Measuring up to high standards - J. Lauritzen

OCEANS OF KNOW-HOW
September 2006
Measuring up to
high standards
Half-year result 2006 · Measuring up to high standards · Looking good in
Singapore · Sailing into the future · Rio encounter recalls the past · Minister
promotes Danish shipping in South America · Lauritzen Kosan sharpens
its innovative edge · Ups and downs in the reefer market · More ships in
the water · Shanghai office · Lauritzen Bulkers grows in Panamax and
Capesize segments · Circling the globe with logistics services

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Editorial
Half-year result 2006
Measuring up to high standards
Looking good in Singapore
The music man
Sailing into the future
Rio encounter recalls the past
Namegiving of the Freja Hafnia
Minister promotes Danish
shipping in South America
Lauritzen Kosan sharpens its
innovative edge
Ups and downs in the reefer market
More ships in the water
Shanghai office for Lauritzen Kosan
Lauritzen Bulkers grows in
Panamax and Capesize segments
Circling the globe with logistics services
Strategy seminar in Barcelona

Dear Reader,
After a long winter, Denmark has experienced the best summer in many years.
Luckily, the sun has also been shining on our various business activities, where
positive market developments have taken place. With pre-tax profits of USD 66
million in the first half of 2006, our financial performance has been in line with
expectations. However, as predicted, it is at a lower level than in 2005. With
changes in market conditions, JL’s business areas have placed themselves right
and been able to obtain satisfactory results. I am pleased that JL over the years
has become a very solid company with a substantial investment capacity, a
situation which we will maintain and further develop and, at the right time,
utilise for future growth.
In 2005, JL set up a subsidiary in Singapore to boost our activities in South East
Asia, and our activities have already grown considerably within this relatively
short period of time. As another sign of the growing importance of the Asian
region, Lauritzen Kosan has recently established an office in Shanghai to exploit
opportunities in China.
Danish shipping has grown considerably during the past years, and the ambitions
for additional growth are very high. In this edition of Lauritzen News
Mr. Bendt Bendtsen, Denmark’s Minister of Economic and Business Affairs and
Vice Prime Minister shares his interesting views on how Danish shipping can
become even stronger in the future.
JL’s location at the Copenhagen waterfront and in the heart of the city is superb.
However, we have realized that our premises need a little more than a “face-lift”
in order to meet today’s requirements. Therefore, Executive Management and JL
Fondet (the owner of JL’s premises at Sankt Annae Plads) have recently discussed
a renovation of the headquarters. An agreement has now been reached with an
architect and a construction company, and JL’s ideally located historical building
will also soon be transformed into a modern and creative office environment.
In order to minimize disruption to our day-to-day activities, we have decided to
move to other premises during the renovation period – which will probably last
about a year, starting at the end of September 2006.
I will report to you from a different location in the next edition of Lauritzen
News, but no matter where we are, JL and our dedicated staff will as usual be
ready to serve you.
Sincerely,
Torben Janholt
President & CEO
From end September 2006
and approximately one
year ahead, JL will move
to 60-64 Amager Strandvej,
DK-2300 Copenhagen S.
Torben Janholt,
President and CEO
3

4
Satisfactory first half-y
JL’s result for the first six
months of 2006 was USD 59m
compared with USD 156m in
the first six months of 2005.
Result before tax amounted to
USD 66m compared with USD
164m in the same period in 2005.
Profit from sale of vessels was
USD 23m, down from USD 36m
in the first half-year of 2005.
The result was in line with
expectations and satisfactory.
The result was influenced by lower
freight rates, particularly in the bulk
segment, and a decrease in profit from
sale of vessels compared with the same
period in 2005.
Lauritzen Kosan and Lauritzen Tankers
performed satisfactorily, and Lauritzen
Bulkers better than expected. However,
this was offset by a drop in earnings
from reefer activities.
Newbuilding programme – owned
and time-share vessels
JL continued its expansion and fleet
renewal supported by a strong balance
sheet. During the period, investments
in tonnage amounted to USD 187m
and included prepayments for newbuildings
within bulk, gas and product tank.
During the period, the newbuilding
programme increased by four owned
bulk carriers bringing the newbuilding
programme up to a total of 17 owned
vessels comprising: eight Handysize
bulk carriers with delivery in the years
2007-10, six ethylene gas carriers for
delivery in 2006-08, three product
tankers with delivery in 2006-08.
EXPECTATIONS FOR THE YEAR
Furthermore, nine MR product tanker
and five bulk carrier newbuildings will
be added to the fleet on a time-charter
basis. In addition, joint venture partners
will add four bulk carrier, two
gas carrier and three product tanker
newbuildings to the JL managed fleet
during the coming years.
Divestments during the period
amounted to USD 58m generating a
profit of USD 23m (USD 107m and
36m respectively in the same period
in 2005).
Lauritzen Bulkers
Lauritzen Bulkers accounts for the most
significant change in earnings, with a
result before tax of USD 34.1m in the
first half of 2006 compared with USD
120.7m in the same period in 2005.
The change in earnings is due to falling
bulk rates and lower profit from sale
of vessels.
Lauritzen Kosan
Lauritzen Kosans result before tax was
USD 16.9m compared with USD
27.7m in the same period in 2005.
During the period, Lauritzen Kosan
Expected result before tax for the remaining part of the year is about USD 49m
compared with USD 68m in 2005. Expected result before tax for the year 2006
has been revised upwards, in particular due to the sale of the gas carrier fleet
with a capacity below 3,000 cbm and the rate improvement in the bulk market,
and the result is expected to be in the range of USD 113-118m compared with
a result before tax of USD 231.6m for the year 2005.

