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Looking to the long term

Pragmatism is the key to survival in an industry that is refocusing on long-term relationships, says Helen Hill

Hendrik Land

Naturally with less activity and fewer vessel movements, the towage operators have been forced to face the reality of today’s economic climate. Increasing numbers of vessels are in lay-up and the consolidation of services is having a knock-on effect. Offshore work in the North Sea has also dipped considerably and rates have seen significant drops. And if there is any such thing as a ‘typical’ salvage year, 2009 has been on the quiet side, maybe because there are fewer vessels at sea and the ones that are sailing are slow-steaming. But despite these challenging times, there are no signs of panic.

Towage and salvage operators are looking to the long term by pushing on with investment programmes and renewing their fleets. Wholesale cancellations are not looking likely but some tug operators are not taking up options and they are switching vessels around to ensure their tugs do not rest along the quayside for too long.

Refocusing

Smit chief executive Ben Vree says it is a matter of concentrating on core activities and at the moment, Smit has little reason to deviate from its strategy, recession or no recession. The Rotterdam firm’s long-term growth targets remained the same, he says.

Smit had already called a halt to its newbuild programme some time ago in May 2008, when it considered the prices for newbuild tugs was simply getting too high, while at the same time the quality was being compromised. “There was a dilution of experience at the shipyards. Too many new yards were chasing the experienced people,” Vree says. Despite this, the Dutch group still has a considerable building programme in place and all vessels have to fit into its standardisation programme. Some 150 vessels have been ordered to arrive between 2004-2011, with around 30 still to join the company. Rather than cancelling orders, Smit prefers to reposition them to new locations or to replace existing vessels. Recently, the company moved tugs from Antwerp and Liverpool to the new container port in Taipei, for instance.

The stern section of the MSC Napoli is removed

Fairmount Marine has also changed strategy over recent years, with about 90% of its work being in the towage sector and only 10% salvage or rescue related. “In the past this used to be divided more equally as some vessels were positioned on strategic locations to anticipate salvage opportunities. In the present market we manage to acheive full orderbooks with well-rewarded towage works,” says commercial manager Paul Mulder. “Since we usually deliver the tow at a location with maximum four weeks support work, we are not stationed in any particular area of the world permanently.”

New opportunities

Kotug chief executive Ard-Jan Kooren, comments that shipping companies are looking for other opportunities. They are moving ports and consolidating. The family-owned firm operates in Rotterdam, Le Havre, Bremerhaven and Hamburg and all the ports have seen a downturn and there is pressure on rates, he says. Offshore North Sea work has usually kept the towage firms busy but activity has flattened off and rates are down by more than a third on last year, he adds.

Kotug aims to come out of the recession stronger than it went in and the company is investing in a fleet renewal programme and in its crews and shore-side personnel. The company has a 29-strong fleet of tugs, including five newbuilds. Four new 85 tonne Bollard Pull (BP) Rotortugs are expected to join Kotug by the end of the year. The first, RT Rob, is expected to arrive on July 18, in Bremerhaven. Kotug has however, cancelled two of its options. Mr Kooren admits that in the short term, he is not optimistic and he does not see a pick up until 2011. But at the same time there will be opportunities and “our balance sheet is strong,” he stresses.

Lifting barges at work

Fleet renewal

Multraship saw the latest addition to its fleet, Multratug 18, arrive in July and this will be followed by two 80 tonne BP newbuilds in the last quarter. Leendert Muller, managing director of Multraship, says the new vessel, a 70 tonne BP ASD tug, has most probably got employment for the rest of the year.

ITC Towage too, welcomed a newbuild recently, the 31 tonne BP multipurpose support vessel ITC Meltemi Shoalbuster, which is actually the firm’s first newbuild vessel for 30 years.

Iskes Towage & Salvage is another company adding to its fleet, with two 80 tonne BP tugs set to join, one at the end of July and the other by year-end. Ronald Vergouwen, general manager of Iskes, says these very powerful tugs are particularly suited for offshore work and moving rigs. These add to the 70 tonne BP Triton that joined the fleet in June 2008. As well as the new large tugs, Iskes also acquired two 30 tonne BP vessels from Bugsier Line.

One sector this company is targeting is the offshore windfarm sector. “We are anticipating that offshore windfarm construction will grow considerably in the coming years,” says Mr Vergouwen.

Iskes too, has seen the impact of less North Sea work and fewer rig moves but Mr Vergouwen stresses that the situation is not really terrible. Oil prices are going up again and there will be more exploration in the future, he adds. “We are confident that being flexible is appreciated by customers and that will allow us to weather the storm.”

The influx of newbuildings is, however, likely to outstrip the amount of work available. According to Fairmount Marine’s Paul Mulder: “We sure see that there are less enquiries in the market than in recent years. However, this does not only have to do with the global financial crisis. Oversupply due to newbuilding units entering the market and taking away spot opportunities is also having an impact on the available opportunities. The greatest challenge for 2010 will be to keep vessels booked at acceptable occupation rates.”

Raising the propellor of the MSC Napoli

Salvage looks to long-term solutions

Several salvage firms are continuing their efforts to develop long-term relationships with the industry. Svitzer Salvage is an example, and its new service, PreparAct, embodies this approach. PreparAct is designed to reduce risks by Svitzer experts knowing owners’ vessels in advance. Henk Akse, head of business development at Svitzer Salvage, says the company’s experts examine how well a vessel is prepared if there is an emergency.

“In the case of an incident, our people have direct knowledge of the ship and they can give advice. We try to prevent a minor incident turning into a disaster.” The first customer of PreparAct is Brazilian oil giant Petrobras.

Certainly, the towage and salvage operators are a pragmatic bunch, with the ability to remain calm in these turbulent times. Rather than being pessimistic, they believe these difficult times bring plenty of opportunities too.

Ongoing projects

When it comes to the salvage sector, work got underway to remove the final section of the MSC Napoli, the container vessel that grounded off the British coast after storm damage in January 2007.

The new salvage company, Global Response Maritime, positioned 12 lifting chains under the wreck and on 1 July, the stern section was finally lifted. Cutting is expected to take around a month.

All that glitters is not usually gold but in a recent wreck removal job Mammoet Salvage proved that this is not always the case. When the Polar Mist sank in January in the Magellan Straits off the coast of Argentina, there was much talk that she was carrying treasure. Speculation suggested that there was some 9.5 tonnes of gold and silver onboard, with a value of around €12 million. According to Baltic Magazine sources gold was certainly onboard, although the amount has not been confirmed. Mammoet Salvage started work on the salvage operation in June.

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