Danish Maritime Magazine 03-2011

DANISH

ERHVERVSMAGASINERNE

M ARITIME MAGAZINE 3 - 2011

New generation of SCR technology for NOx reduction Competitive Danish Conditions Effective dialog creates envy Against the ow

Photo: Olympus, Sirius Rederi

DANISH

ERHVERVSMAGASINERNE

M ARITIME

3-2011

MAGAZINE 3 - 2011

New generation of SCR technology for NOx reduction Competitive Danish Conditions Effective dialog creates envy Against the flow

4 6 8 10 12 14 16 18 20 22 24 26

Competitive Danish Conditions for the Shipping Industry Authority pushing for growth: Effective dialog creates envy Framework consensus - a Danish speciality How to maintain the global lead Green growth in Blue Denmark We need to educate 10 times as many International top competence for shipping industry Against the flow The new generation of SCR technology for NOx reduction All-round repairs in time and on budget Danish shipping companies participate in the Blue Belt project Clorius Controls takes off the pressure

ISSN: 1903-5888 Editor René Wittendorff rw@erhvervsmagasinerne.dk Ads Anders M. Petersen Phone.: (+45) 7077 7441, anders@erhvervsmagasinerne.dk Publisher ErhvervsMagasinerne ApS Jægergaardsgade 152, Bygn. 03 I 8000 Århus C Phone.: (+45) 7020 4155, Fax: (+45) 7020 4156 Printing: PE offset A/S Layout: Michael Storm, Designunivers Next issue: 19th of August 2011 Copyright

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Competitive Danish Conditions for the Shipping Industry Shipping is a global industry Danish Shipping has 75 percent of the activity outside the EU is at the forefront of globalisation. Danish shipping companies position their activities in the global growth centres and have over the years gained market shares, to an extent that Denmark is now persistently among the top 10 maritime nations in the world with 60 billion TDW controlled

by Danish companies.

Conditions need to be benchmarked against Singapore That Denmark is one of the worlds leading shipping nations in not only the result of our long tradition for shipping and generally well run shipping companies. Political support that over the years has resulted in an internationally competitive economic framework is a necessary precondition. Danish politicians and competent authorities have since the late 1980ies realised that shipping companies compete in a world wide market without significant barriers to trade. The main competitors are therefore not companies from our neighbouring countries but from the leading shipping nations around the world and vessels from open registers. The latest plan for maritime growth launched by the Danish government exemplified this understanding and was based on a comparative analysis of the conditions for shipping in key EU countries as well as in China and Singapore.

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The basic economic components of the shipping conditions in Denmark are the international ship register DIS and the tonnage tax. The DIS enables Danish shipping companies to fly the Danish flag on vessels trading globally.

Seafarer tax exemption and the possibility to employ foreign seafarers on local wage conditions are the key components.

The tonnage tax is today a global standard and it is estimated that more than 90 percent of international shipping is operated under tonnage tax or a similar system. The tonnage tax is a fixed tax payment depending on the volume of tonwnage

operated by the shipping company and not the actual profit/ loss balance. This gives the companies a predictable and competitive tax payment which frees decisions on investments in new vessels from tax considerations which used to be a substantial factor.

A global level playing field A common feature of these two measures is that the companies and seafarers do not receive any direct subsidies from authorities but only a reduction of costs. That gives two advantages. First of all normal competitive pressure continues to apply to the ship-

ping companies, because loss giving activity does not benefit from a competitive tax regime.

Secondly, these measures do not lead to a subsidy race between nations. Given that the major shipping nations in the world have adopted a similar shipping policy, the result is that shipping companies that are active globally compete on equal terms and business acumen rather than public policy is decisive for how well the shipping companies fare in the market. Put in another way, competitive national shipping conditions are an entry ticket to the world market, but not a competitive advantage. It is pleasing to note that the EU has come to the same realisation and have established maritime guidelines that promote such solutions.

Table 2.10: World Merchant Fleet by Operator Domicile, 1 January 2011 (see note) No.

Country

GT (1 000)

DWT (1 000)

GT in pct.

No. of ship

1.

Japan

113.914

166.141

12,52

6.180

2.

Greece

70.682

123.482

7,77

2.476

3.

China

65.573

102.438

7,21

4.188

4.

USA

48.655

65.267

5,35

1.600

5.

South Korea

46.518

68.072

5,11

2.143

6.

Germany

45.166

63.442

4,96

2.399

7.

Denmark

42.117

57.651

4,63

1.525

8.

Singapore

40.596

68.482

4,46

1.923

U.K.

32.235

47.970

3,54

987

Hong Kong

32.026

52.396

3,52

1.376

9.

10.

