk by exposing ourselves to the volatility of the spot market and chartering wise operating within a rather short-term contractual perspective. This has been our operating philosophy for perhaps 40 plus years and is ingrained in the way many Odfjell employees think and act. In our business model for terminals, we are often less spot oriented because our services are intrinsically bound to location and some of our customers consider us almost an integral part of their supply chain management. But the common denominators between shipping and terminals are that we sell services where we 1) handle hazardous products and 2) we need to do so in a safe, reliable and efficient manner. It should be pretty obvious that it is hardly commercial to sell services that we are not able to deliver in a safe, reliable and efficient manner. In addition to our responsibility to all stakeholders in terms of safety, let me remind you of how difficult it is to regain trust with any customer after failure to deliver. In other words, a potential short-term gain on a contract can easily lead to a long-term loss of opportunity. With our customer base of blue chip companies with determined focus on QHSE, our reputation forms part of our 'license to operate'. Some may consider safety measures as measures that add cost to operations, but we see that proper safety mindset, planning and measures reduce cost and enhance performance. Also, safety is good business simply because our reputation and balance sheet can ill afford costly incidents. Let there be no doubt therefore: employees of Odfjell are not working with the right commercial mindset if he or she is taking shortcuts on safety to either please our customers or in the belief that such shortcut will help our bottom line. It is ill conceived to be 'driven by sales' if this means taking uncalculated risks... this is hardly commercial, but rather gambling. Let there be no doubt, our customers do not want us to make shortcuts that compromise safety when they ask us for late changes or request us to perform a new service, etc. So-called commercial pressure will always exist, but our customers always expect us to find solutions within safe boundaries. They expect us to know our safety parameters. And this should be our modus operandi. To be sustainable in the long-term, we need to sell and deliver services to our customers year after year with personnel, processes and equipment that are fit for purpose. There are no shortcuts to deliver such fit for purpose performance we need the right assets, process management, and expertise. All three dimensions require both investment and care. We can and need to be commercial, indeed. But with a mindset based on the values embedded in our Mission Statement and founded on the collective know-how and expertise that our organisation possesses unique in combining experience from sea and from shore. I overheard recently that our heroes are the officers that turn the ships quickest around in port, in other words, those who can perform most efficiently (implicitly at any risk). Let me be clear on this as well: Safety and efficiency are not contradictory forces with the proper planning, mindset, assets and competence, we can turn ships around efficiently in port, with no compromise on safety. The basic prerequisite here is the right competence, combined with the right mindset. Both are required. Those who possess both are and should be our 'heroes', at sea and at shore. In light of the above, I was very pleased to note that management has taken the initiative to perform a survey to measure our safety culture at sea and shore. This survey will identify our strengths and weaknesses, so we can focus on implementing the right improvement measures and strengthening the safety barriers identified as weak. It will also show us whether safety and ensuring safe parameters for operating truly are our number one priority. Stay safe.
13 Qhse ODFJELL QUARTERLY magazine Ready to combat the pirates! By: Nina Blågestad, Cox and Margrethe Gudbrandsen,Communication Manager, Bergen NR.01/ The Norwegian Navy will be in charge of the NATO anti-piracy force from June 2013 Desember 2013 and will be present in the Gulf of Aden with a frigate Photo: Vegard Grøtt/Norwegian Armed Forces Precautionary methods to prevent piracy have been a success as the number of reported Somalia based piracy attacks has halved compared to that of last year. However, despite this success, the Norwegian Shipping Association has recommended not to lower the guard. We are delighted to report that compared to last year the number of piracy attacks has halved, says Haakon Svane, Head of Contingency planning at the Norwegian Shipowners Association. Successful measures now in place Even though 5% of the ships passing through the Gulf of Aden are Norwegian, only 1% of the captured ships are actually controlled by Norwegian companies. According to the Norwegian Shipowners Association this is not coincidental. The industry has put several measurements into action to reduce the chance of getting hijacked, such as barbed wire to prevent pirates entering the vessels, water cannons, better training and increased knowledge of where the pirates are operating. In addition, one of three ships use armed guards during transit of high risk areas. During the last year one Odfjell vessel experienced a suspicious approach in Bab al Mandeb. Best Management Practice was immediately initiated and