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Westfal-Larsen Shipping poised for growth

FOLLOWING the demerger of Star Shipping, Masterbulk Pte Ltd, through its wholly owned subsidiary, seeks to position itself as a dominant force in the general cargo transport sector.

Open-hatch bulk carrier specialist Westfal-Larsen Shipping, now an independent company, is free to pursue future success under its own flag.

On Jan 1, 2009, the two partners of Star Shipping completed a restructuring of the organisation into two independent companies. Under the previous umbrella of the parent company, Grieg and Masterbulk each shared 50 per cent ownership in the partnership.

The privately owned parent company of Westfal-Larsen Shipping, Masterbulk Pte Ltd of Singapore, is a wholly owned subsidiary of the Westfal-Larsen group of companies, headquartered in Bergen, Norway.

The operations of the now discontinued Star Shipping have been split between the two partners, with the open-hatch division divided geographically between Grieg and Westfal-Larsen, according to established sailing routes. This may work directly to Westfal-Larsen's advantage, given its strength as a carrier specialist.

Westfal-Larsen Shipping began the year with 19 open-hatch ships and three more under construction. For these vessels, the trade routes taken over by Westfal-Larsen offer a tangible benefit, allowing the carrier to continue working in areas it has served for decades.

'In the demerger, the shareholders divided cargoes and trade, enabling the previous owners to continue their respective trade routes,' says Tor Schumann Olsen, president of Westfal-Larsen Shipping. 'As part of the demerger, the commercial and operative staff that are operating the various trades have been assigned to follow their trade routes, while support staff was split between the two companies.'

For more than 100 years, Westfal-Larsen has been an important Norwegian shipping corporation. Founded in 1905 by Hans Peter Westfal-Larsen, the company's origins in the Norwegian shipping business run deep. In 1962, the group formed the innovative Star Shipping pool, with Per Waaler.

The shifting dynamics of forest products logistics throughout the first decade of the new century opened new opportunities for carriers, and Westfal-Larsen saw it as the ideal time to break new ground. With its headquarters in Bergen, the new company named Westfal-Larsen Shipping could focus on prospective markets where it had considerable expertise with its own offices and staff, such as in Rio de Janeiro, Livorno, Atlanta, Singapore, Shanghai and Dubai.

Tor Schumann Olsen was appointed president of Westfal-Larsen Shipping. He brought to the position a wealth of experience and thorough knowledge of the forest products industry, having started with Star Shipping in 1968 and working in various executive roles until his retirement in 2002. Understanding the key role that transport and logistics play in the forest products industry, he became one of the founding directors of the International Forest Products Transport Association (IFPTA).

He chose a management team for Westfal-Larsen that also has a long and successful track record in the industry. Einar Didriksen was selected as executive vice-president, responsible for all commercial activities. Joining Mr Didriksen on the commercial team was Ann-Christin Eggum, vice-president, chartering and operations. Both served in senior roles with Star Shipping before joining Westfal-Larsen.

The managers of the offices abroad also share a wealth of expertise - Philippe Wauters in Rio de Janerio, Ulf Eriksen in Shanghai, and Mike Hawe in Atlanta. 'All are guarantors that the best practices of servicing the forest industry over so many years will be continued by Westfal- Larsen Shipping,' says Mr Schumann Olsen.

Westfal-Larsen Shipping, by virtue of its experience in the industry, is one of the leading operators of open-hatch vessels. The prime focus of the business is unitised cargo, such as forest products and woodpulp, steel pipes and steel slabs, windmills and other project cargoes. The Westfal-Larsen fleet consists now of more than 21 modern open-hatch gantry crane vessels, with a 55,000 dwt newbuilding on order for delivery in 2010.

Most of these vessels have a crane-lifting capacity of 70 tonnes, offer rain protection for all-weather loading and discharging, and can offer between-deck cargo hold divisions. The vessels are owned by Masterbulk and operated by Westfal-Larsen Shipping.

The trade routes serviced by Westfal-Larsen Shipping are primarily from the fastest growing forestry production areas of South America. Vessels from these ports reach up to six monthly sailings to North Europe, US East Coast/US Gulf and Mediterranean ports. In addition, there are regular sailings from South-east Asia and China to Europe and North America. The combination of forestry and project cargoes yields optimum use of the vessels' cargo capacity and design features.

With a strategic base of regional offices worldwide, Westfal-Larsen Shipping plans to continue offering regular service from a number of ports. The goal is to supply high-quality transport and logistic services on a fixed schedule that can be flexible enough to accommodate clients' needs.

A vision for the future was a hallmark for the creation of Westfal-Larsen Shipping - the plan was always to optimise the focus on open-hatch gantry crane shipping and the possibilities it provides. When the demerger was agreed between the shareholders, the dry bulk shipping market was still at its peak - a boom never experienced before. However, the financial crisis that followed last year and into this year led to an unprecedented, almost instantaneous, collapse of shipping markets as the world economy slipped into a recession.

'Against this, on the tonnage supply side, during the boom, a record number of bulk carriers were contracted,' Mr Schumann Olsen says. 'Due to the current shipping market, a lack of financing and delay of deliveries by shipyards, we have lately seen a great number of orders being cancelled. For the shipping industry, this is good news, as the tonnage overhang has depressed the outlook for the future.'

As for the forestry industry, from a shipping company's perspective, the crisis has amplified the trend shift from north to south, with more and more production now being based in the Southern Hemisphere. The weaker markets for forest products have increased the level of unpredictability and it is not uncommon for clients to fail to meet volume commitments.

'We see more and more volume moving from the newly established producing areas into the well-established markets like Europe and the US,' says Mr Schumann Olsen. 'These volumes are replacing local production in these regions. There will definitely be a need for quality transport of large volumes in the future to cater to this trend. The specialised open-hatch gantry crane vessel will be in demand now and into the coming years.'

With one of the most modern open-hatch fleets, Westfal-Larsen Shipping stands to meet its goal of once again becoming one of the main players in this market.

The writer is president and CEO of Masterbulk Pte Ltd