Competitive Danish Conditions for the Shipping Industry

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Economic indicators develop positively The key figures for Danish Shipping clearly demonstrate that the combination of competitive economic conditions and skilled shipping employees and companies lead to positive results. The merchant fleet under Danish flag has never been bigger and foreign currency earnings and value added place shipping and the surrounding maritime cluster as one of the most important industries in Denmark. A simple illustration of the importance of public policy for the development of international shipping activities is a comparison of the historic development of the Danish merchant fleet with its counterparts from Norway and Sweden. These three Nordic countries all had important merchant fleets in the begin-

ning of the 1980ies when economic recession and globalisation lead to flagging out. This trend was reversed with the introduction of international registers or in the case of Sweden other support measures.

As our competitors followed up with tonnage tax or other measures, Denmark and Norway followed suit around the new millennium, whereas Sweden has yet to introduce tonnage tax. Denmark has accelerated the growth since then while Sweden and Norway has continued the decline in their national fleets. It must, however, be underlined that measured in numbers, the Norwegian fleet is developing quite positively as political conditions seem to have stabilised.

Graphs showing the relative development of Danish, Swedish and Norwegian flag

Political backing and adjustments are necessary This little case story demonstrates at least to two points.

First of all that the economic conditions for a global economic activity must be monitored and adjusted continuously to take developments in the key competing nations into account. And secondly, that the rules and regulations in themselves are not enough. In order for shipping companies to place significant investments in a country the decision makers in the countries need to have confidence in the longevity of the rules. A broad political support for the industry is crucial in that respect.

This article is about economic conditions but it is important to underline that much more has to be done to develop as

a maritime nation. The skills of shipping employees must be developed, technical and environmental rules must be in place, the presence of a complete maritime cluster with different strengths, general conditions for doing business in the country should be competitive.

Shipping companies need for example also to be able to attract key employees from abroad for positions ashore.

This general package has so far been good enough for Danish Shipping to develop, but as our competitors continue to develop, so must our home conditions.

By Head of Division Jacob K. Clasen, Danish Shipowners’ Association

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Competitive Danish Conditions for the Shipping Industry

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Authority pushing for growth:

Effective dialog creates envy The Danish Maritime Authority is doing a never ending effort to support the growth and development of Danish shipping not only by facilitating the administrative procedures, but also by actively pushing development through the official program “Denmark as a leading maritime nation” For Birgit Sølling Olsen, vice director in the Danish Maritme Authority the challenge is - within one and the same authority - to cooperate progressively with the shipping industry and fullfill the role as the respected authority and regulator.

However this is done in a way, which is envied by many.

- 2010 was a year with increasing tonnage under Danish Flag. BT grew from 11,5 to 12,3 million tons, which led to a higher level of activity in the Danish Maritme Authority in terms of shipping registration, survey of ships, manning, training and supplementary education and certification.

- The main challenge was – in accordance with the program from the Danish ministry of Economic and Business Affairs - to maintain and strengthen a leading Danish position in shipping, and it is quite positive that we managed to do so and see growth under Danish Flag even in a year, when the global shipping market, in which Danish ships compete, was still characterized by the economic crisis, she says referring to the newest figures.

- We note that new shipping companies are establishing themselves in Denmark. This is a new tendency, so far consisting mostly of Swedish companies, setting up business here.

- This is a parameter of growth as well as the more traditional indicator, the foreign exchange earnings, which after a declining period is on its way up again. On top it amounted to190 billion Danish kroner, while we are now around 175 billion and still climbing.

- Another growth parameter is the ability to invest in new tonnage.

Denmark has traditionally had a huge new-building program, and this is still the case.

- So new shipping companies and more ships indicates growth

framework conditions: Good and stabile framework conditions as tonnage tax, DIS register are of the essence - including the latest growth-initiative from the Danish government allowing more flexible use of foreign ship masters.

Until now this was seen as a barrier for flagging in, when some companies want to flag in ships from elsewhere with the existing crews.

- There may be various reasons for this. Some have justified it, saying that it has been impossible to obtain enough Danish labor, while others point out that it is important for shippers and goods-owners that the crew know the ships – especially in the tanker market, where there is great awareness of the quality of service, which requires something extra.

- So the latest addition here is the new regulatory package adopted 1. of June, where we got more flexible rules for shipping companies to use foreign masters in a percentage rate of 4060, while the seafarers have an increase in tax-deduction which should make the Danish seafarers more competitive, when working on non-DIS-ships and thus making it easier to find employment on foreign ships. In this way it should be possible to preserve the Danish maritime competences the more so as, we have got confirmation from the shipping companies that they will continue to provide the required number of training places, she says to complete her overview of important growth-issues in Danish shipping.