ear accounts 2006
entered into a strategic alliance with
Allocean including sale and commercial
management of tonnage. Furthermore,
Lauritzen Fleet Management
will take over the technical management
of a selected part of Allocean’s
fleet, initially one gas carrier and two
chemical tankers. In the first half-year
of 2006, Lauritzen Kosan took the initial
steps to establish an office in
Shanghai, to be officially opened in
the autum of 2006.
After the balance day, Lauritzen Kosan
has sold its 50% shareholding in Sigas
Kosan as well as the fleet of eight
gas carriers in the segment below
3,000 cbm.
Lauritzen Tankers
In its third year of operation, Lauritzen
Tankers posted a result before tax of
USD 1.5m compared with USD 3.0m
in the same period in 2005.
Lauritzen Reefers
Earnings in Lauritzen Reefers dropped
to an EBITDA of USD 3.1m in the
first half of 2006 compared with USD
18.7m in the same period in 2005 due
to a reduction of JL’s fleet of owned
reefer vessels and lower reefer freight
rates.
Profit before tax for the period was
unchanged at USD 15.6m (15.5m in
2005) as the fall in earnings was offset
by higher earnings from sale of vessels.
Lauritzen Reefers’ fleet comprises one
owned vessel and 15 time-chartered
vessels, all commercially operated by
NYKLauritzenCool.
Key figures
Return on invested capital for the first
six months of 2006 was 27.3% and
return on equity was 19.5% compared
with 81.7% and 64.7% respectively in
the same period in 2005.
Key figures 1st Half Total Year
2006 2005 2005
(USD mill) Actual Actual Actual
Ordinary result before tax
Lauritzen Bulkers 34.1 120.7 166.0
Lauritzen Kosan 16.9 27.7 32.0
Lauritzen Reefers 15.6 15.5 36.0
Lauritzen Tankers 1.5 3.0 4.1
Landbased activities (1.2) 0.4 0.7
Other (1.4) (3.6) (7.2)
Result before tax 65.5 163.8 231.6
Tax and minorities (6.3) (7.5) (22.8)
Net result 59.2 156.3 208.8
Cash and securities 103.4 229.9 266.9
Long-term debt, total 68.1 92.2 77.2
Equity (excl. min.) 613.7 540.0 606.4
Total assets 754.2 660.9 824.7
5

6
Measuring up to
high standards
Self-assessment process helps
Lauritzen Fleet Management
stay on its toes and
J. Lauritzen stay competitive.
“You could describe
our mission in just a
few words: cost competitive
quality assurance
and risk control.”
Tommy Thomassen
Senior Vice President, Head of
Lauritzen Fleet Management
J. Lauritzen has a proven track record
of quality service. Much of the responsibility
for maintaining that record
falls to Lauritzen Fleet Management,
the department that sets standards for
how ships are maintained and operated.
Within the Lauritzen fleet, this
oversight now includes tankers, gas
carriers, and reefer vessels, and may in
the future extend to other ship types
as well. Additionally – in connection
with a Lauritzen Kosan commercial
management deal – the department
recently signed a ship management
contract with an external ship owner,
a move that opens up a new area of
profitable operation for the company.
Fleet Management is a multifunctional
department of 37 employees and
diverse oversight responsibilities. The
department’s largest section is a group
of technical engineers who provide
both long-distance advice and on-thespot
troubleshooting assistance to
J. Lauritzen ships worldwide. Other
activities include crewing responsibili-
ties, oversight of ships’ economic
activities, quality inspections, purchasing
services, and a host of other tasks
which, as Tommy Thomassen, senior
vice president and head of Lauritzen
Fleet Management, describes it, “ensure
that we as a company have a systematic
method of avoiding risks we don’t
want and of assuring and proving that
we deliver the quality we do want –
and that our customers demand.
“You could describe our mission in
just a few words: cost competitive
quality assurance and risk control,” he
says. “This includes both safety and
environmental concerns and covers
everything from technical operation,
maintenance, and purchasing to crew
operations, training, and education.
We set up comprehensive procedures
and guidelines for almost every conceivable
situation, starting with newbuildings
and extending through the
lifetime of a vessel. Considering the
forecasted newbuilding activity and
fleet expansion throughout J. Lauritzen,

Tommy Thomassen (left), senior vice president and head of Lauritzen Fleet Management, has been with J. Lauritzen since
March 2006. He is an engineer, has an MBA in management of technology, and previously worked in the technical division
of AP Moeller Maersk, where he held positions in ship operations, development, and technology.
fleet management definitely has the
potential to be a growth area. Our task
in the future will be to translate customer
requirements into standards and
to establish systems and processes that
ensure and document that we deliver
what our customers want -– in short,
that we support customers in reaching
their strategic goals. In addition to traditional
ship management services, I
foresee that, in time, we will also select
and audit external ship managers on
behalf of our customers, thus ensuring
and documenting adherence to policies
and standards across the businesses”
An extra level of internal discipline
A stringent self-assessment programme,
called Tanker Management Self
Assessment (TMSA) was recently put
in place by the oil majors to help ship
managers measure and improve management
systems. The programme
encourages ship managers to assess
their safety-management systems
against specified key performance
indicators, thus providing a measure
of best practices. It allows ship managers
to undertake their own internal
self-assessment against 12 basic measurement
elements and “self-rate” their
progress against the various stages in
each element. The goal is for ship
managers to use the results to develop
phased improvement plans that
address safety and environmental performance,
with the aim of achieving
higher standards of ship management
and continuous improvement against
best practices.
“Additionally,” says Tommy Thomassen,
“on our request, oil companies perform
onsite audits to measure the accuracy
of our self-assessment. We just completed
this process for the first time
with Exxon Mobil. It went well and
other audits will follow – both with
other oil majors and also with Exxon
Mobil, as this is a continuing improvement
process.” He goes on to point
out that, despite the demands of the
process, there are distinct benefits for
Fleet Management and for J. Lauritzen.
“TMSA gives us another level of internal
discipline,” he says. “Active participation
will help us exceed baseline
safety and environmental requirements,
and that’s a distinct competitive
advantage for the company. Once we
reach a level we’re satisfied with, which
will be soon, meeting TMSA requirements
will help us achieve other quality
goals, such as IS0 9000 (quality) and
14000 (environmental). The audits
also help us maintain a strong relationship
with the majors. They spend
time with us and get good sense of
how J. Lauritzen works, who we are,
and what we stand for – that we’re
committed to maintaining our reputation
for quality shipping services.”
7