these measures successfully prevented the approach. Military presence Military presence has also had a positive effect. In October, the Norwegian government announced that the Norwegian Navy will be in charge of the NATO anti-piracy force from 2013 and will be present in the Gulf of Aden with a frigate. All these measurements have had a positive effect. However, they have not solved the root cause of the piracy problems in this area. Somalia needs to be able to control this themselves and this will require political stability and most likely also significant investments. And we are still far from seeing a locally based permanent shore solution to the piracy situation, says Hans Sande in the Norwegian Maritime Officers Association. Haakon Svane, Head of Contingency planning at the Norwegian Shipowners Association. odfjell quarterly magazine
14 Qhse ODFJELL QUARTERLY magazine Let your concerns be heard By Margrethe Gudbrandsen, Communication Manager, Bergen To lower the threshold for contacting the Designated Person we have established a Designated Person Assistant in our office in Manila in addition to the Designated Person Ashore (Toralf Sørenes, SVP QHSE) at the headquarter in Bergen. Toralf Sørenes also functions as the Company s Compliance Officer for shore-based personnel. 14 We experience an apparent higher threshold for Filipinos to report concerns to management in far-away Norway. The Designated Person Ashore is an important safety valve though which anyone can report malpractices. Very low reporting has indicated that our arrangement has not been optimal. To improve we have assigned an assistant locally in the Manila office, says Toralf Sørenes. The messenger In addition to her position as Head of Crew & Family Affairs, Agnes Enesio is now also assigned to be the Designated Person Assistant at Odfjell in the Philippines, reporting directly to Toralf Sørenes. I call myself a messenger because I will serve as the link between Filipino Officers/Crew and the Designated Person Ashore. As a messenger my job is to listen to what you say, to hear your complaints, concerns or comments and make sure that same is brought to the attention of Sørenes, says Enesio. Agnes Enesio To raise concerns is challenging Many of us find it challenging to raise concern regarding malpractice. But raising concerns is the only way to avoid malpractice in the future and thus contributing to securing a safe, reliable and sustainable working environment. Having such matters brought to attention of the management enables necessary action to be taken to limit or eliminate consequences Toralf Sørenes and thereby prevent similar malpractice from reoccuring in the future, explains Sørenes. The Designated Person Ashore and the assistant are ready at any time to hear your views and concerns. With the established position in Manila, crew may now also raise concerns in their own language, that being Tagalog, English or Norwegian. Fast facts: Designated Person Ashore Odfjell has a Designated Person Ashore to provide a neutral link between those on board and the Company. This person ashore shall have direct access to the highest level of management and all messages are treated confidential. The responsibility and authority of the designated person or persons should include monitoring the safety and pollution prevention aspects of the operation of each ship and ensuring that adequate resources and shore-based support are applied, as required. Contact details: Designated Person Ashore/Compliance Officer Designated Person Ashore Assistant Toralf Sørenes, SVP QHSE Agnes Enesio, Head of Crew and Family Affairs Tel.: / Tel.: /
15 Vessel Visitation Programme: - To strengthen open and honest communication among Filipino crew By Jennifer Franco, Information Officer, Manila The Vessel Visitation Programme form a part of OiP s endeavor to improve open and honest communication among Filipino crew. President Gilbert Pili, Project Manager, Captain Remigio Zamora and Odfjell Academy Head Chief Engineer Leo Gegajo of Odfjell in the Philippines (OiP) have been joining Odfjell ships to conduct open forums and one-on-one interviews with Filipino seafarers in their native language. The discussions and interviews the Senior Managers have with the sailors focus on Odfjell s Code of Conduct, reporting of violations and noncompliance as well as other concerns on board. In these visits, meetings with the Shipboard Management Team (SMT) are given ample priority. - We believe effective leadership on board is key to if we want to encourage the crew to maintain open and honest communication. It is important for our SMT to fully understand this, Pili explained. So far, the visits by the Senior Managers have been met by the seafarers honesty and openness in relaying their concerns and challenges, according to Captain Zamora. Whilst feedback from the crew remains confidential, Captain Zamora assures us that these will be relayed in reports and will be addressed properly by the right personnel and channel. This project will continue to help move towards a positive cultural change on board. One of the main aims of this programme is to lower the threshold for reporting, wherein our seafarers are not afraid of reporting malpractices, violations and noncompliance. We want to change people s perception that reporting will have a negative consequence for them personally and professionally, Captain Zamora added. The Vessel Visitation Programme aims