- Denmark has had a long term commitment to the framework conditions. It is obvious that that there must be political support, when we talk about changes in taxation arrangements and that

together with reports from the shipping companies, that they prefer the Danish Flag and that of Singapore, Birgit Sølling Olsen states.

sort of things.

- We also face limitations, such as having to stay within in the EU state aid guidelines. It is the outer frame, in which we have to operate, set up by the EU to safeguard against uneven playing field among the EU-member states. At the same time EU focuses on the international competitiveness, and this is why there are special state aid guidelines for shipping.

Centers in focus She finds that they concentrate more and more on centers.

- This is a new trend, and we are aware, that it is important for the shipping companies that there is clear political support to the

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Authority pushing for growth: Effective dialog creates envy

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Open access Birgit Sølling Olsen points out, that framework conditions such as taxes and DIS—register and the like are set by the government.

- We in the Danish Maritime Authority can’t determine things like that. But we never the less have an influence, which was important when the action plan for Denmark as a leading shipping nation was created. There is truly something you can do within the administrative framework. You can decide to be open and approachable and work to eliminate unnecessary administrative burdens. Work to be a competent authority that can provide unbiased advice and guidance. It actually means a lot to shipping companies who consider Danish flag, that they are talking with a competent authority, who can advice them and quickly resolve a case. This might seem simple, but anyone who has had contact with public authorities values efficiency, speed and a qualified service. That is what we hear from the companies, and that is what we strive to deliver, she says.

- The same goes for the work on education and maritime skills.

How do we get training plans to fit the requirements of the industry. This as well is an effort that can be done within the administrative framework.

- The relationship between the authority and the user is important. How can you get in touch with us. Can you handle the various paperwork electronically from your own office? For us availability is also to meet the users on their terms, thus making it more attractive to be a shipping business in Denmark – not to mention how much we are focused on the international issues.

Trendsetter - You must act as a trendsetter to get influence on international law, that ends up being the framework for all global operations.

We’re working to get high standards, which on one hand benefits the environment but on the other hand, also will have a content, so that they can be implemented by carriers in the real world. The standards should not be lofty goals.

An administration as ours can focus on this and try to find international solutions ensuring a level playing field and high standards, Birgit Sølling Olsen, underlines.

- The Danish Maritime Authority has been launching “Green Ship of the future” where we have tried to pair companies to get them to work together in user-driven innovation – for instance in developing new engines. Currently we have taken the lead in a LNG

project, where we focus on the need for intra-structure to facilitate the use of LNG as fuel. This has a very practical purpose. Short sea shipping industry has great expectations in the LNG field.But what comes first, the chicken or the egg? If shipping companies are to enter this field and invest, they must be sure how the infrastructure and LNG stations in the ports will be established. What is appropriate, what about cost and who would head such projects. Can it be implemented at all and what is a good business case for it.

- Here we can be a facilitator and investigate the possibilities on behalf of everyone, not just certain companies. Here we can make a difference by having a nose for where to make an effort. Instead of running after the development we try to be ahead of it and influence it. That is better than spending the time on damage control.

We say: How can you influence development in the right direction.

Birgit Sølling Olsen states that DMA – to the envy of many not at least abroad – has a fine dialogue with the profession.

- We do not always completely agree on everything, and neither we should.

- As an authority, we have several stakeholders, whose interests we must defend, so we can not be a lobbyist for the industry. Authorities have their own agenda. But at best they balance the different considerations - to protect environment and other efforts that Denmark priorities. It’s not just a question about the bottom line for companies.

Be the first - But we are having a truly positive dialogue with the industry and its organizations. It’s basically because of great harmony. If a company wants to have a strong global activity, they need to recognize that the environmental issues are here to stay: We should be more green. This is how times are today, and there are no major policy-related differences. Running businesses today is also a question of image and branding, and this requires quality and awareness of the trends. You have to pay something for a good climate and good environment. As trendsetters for environment and quality shipping Danish shipping companies – and the DMA – often prefer be the first to do today, what will be demanded tomorrow, Birgit Sølling Olsen says.

By Finn Bruun

Foto Birgit Sølling Olsen Quality shipping under quality flag.

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Authority pushing for growth: Effective dialog creates envy

7

For years there has been political consensus on the important framework conditions for the Danish shipping industry. This is not going to change, even if this year’s general elections should result in a new government, which polls at the moment suggest might be the case.

For quite some time the government has worked to support Denmark as a leading maritime nation. And the opposition clearly states that they are going to continue this policy.

One of the leading figures in the opposition, Ole Sohn, spokesman on financial policy, SF, says that it is crucial to maintain political consensus on framework conditions in order to assure as well the Danish business world as foreign investors that the conditions are stabile.