8
Looking good in Singapore
Tight-knit team builds a
solid platform to support
J. Lauritzen activities in
the Far East.
Just a year ago, the Singapore office
looked more like a very good idea
than a solid reality. Of the initial team
of five, only two had worked together
previously and just one was
Singaporean. Office space had been
leased but not fitted out. Ambitious
business plans – including switching
commercial bulk activity from
Melbourne and adding value for other
business units – held equal parts
opportunity and challenge.
One year later, the new office is looking
good by just about any measure.
“In this relatively short time our group
has grown to eight people and has
gained the experience to perform as
a unified team, and that has made
all the difference” says Tom Hansen,
managing director of J. Lauritzen
Singapore, “I also have to say that our
team fits right in with this interesting
mix of a city – three of us are
Singaporeans and three are female,
so we’re the definition of equal
opportunity.”
Not all staff members were present when the photo was taken.
Moreover, those initial business plans
have produced solid accomplishments.
Bulk operations have been successfully
transferred from Melbourne and are
more comprehensive than ever. The
office now contributes ships and
handles the chartering operations for
a large part of the bulk business east
of the Suez. “Of course,” says Tom
Hansen, “there’s a constant exchange
of information with Copenhagen and
New York, but increasingly we are
becoming the Asian spoke in the
global wheel as far as J. Lauritzen’s
bulker activity is concerned.”
A growing scope of activity
Singapore is also playing a larger role
in supporting other Group activities.
LauritzenCool Logistics, jointly owned
by NYK and J. Lauritzen, has appointed
a Far East representative based in the
Singapore office, and there are specific
development projects underway in
other business areas. One indication of
the office’s rapid progress is that a year
ago it owned no ships – today it owns
a fleet of 12, with more to come. Also,
the Singapore office demonstrated its
value as a Far East support branch by
its hands-on assistance in exploring
the possibility of opening a Shanghai
office for the growing pressurised gas
trade in China (see article, page 20).
Tom Hansen acknowledges that the
pace has been hectic at times, but
credits consistent hard work from
his team and strong support from
Copenhagen for this early progress.
Additionally, he stresses that the office
has been given excellent support by
government agencies in Singapore.
“This is especially true of the
Maritime and Port Authority office,”
he says. “They contributed a lot to
our ability to get up and running so
quickly by removing obstacles rather
than creating them – you can see why
Singapore has become so competitive
in the region.
“Our office is trying to return that
consideration by participating with
government agencies to raise awareness
of the maritime industry among university
students – not just in ship
owning, but also in occupations like
finance, maritime law, ship management,
and shipyards. There’s a manpower
shortage in this important
industry, and we’re hopeful that we
can help correct it.”
“I also have to say
that our team fits
right in with this
interesting mix of
a city – three of us
are Singaporeans
and three are
female, so we’re
the definition of
equal opportunity.”
Tom Hansen,
Managing Director,
J. Lauritzen Singapore

The music man
Singapore’s Arnold Chan combines
the roles of corporate
warrior and hit composer.
Arnold Chan (aka, Chan Zilong) is
one of the founding members of the
J. Lauritzen Singapore (JLS) team.
With experience in international
accountancy and finance in major
Singaporean companies such as NOL
and a 1995 degree in accounting from
Ngee Ann Polytechnic, he came well
prepared to fill the role of senior
accounts executive. Working closely
with a group of expatriates – all of
whom were completely fresh arrivals
in Singapore – as well as with his peers
in the Copenhagen headquarters, he
has successfully taken on the challenge
of building the accountancy side of
JLS from scratch.
Yet even with the intensely time-consuming
schedule imposed by these
wall-to-wall professional and cultural
challenges, Arnold Chan has managed
not only to maintain a second life as a
composer, but even to excel at it. His
most recent song, "Wo Yao Kuai Le"
("I want happiness"), co-composed
with a friend, was sold to famous
Taiwanese female pop singer Zhang
Hui Mei (aka, A-mei) last year. It became
the title song on her latest album,
released in February 2006 and topped
the Taiwanese charts for several weeks.
Perseverance, talent, and a little luck
How does Arnold Chan do it? “When
I am out of the office, no longer a
corporate warrior, I still occasionally
find time to compose songs during
the weekends, which is emotionally
satisfying,” he says. “The interest in
composing my own music started
during my teenage days, when I was
involved in band performances, singing
only original songs. After years as an
amateur composer, I realized that selling
songs to Taiwanese singers could
give me even greater satisfaction. My
dream came true when a good friend
of mine, who was then a recording
company in-house lyricist, asked me
to compose the melody for his lyrics,
which I did. Soon after, he asked if I
would sell the copyright of the melody
to a Taiwanese singer, Chris Yu, who
was then compiling songs for his
album. Without hesitation, I agreed.
That was how I started.
“Frankly speaking,” he continues,
“I never expected that a song of mine
could be a number-one hit – after all,
I’m not a professional composer. So,
I really feel excited that "Wo Yao Kuai
Le” topped the Taiwanese charts for
several weeks, and that it touched the
hearts of many Taiwanese and Chinese
fans.”
9

10
Sailing into
the future
Two years of on-the-job and classroom training has prepared newly
minted employees for international shipping careers.
If you’d like a glimpse into the future
of J. Lauritzen – or for that matter of
Danish shipping in general – look no
farther that the enthusiastic faces of
Camilla Sloth Greve, Peter Kaagaard
Bro, Majbritt Sundstrøm and Monica
Christensen. Just two years ago,
Lauritzen News ran a photo of them
aboard the Lilla Dan as they were
about to embark on the training stage
of international shipping careers. As of
April Monica completed her traineeship
Education and training have always
played an important role for
J. Lauritzen, especially within the
shipping trainee programme. This
ongoing programme provides a knowledge
base for coming generations of
professional shipping staff in operations
and chartering, many of whom
and as of August this year, Camilla,
Majbritt, and Peter also became fullfledged
employees.
The intervening 24 months have been
nothing if not busy, as they followed
an intensive programme of theoretical
education at various institutes. All
agreed that one of the most enjoyable
– and beneficial – sides of the external
training programme was the opportunity
to mix with a variety of people
Focus on education
and training
have the potential to become part of
key management. In addition to formal
theoretical studies, the shipping
trainee programme also includes inhouse
classes and seminars, as well as
study trips. Additionally, as a major
employer, J. Lauritzen contributes to
the education of trainees within a
in the shipping business, either other
trainees or people already engaged in
the industry.
A thorough grounding
in the business
The academic coursework was supplemented
by internal J. Lauritzen classes
in subjects such as Spanish, English,
maritime economics, and seminars
and by extensive on-the-job training.
Each member of the group spent time
variety of other fields, such as finance,
purchasing and logistics, and communications.
“Because of increasing commercial and
managerial complexity, J. Lauritzen is
recruiting a rising number of staff who
have graduated from business schools