to conduct visits to all Odfjell vessels by the end of It is in addition to the efforts conducted by the Ship Management Division, such as the RD 12 Programme and vessel visits from the fleets. NR.01/ Planting the seeds of safety culture: Bow Tie Model lecture for Odfjell cadets By Fortunato Lim, Jr., Chief Mate, The Philippines Stop Work Authority cards were distributed to reinforce the information campaign about Odfjell's safety message Odfjell Academy in collaboration with the Odfjell-Bacolod Cadetship Programme team held a Bow Tie Model lecture for 69 Odfjell cadets at John B. Lacson Maritime University (JBLMU) Bacolod on 12 December. Chief Engineer Leo Gegajo, Head of Odfjell Academy, said that the lecture is an important initiative to introduce Odfjell's proactive safety culture to the cadets at this early stage in their career with Odfjell: - These cadets are our future officers. We should mold them while they are young to instill the values required by Odfjell. The Bow Tie Model odfjell quarterly magazine
16 Safety culture survey By Toralf Sørenes, SVP QHSE, Bergen In mid-february Odfjell initiated a safety culture survey aimed at the shipping activities and related staff functions. The main focus is on cultural issues and the objective is twofold. Firstly to uncover if there are any QHSE related areas that need special attention and secondly to benchmark ourselves against other shipping companies. Viewed over a period of 6-8 years, some important QHSE areas like Lost Time Injuries Freqency and Insurance have developed positively. We have, however, recorded several accidents and near accidents lately. An important element in our QMS system is to identify and act on near-accidents. It is very important that we maintain our high focus on QHSE and continuously look for new areas that may need attention. The results from the survey will be analysed and evaluated before measures are implemented. The result from the survey will be ready in April. 16 Revised QHSE corporate documents By Toralf Sørenes, SVP QHSE, Bergen Over the last couple of months we have been revising and updating four key corporate documents; Health, Safety, Environmental & Social Responsibility Requirements, Corporate Quality Management Requirements, Scenario Based Risk Assessment and Event Reporting & Handling in Odfjell. These four documents are setting some of the corporate standards with regards to underlying QMS documentation and will be used during the 2013 corporate audits. The documents have been significantly revised and made more proactive and also clearer with regards to the distinction between mandatory corporate requirements and recommendations. We will consider a fine-tuning of the documents towards the end of the year based on input we receive during audits and reviews. It is important that the documents are circulated to relevant personnel within the units. The documents are to a great extent based on the Hearts & Minds methodology. You Increasingly Informed may have heard the phrase Safety Ladder and Glass Ceiling. Our aim is that all units in Odfjell shall be above the Glass Ceiling which is above the Calculative level in the Hearts and Minds Safety Ladder. GENERATIVE HSE is how we do business round here PROACTIVE Safety leadership and values drive continuous improvement CALCULATIVE We have systems in place to manage all hazards REACTIVE Safety is important, we do a lot every time we have an accident PATHOLOGICAL We cares as long as we re not caught Increasing Trust and Accountability The Safety Ladder based on the Hearts & Minds methodology. Where are we on the scale and how can we improve? So the core question we will ask is; where on the scale are we now and how can we improve?
17 Qhse ODFJELL QUARTERLY magazine Energy saving campaign 2012 Three winners for attitude related suggestions By Margrethe Gudbrandsen, Communication Manager, Bergen The energy saving campaign, which was launched in September 2012, has provided valuable input on how further energy optimisation can be realised in our Company. It was a challenging task for Odfjell Environmental Council to select the best proposal with the criteria; easy to implement with high outcome. There was many discussions, check points etc., and finally it was concluded to share the winning prize between three proactive attitude related proposals. The winners are Ingmar Seth, Chief Engineer on Bow Firda, Erik Hjortland, Manager Fleet Performance, Bergen and Eyvind Bremseth, Newbuilding Surveyor, Bergen. The three winners will share the prize of USD 10,500. It is all about attitudes During the last couple of years, we have implemented a number of technical and operational improvements to reduce our energy consumption and emissions. However, the majority of the proposals this year were related to change in our attitudes and those that suggested the most comprehensive and relevant solutions to energy saving were picked as this year s winners. Saving energy on board Ingmar Seth proposed several activities on how to save energy on board. The proposals were well documented with energy and cost savings and contained examples like the efficient use of hydraulic aggregates, unnecessary use of fans and switching off the lights etc. The examples contained well documented figures for potential savings for one ship and can easily be applied to our entire fleet. By demonstrating this it s easy to understand the win-win-principle both for the environment