The world will have to recover gradually from the severe and protracted economic crisis. What strikes is that certain parts of the world, such as the United States, are achieving better progress in the bid to return to a more normal rate of economic growth. Meanwhile, Europe is still contending with an economy that’s failing to gain momentum. It will take plenty of time to return to a normal economic growth trajectory. However, dispite this economic climate 2014 had been a busy year for Royal Wagenborg. The company anticipates a sluggishly-recovering economy for all companies within the Group.
Mr. Egbert Vuursteen and Mr. Rob Wagenborg (both CEO of Royal Wagenborg) give a retrospect on a turbulant and hopeful year.
The market operating environment for Wagenborg Shipping in 2014 was quite a challenging one. Europe had to contend with hesitant markets, where the transport capacity on offer often exceeded demand, resulting in continuing price pressures. Our chartering-related contacts who ship to the United States enjoyed a distinctly better market, while the outlook for that part of the world is also quite promising.
Several ship transactions were undertaken in the past year. A series of 20-year-old, 4,000-tonne vessels were sold. A limited number of transactions also took place involving shipping tonnage being bought to be converted into special vessels, such as cementcarriers.
The Reggeborg and Roerborg cargo vessels were recently delivered by the Ferus Smit shipyard, with the Roerborg being built in co-operation with Royal Niestern Sander. These 23,000-tonne ice-classed eco vessels meet the requirements very well. These multi-purpose vessels are economically efficient thanks to their load-capacity/fuel-consumption ratio. With only 4,500 kW, these vessels are included in the Finnish/Swedish 1A ice class by virtue of their efficient hulls shapes, eco-bows and nozzles. These ships are world champions on the EEDI (Energy- Efficient Design Index).
Owing to the structural decline in paper-consumption levels in Europe, Stora Enso’s cargo payload is sufficient for only 2 Ro-Ro vessels on the Gothenburg- Zeebrugge route. In early January, we therefore sold our third ship, Spaarneborg, to Cobelfret. The contract with Smurffit Kappa for the ice-reinforced Ro-Ro vessels Balticborg and Botniaborg has been extended until 2020. This shipping line serves export markets for Germany, The Netherlands, Belgium and the United Kingdom, where there has been a significant rise in the volume of packaging materials. The sharp rise in Internet orders has produced a huge demand for durable packaging materials.
Wagenborg reached an agreement with Finnish Rettig group concerning the long-term shipping of several million tonnes for Rettig subsidiary Nordkalk. It was also agreed that Wagenborg should purchase the remaining multi-purpose fleet of the Rettig subsidiary Bore Shipping, comprising four iceclassed 4,000-tonne vessels.
As a result of selling older vessels and commissioning newer ones, Wagenborg and its affiliated captainowners can now boast one of the youngest fleets in the world, with an average age of seven years. Thanks to the sizes, variety and trades involved, our chartering services helped to improve Wagenborg’s contract coverage further, to create a sound basis for the future.
Wagenborg Towage succeeded in making a further positive contribution to performance. The porttowing service was busier than usual in the second half of the year as a result of providing support to miners supplying the RWE coal-fired plant located at Eemshaven, The Netherlands.
The “Wagenborg Barge 10” pontoon (100 x 33 m) was added to the fleet in September 2014, while the Crewtender “Waterlines”, which was formerly half-owned by the shipbuilders Veka, is now whollyowned. Scheduled to be delivered in Rotterdam in 2015 and lying at the Chinese shipyard, the newlybuilt “Wagenborg Barge 11” pontoon (122 x 36 m), has now been taken into stock. Built in 2008, “Wagenborg Barge 4” (100 x 25 m) was sold in December.
Wagenborg Stevedoring had a good year. Performance was better than originally expected. Bumper crops of northern sugar-beet resulted in a huge quantity of large bags of sugar being put into storage in Eemshaven. Large volumes of raw sugar are being stored at Wagenborg’s Bulk Terminal. Together with Wagenborg Nedlift, Wagenborg Stevedoring has managed to hire out a major portion of the terminals and sites at Visserijweg to Bilfinger. Although the Bard project has been completed, Wagenborg Agency nearly matched the record in terms of ships.
Notwithstanding the crisis, Wagenborg Nedlift managed to perform well in the cranes, special transport services, assembly and projects branch, thanks to the support of all sites, both the familiar ones in Netherlands and Germany and the new location in the southern part of Netherlands, also via the new organisation in Spain.
Thanks to good cooperation with Reining for the NAM-Norg project we succeeded in extra turnover by use of a just in time delivery system which madeit possible for NAM to work in one location with sometimes 1700 subcontracted workers without any logistic disturbance by distribution of needed materials.
In forthcoming years, Wagenborg will continue to make targeted investments in order to regulate the average age of the fleet. Examples of these will emerge over the coming period with the arrival of new equipment.
In the wake of a successful management buyout (MBO) in the month of May 2014, Reining now comprises only Reining Warehousing as far as Wagenborg is concerned. Thanks to the MBO, Reining Transport has been acquired by a group of transport enthusiasts who have significant investment plans for the company, so that Reining can expect to enjoy fresh momentum in the future. Under this heading we would also like to thank everyone who made a contribution to Reining Transport over all the years it has operated within the Wagenborg fold.
Wagenborg Passenger Services
Wagenborg Passenger Services has also had a very busy year. We are still satisfied with the investment in the elevated parking facility, in spite of the vulnerability of the area, which we are certainly keeping a close eye on.
In the wake of 12 years of negotiations between owner(s) and the authorities, a 15-year agreement has been reached, whereby Wagenborg will enjoy exclusive rights to operate the ferry routes between the mainland and Ameland or Schiermonnikoog. We believe that Wagenborg, with the support of its loyal staff and its new management team, can look forward to the future with confidence.
Wagenborg Offshore covers a land oriented and the maritime division, The maritime part has operations in Asia, Africa, South America and Europe. In Asia we are working with 25 units in the Capsian Sea. In
Africa we are working in particular with Boskalis/ Van Oord where the consortium is tasked with completing the new Suez Canal in 2015. In South America, we operate in Brazil under a partnership arrangement with a Russian associate.
Our activities in Europe have been given a boost thanks to a 10-year contract for Shell/NAM in the Southern North Sea. NAM, as the operational manager, commissioned Wagenborg to produce a design for a unique maintenance ‘Walk-to-work’ vessel with which maintenance operations can be carried out in a safer, more efficient way, based on more effective working hours.
As well as its maritime operations, Wagenborg Offshore also operates on land, with Foxdrill and Wagenborg Oilfield Services (WOS) as spearheads. WOS recently opened its second site in Russia, where the oil and gas companies make exacting demands in terms of services. Despite possible trade sanctions, there is plenty of potential to develop collaborative relationships with the Russians.
A new contract was recently closed between NAM and Wagenborg Foxdrill, which is involved in the assembly and disassembly of drilling rigs, producing manuals under this heading, the adjustment and maintenance of drilling rigs and conductor driving. The contract was entered into on the basis of cooperation with a test specialist with a view to servicing equipment in Schoonebeek. We welcome these developments in the case of Foxdrill.
“"We are expecting the European economy to be faced with further difficult challenges in 2015. Provided we can manage to be inventive enough, adopting a “Sign of Solutions Spirit”, and persevere enough, we are bound to find answers to all the challenges"”