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CEO's Column - NORDEN News Magazine Autumn 2012

The Blue Denmark must be strengthened

The dry cargo and tanker markets are still struggling with low spot rates as a result of a structural oversupply situation.

Since the last NORDEN News, rates have dropped further, and they are now at the lowest level since I started in shipping (1986). There are simply too many vessels for too few cargoes.

Fortunately, our long-term coverage strategy and customer focus provide NORDEN with a certain protection against the low spot rates. Thus, in the first half-year, we delivered a reasonable result – considering the bad markets and the extraordinary write-downs – and not least a satisfactory cash flow.

At the same time, we are still in a very strong position to take advantage of the decreasing vessel prices for acquisition. Thus, we contracted 2 new and very fuel efficient product tankers in the previous quarter.

I have said it several times before, and yet I say it again: Shipping is a cyclical business – and it will continue to be.

All in all, we are well underway with our strategy Long-term Growth in Challenging Times – even though the freight barometer has gone from bad to worse in the last couple of months. And it is not only in shipping that we are structurally challenged. This is also the general case in Denmark and in the rest of Europe.

Therefore, I accepted the government's request to become chairman of the Growth Team for the Blue Denmark in March 2012.

We have had to set forth specific recommendations for initiatives to strengthen growth conditions within the maritime area. We have therefore focused on areas with growth potential where we can make use of our global position of strength. The preliminary recommendations have been handed in, and the final recommendations will soon follow. It has been an interesting job, which confirms my belief that the Blue Denmark, to a great extent, is a position of strength. A position of strength, which we have to secure and develop for the benefit of growth and employment.

In this connection, it is natural for me to point at NORDEN. During the last 15 years, NORDEN has been a living example that you can grow a Danish-based shipping company.

I am therefore looking forward to receiving an action plan for the Blue Denmark from the government.

Happy autumn and happy reading.

CARSTEN MORTENSEN

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