working in two different J. Lauritzen
companies, experience that included
day-to-day contact with customers and
agents. They have also had the opportunity
to spent some time at sea
aboard a J. Lauritzen ship, which provided
a chance to see how the business
actually works outside the office.
One of the final assignments of the
two-year programme took the entire
group on a week’s visit in June to
Lauritzen Kosan’s office in Bilbao,
and universities,” says Tove Elisabeth
Nielsen, senior vice president and
head of Corporate Image/HR. “As
for seagoing operations, we are also
engaged in the education and training
of cadets to be employed in the
Lauritzen fleet. This programme,
which takes seven years, is a combina-
Spain, with the goal of sharpening
their Spanish skills, as well as gaining
insight into the Bilbao operation.
Having just returned from this trip
before the interview for this article,
all five soon-to-be employees looked
ahead optimistically to the future. To
what specifically? The possibility of
international travel or of a posting
abroad, for one thing. For another,
the beginning of a real career and the
end of studies and exams. Though as
Tove Nielsen, Senior Vice President
and head of Corporate Image/HR.
tion of theoretical education at the
maritime academy and service
onboard fleet vessels.”
More details about the cadet programme
will follow in the next issue
of Lauritzen News.
someone hard-headedly, but cheerfully,
remarked, “In this business the study
never ends.”
11

12
Rio encounter recalls the past
During a meeting in Rio de Janeiro
earlier this year, Torben Janholt,
president and CEO of J. Lauritzen,
and Anders Mortensen, president
of Lauritzen Tankers, had a close
encounter with the past. At the offices
of Lauritzen Tankers’ agent in Brazil,
Knut Aune, they ran across Bill
McDermott, a former J. Lauritzen
employee and now director of Servicios
Petrolificos Mexicanos, in Tuxpan,
Veracruz, Mexico. He recalled a hairraising
experience at sea with
J. Lauritzen in 1980, when he and
twelve other Americans were onboard
the JL offshore jack-up rig Dan Prince,
under the command of Captain
Johansson. They had just completed
two years of difficult Alaska offshore
drilling operations for ARCO and
various Eskimo tribes.
As Bill McDermott tells it, “We left
Dutch Harbour, the Aleutians, under
tow by the New York, at the time the
largest tug in the world, with the final
destination of Abidjan, Ivory Coast.
We were hit by a storm in the North
Pacific. Seas were confused, and 40
to 50 feet. We were struck by a wave,
which took the heliport and bulwarks.
As the structure fell into the sea, it
cut the tow line and caused flooding
below decks, shutting down power.
We were adrift eight days before being
ordered off by the US Coast Guard.
“Two hours after abandoning the rig,
the Dan Prince capsized, going down
in twenty-two thousand feet of water
in the Alaska Trench. The trip from
the rig to the coast guard cutter, in
those seas, was an experience. We were
then taken to Kodiak, Alaska, where
we were met by J. Lauritzen managers
from Houston. We were given rings
and watches, and compensated for
our lost personal belongings by
J. Lauritzen. We were more than well
compensated.
“I would very much like to meet up
with Captain Johansson again. In my
opinion, he was a true captain during
a difficult eight days.”
Namegiving of the Freja Hafnia
In connection with the namegiving of
the Freja Hafnia on 20 of February at
the Shin Kurushima Dockyard, Japan,
a delegation from the Copenhagen
and the Tokyo offices attended the
magnificent ceremony, which had
been perfectly arranged by the owners
Mitsui and Co. and the dockyard.
Also attending, and representing
Lauritzen Tankers’ close partner Vitol,
was Mr Ian Butler who is responsible
for the chartering activities at the Vitol
Singapore office.
The ceremony was concluded by the
traditional cutting of cord by the
sponsor Mrs Ellen Mortensen, followed
by the breaking of a sake barrel.
The Freja Hafnia is the first vessel in a
series of eight so-called large Medium
Range (MR) tankers. Lauritzen
Tankers will take delivery of six of
these newbuildings.
The special design of these vessels
provides a particularly large cubic
capacity, approximately 60,000 cubic
meters, basically within the same
dimensions as that of a standard MR
tanker. This design – created in close
cooperation with Lauritzen Tankers’
partners Vitol and Mitsui and Co. –
has proven attractive to Lauritzen
Tankers’ customers because of the
economy of scale it provides.

Minister promotes
Danish shipping
in South America
In June, Mr Bendt Bendtsen,
Minister of Economic and Business
Affairs and Vice Prime Minister,
headed a delegation, including
delegates from the major Danish
shipping companies and other
members of the shipping sector on
a trip to Brazil and Chile with the
purpose to promote the Danish
shipping industry.
The trip, which was arranged by the
Danish Shipowners’ Association,
included visits to Maersk in Brazil
as well as to NYKLauritzenCool in
Chile. J. Lauritzen has been represented
in Chile since the 1930’s and
has had a branch office in Santiago
since 1990. Besides a presentation
of NYKLauritzenCool’s activities in
Chile, the delegation also had the
opportunity to visit Concha y Toro,
which is largest exporter of wines
and table grapes in Chile and one
of NYKLauritzenCool’s clients.
J. Lauritzen hosted a luncheon
at the winery, which included an
exquisite choice of Concha y
Toro’s world-class products.
Front row, left to right: Andrés Ureta,
president of Exser Ltda; Torben
Janholt, president & CEO of
J. Lauritzen and chairman of the
Danish Shipowners’ Association;
Pablo Guilisasti, president of Concha
y Toro; Bendt Bendtsen, Minister of
Economic and Business Affairs.
13

14
Birgit Aagaard-Svendsen, executive vice president and CFO; Bendt Bendtsen, Minister of Economic and Business Affairs and
Vice Prime Minister; Torben Janholt, president and CEO.
On 17 March this year, the J. Lauritzen headquarters had the unique
opportunity to meet Mr Bendt Bendtsen, the Danish Minister of
Economic and Business Affairs. In his capacity of Minister of Business
Affairs, Mr Bendt Bendtsen is also “minister of the Danish shipping
industry”. The Minister had accepted an invitation from J. Lauritzen’s
Executive Management to deliver a speech, at a morning session for
all Copenhagen staff members, on “The Danish Maritime Cluster – an
Agenda for Growth”.