and for Odfjell. Green card Eyvind Bremseth suggested introducing a Green Card programme for the daily work. Actions and ideas can be stated on a green card showing how we can reduce our daily use of energy. The card can be a simple form that reminds and motivates each individual employee to save energy and in turn protect the environment. Even though his initial proposal was to introduce this programme on board our ships, the proposal can be amended to also include the offices and terminals. Energy management Erik Hjortland suggested formalising specific energy management training for seafarers. The goal is to increase energy awareness among ship crew and to demonstrate Odfjell s expectations and best practice in terms of energy management and energy saving on board. This idea can also be expanded to include all management training in the Odfjell Group. Long-term effects Improvement resulting in energy saving may be more specific when introducing technical modifications as opposed to proposing new changes in attitude. However, introducing proposals supporting a change in attitude with focus on training and improving daily routines will assumable provide more longterm effects. For any organisation change of attitudes take time and we all have a responsibility to adapt an energy friendly approach as part of our mind-sets. The winning suggestions are promising examples in which we can change our mind set towards a more energy saving one. October, November and December winners In total, 43 proposals were received during the campaign. 25% of these suggestions were awarded with USD % of the total proposals were related to change in human attitude and this tells us that we all can do small things in our daily lives to reduce energy saving. Although this will have the biggest effect on board our vessels, it will also have a substantial effect on our terminals and offices. Easy targets for saving energy Many of the proposals submitted were related to attitude where activities and actions are easy to implement and have a promising potential savings impact both for the environment and with regards to the costs for Odfjell. The Odfjell Environmental Council appreciated these proposals and will present a summary of these proposals in the next issue of Odfjell Quarterly. Winners of the Energy Saving Campaign 2012 Jan A. Hammer and Ingmar Seth Jan A. Hammer and Eyvind Bremseth Erik Hjortland The monthly winners during the campaign were: September winners: Erik Hjortland Ingmar Seth October winners: Ingmar Seth Rune Larsen November winners: Ashok Nair Jone Abotnes December winners: Erik Hjortland Stuart Scott Eyvind Bremseth Kim Høidahl NR.01/ odfjell quarterly magazine
18 Briefings ODFJELL QUARTERLY magazine Development programmes in Odfjell By: Jennifer Franco, Information Officer, Manila, Gerald Thomas, Operation Manager, Bergen, Leif Gunnar Alvær, Manager Projects and Training, Bergen and Henriette Vartdal, Coordinator Competence Development, Bergen 18 Throughout Odfjell there is a continous focus on learning and competence development. Two of the programmes currently being undertaken are the Leadership and Followership Development Programme in the Philippines, and the Odfjell Tankers Trainee Programme in Bergen. Leadership and Followership Development Programme - Odfjell in the Philippines The Leadership and Followership Development Programme (LFDP) is a sequel to the Leadership Development Programme (LDP) initiated by Odfjell in the Philippines (OiP) in March LFDP was rolled out for Coordinators, Crewing Assistants and Senior Crewing Managers in OiP. Another programme called the Followership Development Programme (FDP) will be conducted for the rest of the personnel. The programme focuses on giving the participants an increased knowledge and understanding of leader- and followership theories together with their practical implications. The main themes for the programme are increased knowledge of Odfjell (history, organisation, policies, procedures and strategic business model), cultural differences in a global organisation, important leadership qualities and teambuilding. The LFDP for shore staff is delivered on a weekly basis and consists of presentations, discussions and video call sessions. Managers from other Odfjell offices have been invited to share leadership perspectives and set the stage of learning for the participants over the 14 weeks which is the duration of the programme. The LFDP aims to be an important vehicle for synergy that will help facilitate effective leadership and followership in the organisation. LFDP for seafarers Going forward, a customised LFDP will be conducted for all Odfjell seafarers within Based on the structure designed by Vice President Maritime Personnel Section Tore Henriksen, the LFDP for seafarers will be a module-based training, conducted at various levels and positions to facilitate learning throughout the seafarers career with Odfjell. This will include expansive retrospective training sessions. The programme aspires to be a catalyst in aligning behavioural norms and practices with Ship Management Division s core values. The LFDP for both shore and ship personnel, according to Henriksen, is an important undertaking that reinforces adherence to Odfjell s organisational culture. - Organisational culture can be simply defined as the way we do things. If we accept this definition, then it is important for any company to try to regulate the organisational