Odfjell nr 3 - 2006.indd

Dear Colleagues...
The threat of global warming due to
massive emissions of greenhouse gases,
combined with the ever increasing
prices on fossil fuels, have created a
considerable demand for renewable
and more environment-friendly energies
such as biofuels. This opens for
exciting prospects; for the energy supply,
for the environment and not least
for Odfjell. Biofuels, such as ethanol,
vegetable oils and biodiesel are lines
of cargo that may open up new markets
for our ships and terminals. If we
consider our own fuel situation the
green energy forms may offer even
more benefits to us. Heavy fuel oil,
the dominant fuel in shipping, consists
mainly of what is left after the
lighter and more valuable parts of the
crude oil have been distilled, popularly
referred to as “the bottom of the
barrel”. This made sense when the oil
prices were low and the fuel costs an
almost insignificant factor. With fuel
prices at above US$ 300 per tonne,
and with the restrictions of fuel sulphur
emissions being implemented,
it is quite another story. New technologies
to gain improved fuel efficiency
on board, combined with the
introduction of biofuels also for vessel
propulsion, will be an important
contribution to the world’s shipping
and transportation industry. We are
indeed living in exciting times.
Odfjell has developed a strong market
presence in China, and we have
gained a good foothold in this vast
market. Recently we took delivery
of the first newbuilding from China,
M/T Bao Hai Tun, which will trade in
the Chinese domestic market. The
first tanks have already been erected
at Odfjell’s new tank terminal in
Jiangyin, and the relocation of our
terminal in Dalian is well under way.
Our Chinese marketing office is well
established in the most important
business city, Shanghai. The Chinese
economy is still showing a very strong
growth, and there are no immediate
signs of any drastic downturn. When
it comes to trade and production the
country is an important engine for
world growth. It seems fairly evident
that Chinese progress and economic
importance will continue, and with
this also the significance of Chinese
culture and language. Odfjell benefits
from employing a team of skilled and
motivated Chinese nationals, who really
contribute to our success there.
And who knows, maybe some day one
of my successors will write this column
in Mandarin.
We have been through a very active
third quarter, which is not least reflected
in the many launchings and
naming ceremonies and development
projects described in this issue of
Odfjell Quarterly. The newbuilding
projects in Poland and Russia are
progressing well, and the long-term
time-charter vessels continue to be delivered
from Japan at regular intervals.
We have also further expanded our
fleet with four second-hand chemical
tankers, an investment of more
than US$ 100 million. At our terminals
there are many initiatives to further
improve safety and efficiency, and we
are also looking at opportunities for
expansions, both at existing locations
and at new places. On board our ships
and ashore a lot of hard work has
been put in on safety and operational
excellence. All in all, I am confident
that we are moving in the right direction.
However, there’s no room to rest
on our laurels. To prevail in the long
run, every day we have to meet and
exceed our customers’ expectations
and to perform according to regulations
and public requirements.
The performance of our employees is
the critical success factor for Odfjell,
and to make sure we all pull in the
same direction we have established a
set of Key Performance Indicators to
monitor the results of our work. By
reaching the KPI targets, we will ensure
healthy results for the company,
allowing us to develop and further
strengthen our position. But this will
also benefit the employees directly,
through the new incentive bonus
scheme. Consequently, success for
Odfjell will also gain all of us.
Keep up the good work!
Regards,
Terje Storeng
President/CEO
ODFJELL Quarterly September 2006 3