“
Earlier this year
I launched an action
plan for supporting
the growth in shipping
as well as other maritime industries
in the Danish Maritime Cluster.
The basic aim of the action plan is to
ensure the necessary framework that
will enable the maritime industry to
meet global challenges.
Denmark presently enjoys a good
position. Danish shipping is currently
among the world’s most competitive
with foreign currency earnings of
approximately DKK 140 billion from
the sector in 2005. Over half of
Denmark’s service exports are also
attributable to maritime transport.
Danish shipping operates seven to
eight per cent of world tonnage, but
accounts for close to ten per cent
of the total turnover from global
maritime goods transport. Other
industries in the maritime cluster
also make a significant contribution
to export earnings.
The cluster accounts for direct and
indirect employment of just over
100.000 persons or six per cent of
the private workforce in Denmark.
However, further growth will not
occur automatically. Globalisation
and international competition are
placing greater demands on shipping
companies and other enterprises in
the Danish Maritime Cluster.
It is essential that the economic framework
conditions remain attractive.
They must be stable and updated
when necessary. It is also essential to
have a maritime administration that
can match the regulatory needs of the
industry, both nationally and internationally.
This is paramount if Denmark will
retain and improve its position as an
international maritime nation with
quality shipping and commercial
efficiency.
The initiatives in the action plan are
concentrated in seven focus areas:
education and recruitment; research,
development and innovation; taxation
and raising of private venture capital;
reduction of administrative burdens
on the industry and national technical
requirements; promotion of Danish
influence and increased market access;
Increased focus on quality shipping;
and a modern and efficient maritime
administration.
Recruitment and better education
To maintain and develop the competitiveness
of the Danish Maritime
Cluster, we have to be focused on
some of the fundamental issues of the
future. First of all, we will have to
increase the recruitment of qualified
young people to the maritime industries.
More extensive recruitment and
information initiatives will be launched
regarding career opportunities in the
whole industry. Working on board a
ship should be seen as an opportunity
for having a career within the entire
cluster.
The Danish Government will continually
monitor the requirements of the
maritime industry to ensure an up-todate
and purpose-oriented education
system. We will also initiate an analysis
of the skills required by the shipping
companies’ onshore organisations. We
will consider the need for bachelor
and diploma level courses in the area
of shipping and chartering, and a
technical master’s degree in addition
to the maritime officer courses.
Improving research and development
Another essential objective is to establish
an overall strategic, business-oriented
platform for research, development,
and innovation in the technological
area of the maritime cluster.
This will take place in close cooperation
with the cluster and research,
pro-active knowledge-sharing, and
educational institutions.
As part of this process, a national
research and development programme
has been initiated in the area of maritime
technology. The programme has
been developed in cooperation with
the Technical University of Denmark
(DTU) and FORCE Technologies.
The programme aims to ensure that
Denmark continues to maintain
advanced research in the area of
maritime technology.
Last year the Danish Government
established the new Danish Maritime
Trust Fund. The Trust Fund has
already supported recruitment and
innovation initiatives in the action
plan. I expect that the new fund will
support many innovative projects in
the coming years.
International efforts
We will also put further emphasis
on ensuring Danish influence on the
results of the political work in international
organisations such as IMO,
ILO, WTO, and the EU with a view
to promote quality shipping and
increased market access for maritime
transport. And there is a need for
further focus on the largest foreign
markets, such as North America and
China and the new growth markets in
Asia and South America to maintain
and improve market access.
In conclusion, the Danish Government
and the Danish Maritime Cluster have
a common goal. With the combination
of the action plan and the professional
skills of a Danish Maritime
Cluster, I think we
have a good basis for
optimism and further
growth.” ”
15

16
Lauritzen Kosan sharpens
its innovative edge
Containerisation of two existing ships benefits the environment . . .
and saves money.
Lauritzen Kosan has already attracted
industry attention for technical innovation
in six newbuildings (see article
on page 18) still under construction
in Korea. Innovations including containerised
deck tanks and an improved
nitrogen plant will make these “green”
ships highly efficient and remarkably
environmentally friendly. No less
remarkable is the fact that Lauritzen
Kosan has also devised a method of
retrofitting this innovative technology
to two existing ships in its fleet.
Both these vessels were standard semiref
cargo ships with two cargo tanks
and a small nitrogen plant. Lauritzen
Kosan has engineered an industry first
by designing a way to fit two separate
containerised deck tanks as well as an
improved nitrogen plant on each ship.
The idea was developed in house, and
Lauritzen Kosan's good working relationship
with Bureau Veritas, the governing
body, led to a rapid approval of
the new plans. Work was completed
on the first ship, the Tanja Kosan, in
June and the second ship, the Tilda
Kosan, will be completed within
the year. The containers have been
manufactured in Ireland and Denmark,
close enough to Copenhagen headquarters
for Lauritzen Kosan engineers
to supervise the project.
Strong competitive advantage
Thomas Billeschou-Hansen, manager
of operational services for Lauritzen
Kosan, explains that although there
is nothing new about the equipment
itself, its innovative application will
increase Lauritzen Kosan’s competitive
edge. “The Tanja Kosan now has two
separate LPG containers which can
contain gassing up products,” he says,
“so that changing product - for example,
from butane to propylene - can be
accomplished while sailing, whereas
before we had to go alongside. Now
we can prepare for cargo change ourselves
en route and do gassing up, so
that when we come to port we're ready
for loading. This provides tremendous
savings in time and money.”
The new equipment presents huge
environmental benefits since it recaptures
gas which, in conventional operations,
is released into the atmosphere.
It also saves the cost of replacing this
lost gas when the vessel next loads a
similar cargo. Additionally it eliminates
two port calls. All in all, this
represents a savings of two to three
days as well as a substantial amount
of money, which means that the containerisation
can be paid off in less
than four years. “We believe Lauritzen
Kosan's strong position in the marketplace
will further improve as the
equipment will enable us to more
efficiently change from one cargo to
another while offering our customers
the alternative to effect this change
without emissions” says Thomas
Billeschou-Hansen. “And we have a
patent application pending on the
technology to protect our position.”