culture. In order to influence the organisational culture, we have identified that both leadership and followership are important. We need to communicate this message to our employees so they know the expectations of the Company, says Henriksen. respectively. Currently, Odfjell Tankers have three trainees. One of the trainees is working on the chartering side of the business, whilst the other two are working in operations. All of the trainees have completed a BSc (hons) Degree in Maritime Business from The Solent University in Southampton. The programme started in November 2012 and is intended to last one year. Odfjell believes that the combination of young professionals with fresh academic knowledge and the resources contained within the organisation will expand our pool of skilled and motivated employees. The trainee programme is divided into three parts. Their first few months will include internal and external courses in all aspects of chemical tanker operations. At the same time, the trainees will gain hands-on experience in operations/chartering. The second period includes a stay at one of our overseas offices, and a stay on board a vessel under Ship Management. The last trainee period will be spent in Odfjell s head office, where they will work as Ship Operators and Broker. During this final part of the programme they will also spend time with Ship Management. When the programme is completed, the trainees should have a broad and good understanding of most aspects of Odfjell s organisation and business. The trainees are provided with mentors that guide and assist the trainees throughout the period. According to Svend Foyn-Bruun, VP Ship Operation Western Hemisphere: - One important element for Odfjell is the focus on attracting and retaining young professionals. This is important in order to have a strong and dynamic organisation, able to meet the challenges of the future. Master Chef Challenge- A cooking challenge was organised as a practical programme in the LFDP Odfjell Tankers - Trainee programme In Bergen there exist two trainee programmes in Odfjell Tankers and Ship Management
19 NR.01/ Karoline Andrea Gjellestad (23) (to the right) and Nicolai Andreas Eger (24) (to the left), trainees in the Operations department and Stian Sandnes Mensvik (in the middle), trainee in the Chartering department, are all following the Odfjell Tankers Trainee Programme odfjell quarterly magazine
20 Briefings ODFJELL QUARTERLY magazine 20 We wish the 12 new hired gentlemen in the Operation staff a safe long-term careers with the Company Odfjell Terminals (Charleston) LLC: - Tanks growing and employees starting By Mel Pinks, Terminal Manager, OTC So it is 2013 and of many changes a new year may bring with it, one for Odfjell s project in South Carolina is that when asked about the completion of project Phase 1 development, we can now say that we are targeting completion this year rather than next. Growing tanks The drum roll of activity on the Charleston terminal site becomes more intense and is not far from reaching crescendo as the diverse array of mechanical and construction disciplines populate on site. Indeed, writing now in January a walk on to the property will evidence work being done on the existing tanks (5 and 6) being sand blasted and coated, with new roofs and floors under preparation. Tank 1 with the majority of the steelwork complete, tank 2 growing in stature, tank 3 with the concrete foundation poured and the balance either in preparation for an onslaught of concrete trucks or having rebar (concrete reinforcing bar ) fitted ready for the same. The piling on all tanks is complete and has been for some time, giving our very tolerant and supportive neighbours respite from the daily hammering. Pipelines ready for installation Foundation work on the pump pit and pipe racks is underway, the existing rail has been ripped up ready for the installation of new track as engineers at Norfolk Southern, the railroad company whose history charted swathes of track across the nation and whom has been the standard bearer for rail safety for twenty plus years, work to approve our track design so that construction may start in earnest. Across the site also, hundreds of meters of 18 and 24 inch drainage pipe lays ready for installation underground whilst down on the dock, the existing dock slab goes under the knife of demolition and piles are driven home for a new structure that will be Odfjell s Cooper River Wharf 1. Off-site the last of the drawings are being finalized at PPS engineers offices in Raleigh, North Carolina under the auspices of our Don Gore whom has taken the reins of Project Engineer and nurses this new terminal to its feet and independence as he did in Houston some thirty years ago. Welcoming the Operation staff On an HR side, after a lengthy process of interviews and pre-hire training we welcome 12 strapping gentlemen into the fold as the Operations staff for the terminal and have commenced on a vigorous training schedule that is to be completed between Houston and Charleston on a 50/50 basis throughout the majority of this year. We certainly wish them all safe long-term careers with the Company and look forward to witness the continuing growth and eventual fruition of the Company s soon to be substantial presence on the US East Coast to provide safe, quality and environmentally conscious storage, transport and transfer service for, well, as we say anything liquid.