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Interim CEO's Column - NORDEN NEWS Magazine Autumn 2014

The daily test

As interim CEO, I have now had the opportunity to follow the everyday life at NORDEN for a couple of months. It has been a very positive experience, and it has confirmed my view of NORDEN as a first class shipping company with competent and dedicated employees who also know how to welcome new employees – including me.

By personal experience, I have been able to establish that safety is a crucial and integrated part of NORDEN. Therefore, we at NORDEN place great emphasis on the fact that safety should never be compromised when it comes to operation of our vessels. It takes significant resources and constant attention, but the alternative is non-existing. As you can read from page 4 and onwards, focus on safety i.a. means that NORDEN’s tanker vessels are constantly being put to the test. But this does not only go for safety on board the vessels – it goes for the whole business. NORDEN is daily put to the test in fierce competition with other shipping companies and operators, who like NORDEN are pursuing the next good contract.

This competition takes place in a market which, contrary to expectations, did not gradually improve during the first half-year. The second quarter turned out to be very challenging with i.a. historically poor Panamax dry cargo rates in the Atlantic among other things. Thanks to a business model where owned vessels are supplemented by chartered vessels, NORDEN is able to adjust to changes in the markets. And we have made use of this flexibility. From the beginning of the first quarter and over the summer, NORDEN e.g. reduced the active Dry Cargo fleet by 15%. On page 9, you can read more about how NORDEN’s strategy has been adjusted to the current market conditions. We cannot change the market conditions so we are focusing on the parts of the daily operations that we are able to influence.

With new tools, targeted initiatives and constant attention, NORDEN has e.g. succeeded in substantially reducing fuel consumption on our vessels. A systematised surveillance of fouling on ship’s sides and cleaning of this has alone resulted in a reduction in fuel consumption of 2%. This may not sound as much, but it should be seen in relation to fuel costs in 2013 of USD 671 million. You can read about this on pages 14 and 15.

Systematised cleaning of ship’s sides is an example of how we are optimising in the short term. At the same time, we also make sure to achieve long-term advantages. This is i.a. done by means of an order book, which as per 15 September counted 35 fuel efficient eco vessels of which the majority is Japanese dry cargo vessels. For more than 140 years, NORDEN has passed the daily test, and we will continue to do this thanks to initiatives which bear fruit both here and now and in the long term.

Enjoy your reading.

Klaus Nyborg, Interim CEO

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