Ups and downs in the
reefer market
It is no exaggeration to say that 2006
has so far been a difficult year for the
reefer business. The year began in the
same negative mode as that of the end
of 2005, and even though peak season
rates skyrocketed in March the peak
season was fairly short-lived. Strong
market rates in March continued
halfway through April at over 100
cents per cubic foot, but significantly
dropped during the second half of the
month. It seems as if the market has
not recovered since then.
What usually contributes to bringing
the market upward in the summer
months is the Southern Hemisphere
citrus season, but this year there were
insecurities in many areas. Argentina
was affected by drought and South
Africa was hit by rain. It was overall a
tough year for South Africa, since the
country’s deciduous season had fallen
flat and more hope was pinned to the
citrus harvest.
A rollercoaster ride
The up-and-down banana situation
was the major culprit in the rollercoaster
rate ride, where strong produc-
Cents per Cbft
140
120
100
80
60
40
20
0
Jan
tion during most of April kept the
market going, but thereafter fell quite
substantially. This occurred at the
same time as there was a backlog of
vessels in the Panama Canal and a
reduction in frozen cargoes from the
United States. Also, the majority of
Chile’s exports came to a more or
less abrupt stop earlier than usual,
which had a double-sided effect,
since the Chilean season began
later than expected.
Even though the situation is difficult,
the market is well aware of the usual
summer slump in demand for
bananas. The large European stonefruit
crop of last summer kept imported
fruits out of full storage facilities, but
this year the crop is slightly smaller.
The immense heat in many parts of
Europe has produced strong demand
and a quick turnaround for stonefruit
and tropical fruits.
There is also movement on the newbuilding
side, with one Norwegian
operator introducing two new modern
vessels this year and two sister vessels
next year. Additional small reefer vessels
have also been placed on order by
other operators.
Average monthly reefer spot rates, 1997-2006
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
17

18
More ships in t
J. Lauritzen newbuilding programme demonstrates innovation,
customer service, and market reach.
Even in an age when information
technology and virtual logistics capabilities
are essential components of the
shipping industry, providing value to
customers still comes down to ships in
the water. With a robust newbuilding
programme that reaches across its
operating units, J. Lauritzen is delivering
innovative transportation solutions
and boosting its own business performance.
Whether they attract new
customers through increased efficiency
and safety, extend the company’s reach
into new markets, or simply prove to
be a valuable commodity in their own
right, new vessels provide bottom-line
results. In 2006 and beyond, continued
fleet expansion gives J. Lauritzen its
biggest-ever newbuilding portfolio,
including bulk carriers, product tankers,
and gas carriers.
A buy-and-sell strategy
Lauritzen Bulkers has recently added
four newbuilding contracts to the four
already on order. These newest four
are identical Handysize sister ships –
all being built in Japan – and are
scheduled for delivery between 2008
and 2010. Handysize ships are the
backbone of the Lauritzen Bulkers
fleet, with Handymax, Panamax, and
Capesize vessels being acquired and
sold depending on market conditions.
“Strategically timed vessel transactions
help make us a worldwide leader,” says
Jens Ditlev Lauritzen, president of
Lauritzen Bulkers, “and we’ll continue
to seek newbuilding and long-term
leasing opportunities – buying and
selling vessels is an essential component
of our long-term strategy.”
Increased versatility and service
In just its third year of operations,
Lauritzen Tankers continues its record
of steady expansion with recent orders
for three ships in a new 40,000 dwt.
medium-range carrier segment. These
vessels will be matched by three additional
ships to be purchased by Unicorn,

he water
Lauritzen Tankers’ South African
partner, but commercially managed by
Lauritzen Tankers out of the Copenhagen
office. All six ships will be built
at the ShinA Yard in South Korea, with
delivery due from the end of 2006
through 2008.
“The fact that we’ll be the owner, not
just the time-charter manager, of the
three new ships shows the growing
strength and versatility of our department,”
says Jesper Kjersgaard, operations
manager of Lauritzen Tankers.
“Its also important that these vessels
are being built to an IMO-3 standard
that will give us the ability to transport
a greater range of specialized
products – such as certain easy chemicals
– than we’ve been able to do in
the past. This versatility will help us
increase our level of service and attract
new customers. At the same time,
being somewhat smaller than our
47,000 tonners, the new ships should
fit nicely into the Far East trade, as
they’re well suited for transport and
distribution to smaller upriver China
ports, for example.”
Innovative vessel design
As chronicled in previous issues of
Lauritzen News (April 2005 and March
2006), one of the Group’s most ambitious
newbuilding projects is Lauritzen
Kosan’s order for a series of new semipressurized
gas carriers with the capability
to carry ethylene. Designed in
cooperation with the German engineering
company Tractebel and under
construction at INP Heavy Industries
in Korea, the new vessels will increase
Lauritzen Kosan’s ability to serve large,
worldwide petrochemical companies.
They also showcase Kosan’s expertise
in technological innovation and vessel
design – including the ability to meet
the highest environmental standards.
The first of these vessels was launched
this spring, although, at that time,
much remained to be completed before
its trial run around mid October. As
of this writing, Lauritzen Fleet
Management has already trained and
mobilized the crew. There is a fixed
schedule for completion of the rest of
ships, which calls for a new launching
about every 10 weeks.
Fine-tuning the testing process
Fleming Schmidt-Andersen, fleet
manager and vice president of
Lauritzen Kosan, points out the
importance of the first ship as a test
case for timely completion of the
remainder: “There is a tremendous
amount of testing to be done. We take
over the vessel before we have a certificate
of fitness, then Trachtebel will test
the gas plant, gas up, run the pumps,
and so on. If anything is wrong, the
shipyard must rectify it. After the gas
trial comes vetting inspections,
approval from oil majors, and the first
commercial voyage. So this first ship
is important – it will help us fine-tune
our processes and not repeat errors
down line, which will be crucial to
our efforts to complete the next seven
ships at 10-week intervals.”
19

20
Shanghai office for
Lauritzen Kosan
Opportunity beckons for pressurised
gas carriers in the
growing Chinese coastal trade.
From its office in Hong Kong,
Lauritzen Kosan has for several years
monitored the increasing demand for
pressurised gas carriers along China’s
coast. “We’ve been aware of this trend,
as growth in the interior of China
continues to drive huge petrochemical
imports,” says Thomas Wøidemann,
senior vice president of Lauritzen
Kosan. “But the only effective way for
us to take advantage of it is to have a
location within the market. Hong
Kong just isn’t close enough, which is
why we’ve decided to add an office in
Shanghai.”
The new Shanghai office will be run
by Lin Siau Tay, a native of Singapore,
who has previously worked for Louis
Dreyfus in Beijing. He has already
signed a lease and hired a commercial
assistant, but his major challenge for
the next few months will be to explore
gas shipping opportunities in China.
This can be a time-consuming process
– it could take a year or more to
develop the business, but there is
reason to be optimistic given the fast
pace of growth in China.
“The market is definitely primed to
take off,” says Thomas Wøidemann.
“All the oil majors are building terminals,
and some are already up and
running. We’ve already suggested to
oil and chemical majors who have
invested substantially in China that we
can provide cost-effective solutions to
them in the very near future. Lin Siau
Tay will be contacting shipyards and
estimating costs, since it’s our hope
that the ships used to service customers
in China will be built, maintained,
and operated out of China.”
It is entirely possible that if this initial
phase goes well, the Shanghai office
could become a stepping stone for all
of J. Lauritzen, and, as Lin Siau Tay
explores Kosan’s opportunities, he will
be considering possibilities for the
bulker and tanker side of the company
as well.
“The market is definitely primed to take
off. All the oil majors are building terminals,
and some are already up and running.”
Thomas Wøidemann
Senior Vice President,
Lauritzen Kosan
By birth, education, and experience,
Lin Siau Tay, is well suited
to head up the new Shanghai
office.
A native of Singapore, he holds
degrees from two US universities:
a BA in Information Systems
from Indiana State University
and a MBA from Case Western
Reserve University.
More than a dozen years in the
shipping business as an executive
has given him wide experience
in the Far East with companies
ranging from Louis Dreyfus and
Norwegian Gas Carriers (Asia)
Pte Ltd to I.M. Skaugen China
Activities, and Norgas Carriers.
His most recent position before
joining Lauritzen Kosan, was
operations controller for Louis
Dreyfus Trading Co Ltd in
Beijing.

Lauritzen Bulkers grows in
Panamax and Capesize segments
Long-term employment of larger
vessels is a strategic response to
the continued expansion of the
China market.
In late 2001, comprehensive studies
of supply and demand – particularly
in the expanding China market – led
Lauritzen Bulkers to re-enter the
Panamax (around 75,000 dwt.) segment
after a twenty-year absence. From
2002 to 2005, five of these ships were
secured for long-term employment
from Japanese owners; all are now being
traded on the spot market or are
under contract to various clients.
Between 2006 and 2008, Lauritzen
Bulkers will acquire an additional
three Panamax vessels.
“We moved back into the Panamax
segment after careful consideration of
market growth indicators,” says
Torben Warsberg, vice president of
Lauritzen Bulkers. “Then, as demand
showed no signs of slowing, we also
decided to enter the Capesize segment,
which are very large vessels, around
175, 000 dwt. The main market driver
behind this activity has been China’s
appetite for iron ore – an appetite that
we think will continue to grow, which is
why we wanted a stake in this market.”
The first Capesize acquisition was
delivered in September 2005 and was
traded on the spot market until lately
when this vessel was committed into a
three-year relet charter. A second vessel,
delivered in July this year, has also
Index
8500
7500
6500
5500
4500
3500
2500
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1000
Baltic Exchange Freight Rates Cap Index
23.02.02
24.08.02
22.02.03
23.08.03
been committed into a charter with
Italian clients. A third vessel is to be
received mid September for a ten-year
period and this unit has also lately
been committed into a five-year relet
period. These three acquisitions, combined
with the Panamax vessels, give
Lauritzen Bulkers a good base in the
two large-vessel segments and improve
its opportunities to serve customers
worldwide.
21.02.04
21.08.04
19.02.05
20.08.05
18.02.06
19.08.06
21

22
Circling the globe wi
New partnerships and increased presence consolidate LCL’s
Mediterranean network and open the door to the Far East.
Aggressive but carefully calculated
growth remains the pattern for
LauritzenCool Logistics. Nowhere is
this more evident than in Europe and
the Mediterranean region, where LCL
continues to consolidate its presence
through LCL Iberia, which provides
shipping, trucking, and distribution
services throughout Europe, and LCL
Mediterranean, a holding company
charged with setting up LCL affiliate
operations. “We are continuing our
strategy of finding experienced partners
who rapidly get us up to speed,”
says Rafael Llerena, managing director
of LCL Mediterranean. “After just one
year, our operations in Spain and
Portugal are going very well, trucking
operations in Europe have been
extended to include Morocco, and
within a year to eighteen months
we anticipate having our entire
Mediterranean and Black Sea area
network fully set up.”
He continues by enumerating an
impressive list of locations where LCL
has recently appointed agents, including
France, Ukraine, Georgia,
Armenia, Azerbaijan, Malta, Tunis,
Slovenia, Croatia, Serbia, and Bosnia.
“Now is the time for us to continue
to build the foundation we need to be
successful,” he says, “and when that is
in place we’ll focus on gaining market
share.” Two particularly important
locations have just opened. Because of
its proximity to European markets and
its capacity to handle both shipping
and trucking, LCL Turkey promises to
be a lynchpin of LCL Mediterranean
operations. Similarly, LCL Egypt both
rounds out access to Mediterranean
trade and opens the way to new
markets in the Middle East.
Land and sea operations in Turkey
In Istanbul, LCL has partnered with
the Catoni group of companies to
form LCL Turkey, which is scheduled
to begin operations in September
2006. Serdar Ayirtman, general manager
of LCL Turkey, says that, from an
operations point of view, the office
already has a team in place and is fully
up and running. “We are having
discussions with other LCL partners
worldwide, and at this stage of plan-
ning many options are on the table.
For example, we are thinking seriously
of establishing our own equipment –
in terms of containers – and positioning
them in both Izmir and Istanbul
to accommodate shippers and receivers
in these ports.”
However, he also emphasizes the
importance of the overall LCL strategy
of integrated logistics, a single-entry,
one-stop-shop range of services for
fruit and other perishable goods. This
means that, within ocean trade, LCL
Turkey also has the capacity to offer
customers forwarding services on
major carriers for transhipment
around the Mediterranean. On the
land side, LCL, through Catoni,
has strategic alliances with trucking
partners who enable LCL to offer a
full range of overland services, both
within Turkey and connecting with
the broader LCL trucking network in
Europe. “Depending on the nature of
the project, we have a wide range of
ocean and land resources in place as
part of the global LCL network,” says
Serdar Ayirtman, “so we’re looking
forward to an exciting first year.”
Egypt office looks east and west
Like the Turkey office, LCL Egypt,
located in Alexandria, is due for official
opening in September, although
thanks to its partnership with the
Egyptian branch of the French company
Worms Services Maritimes,
the office begins with an established
presence in the area. Both Catoni, in
Turkey, and Worms, in Egypt, have
had long alliances with NYK, LCL’s
partner in NYKLauritzenCool, so
these new offices should fit smoothly
into the LCL network. According to
Patrick Isoux, general manager of LCL
Egypt, the reefer trade in Egypt has
been booming for the past five or six
years. “Business has doubled in that

th logistics services
time and shows no sign of slowing,”
he says. “We anticipate a continued
15% to 20% annual growth rate. The
concept of obtaining a full range of
logistics services from one company is
something new in this region, so we
feel that despite activity by shipping
lines and specialised forwarders, there’s
a big opportunity for us – no one else
covers the full transport chain.”
Egypt has been an agricultural centre
since the time of the Pharaohs, and
LCL Egypt will focus chiefly on perishable
exports – citrus is the biggest
individual product category, followed
by green beans, grapes, and a wide
range of other fresh produce. There
is also a large amount of import traffic
– such as frozen beef from Latin
America – by major shippers that may
present a future opportunity for
growth. Operations will focus chiefly
around the Mediterranean and the
Black Sea, and, whenever possible, in
the Middle East. The main destinations
for Egyptian produce are the
Arab Gulf countries – Bahrain, Qatar,
Saudi Arabia, and the United Arab
Emirates – where LCL wants to develop
a stronger presence. “Our second
target market is Italy,” says Patrick
Isoux, “which is right at our fingertips.
A good part of Egyptian exports to
Italy are transited by road to northern
and eastern Europe, which represents
yet another area of growth through the
LCL overland network. The newly
established dedicated NYK feeder line
that runs weekly from Damietta
straight to Genoa will be a big help to
us in this market.”
China – one city at a time
When Frankie Lee was appointed
Far East regional manager in LCL’s
Singapore office last March, he faced
challenges of both business development
and cultural diversity. “This is
an exciting new area for LCL,” he
says. “We see the opportunity to be
the area’s first door-to-door perishable
logistics provider, with our own
branding. LCL can provide a complete
solutions change for the Far East. But,
especially in this region, it’s important
to get the right people, determine the
right timing, and spot the right opportunities.
First, there are big differences
in cultures and the way business is
done, and, second, with the exception
of Japan, most of this region is very
different from more mature markets.”
It is not only different countries that
present different market challenges.
Frankie Lee cites China as an example
of huge potential, where because of
economic and business differences,
LCL will target individual cities –
Shanghai, Beijing, Chengdu, and
others – as markets unto themselves.
The country is just too huge and
varied to be tackled as a single market.
Also, infrastructure capabilities in
China vary widely, although the
government is heavily promoting port
development. In some of the country’s
large, modernized ports, LCL will
immediately pursue opportunities for
its full range of door-to-door services.
Throughout the entire region, LCL
will follow the model, described above
in connection with Europe and the
Mediterranean, of seeking experienced
business partners. “We’re at the beginning
of a three- to five-year plan to
fully establish ourselves in the Far
East,” says Frankie Lee. “We already
have agreements in place for logistics
services between South American
countries and major markets in China
and Korea. Our existing LCL channels
through Hong Kong and Taiwan can
now be strengthened by a direct presence
and full door-to-door service.
The United States is the biggest single
trading partner for this part of the
world – especially for citrus, vegetables,
and meat – and we’ll use our
experience in perishables as well as
connections with LCL’s growing US
network to help gain a foothold here.”
Commenting on the recent as well
as future development of LCL, Ole
Schack-Petersen, president of the LCL
Group, cites the importance of global
presence and the Group’s ability to
offer the exact service required by each
customer, whether it is a door-door
service or a local service required at
the receiving end either by the shipper
or the receiver. “We serve the cargo
interest, and to do so in the best possible
manner we utilize the capabilities
of any service provider available to the
trade,” he says.
23

Facts on J. Lauritzen A/S
September 2006
Strategy seminar in Barcelona
At the beginning of May, 2006 an
extended JL management group
attended a strategy seminar at IESE
in Barcelona, Spain, one of the
leading international business
schools. One of the items at the
Editors
Torben Janholt
Tove Elisabeth Nielsen
Jens Søndergaard
J. Lauritzen A/S
Sankt Annæ Plads 28
1250 Copenhagen K
Denmark
Tel: +45 3396 8000
seminar was value creation in an
ever changing world. Value creation
is definitely part of JL’s business
philosophy and applied in our
daily relations with customers
and partners. Likewise was the
J. Lauritzen A/S operates globally through these business units: Lauritzen Bulkers, Lauritzen Kosan, NYKLauritzenCool, and Lauritzen Tankers.
JL is also engaged in land-based activities through LauritzenCool Logistics, which provides integrated transport solutions to the reefer market.
JL employs a staff of approximately 900 persons and together with partners/associates controls a combined fleet of about 190 vessels representing bulk
and gas carriers, product tankers, and specialised reefer vessels.
For more details on JL’s business activities and on the fleet, see www.j-lauritzen.com
Editorial support and design
Cross-Border Communications
Copenhagen
acknowledgement that JL’s corporate
functions form a solid platform for
continuous differentiated value
creation for our individual business
areas and for the entire JL Group.
Lauritzen News is a semi-annual
publication. Reproduction
permitted only after agreement
with the editors.