The most important changes in framework conditions that have been obtained within the recent years was establishing the Danish register DIS and the tonnage tax.

A newly passed law allowing more flexible use of foreign masters, when ships come under Danish flag shows the consensus.

And the chairman of The Danish Shipowners Association, Lars Vang Christensen, finds no reason to expect changes in the general political support to better conditions for the shipping industry.

Lars Vang Christensen

8

Framework consensus

Brian Mikkelsen

- The framework conditions that we have today are established by a vast majority in Folketinget. Successive governments have all been supportive. Why would anyone want to change that. On the contrary: We have growth, we have high international standards, and we deliver strong foreign exchange earnings, he says stating his will to cooperate to reach further improvement.

The new law on nationality of ship masters was followed by an increase in seafarers tax deductions in order to make them more competitive on foreign ships.

The minister of Ecoenomic and Business Affairs, Brian Mikkelsen, took the opportunity to line out the government’s position on framework conditions: The shipping companies get a stronger position in the competition as the framework conditions match those of other big, competing maritime nations like Singapore.

- It is very important to me that companies continue to choose the Danish flag for their ships. It also requires that we maintain a critical mass of maritime skills, and that we improve the Danish maritime employment conditions in the global maritime competition.

Shipping is a stronghold Ole Sohn, who by commentators is expected to become a minister, if his side should win the election, finds it important that the maritime sector is a growth area, where Denmark has a special position which he would like to help develop further.

- Shipping is a stronghold and a main growth engine. It is vital that we maintain focus on further development.

- I believe it is crucial for the shipping industry and generally in business policy to have consensus. Changes should be adopted by a wide majority, so that both the Danish business community and the foreign

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investors can see a stabile common line in the parliament, he says.

Ole Sohn finds the thought of Denmark as a maritime center an exciting prospect and is willing as a politician and legislator to contribute: - We do have some proud historical traditions as a maritime nation. and we are one of the countries in the world who are most up-to-date. With major global players and leaders in the global market, we must naturally be able to grow a strong industry supplying the maritime sector. The opportunities are great.

- When we talk about manning of vessels there are two considerations. Firstly it is a global industry, which must be able to compete on the international market and next we have to be aware of employee’s interests - the Danes who are employed on the ships and the workers generally. It’s a trade-off, and solutions can be found.

- We have said that when reforms are to be made - also in relation to shipping - we would like to contribute to a policy in consultation with the industry and the unions to find a common model. After all we share a common interest in ensuring that the industry can maintain its position, he says and adds: - I am pleased to note that the shipping industry is aware of the environment and for instance developing less CO2-polluting engines.

- And I definitely think that we with the development of a maritime center could also be a leader in ensuring a greener transportation. Not because I want national rules – I don’t - but we should take the lead and be the ones who keep pushing on both in the EU and globally at IMO level to have environmental and climate challenges taken seriously, Ole Sohn states.

Not just a register Niels Sindal has for years taken keen interest in maritime policy in the leading opposition party, Socialdemokraterne. He is a long time supporter of stabile framework conditions and broad consensus in maritime politics.

- Through the years we have managed to make extensive agreements, and I expect this to continue. We have a strong international position, and Danish shipping has the possibility to further develop, Niels Sindal says and stresses, that training and employment of Danish seafarers is important.

He warns that Danish shipping must not be reduced to just a ship register.

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- I am very interested in developing education and securing employment of Danish seafarers. This employment onboard the ships is the foundation for the development, so we should never be too keen to take foreigners in, if they are not participating in the development of shipping. It is very important to us that we create a maritime nation and not just a ship register as they do in Norway. Alright, they have the big exhibitions, but they do not come even close to the development, that we have in Denmark. These things are connected, he underlines.

He sees the new law on nationality as part of the consensus: - We had to give in a bit, but in return the minister and the parlamentary comity on business and commerce gave handshake on the continued development of the Blue Denmark including the recruitment of people at several levels in the shipping industry, says Niels Sindal and adds: - We are constantly aware of Danish shipping and work seriously to provide the right framework. The shipping companies in Denmark have reasonable framework conditions. The Danish maritime sector is a stronghold and one of our hobbyhorses. It can be expressed this way: Strong framework conditions for strongholds.

By Finn Bruun

Ole Sohn

Framework consensus

9

At CBS ten researchers, including PhD students, comprise the Centre for Shipping Economics and Innovation, where they investigate various aspects of the development of maritime business in Denmark. At the moment they are looking for funding for specific research projects. A situation that may be seen to reflect the resources and interest invested in the Blue Denmark.

One of the initiators to the maritime research centre is associate professor Henrik Sornn-Friese. He has spent the last 8-10 years researching business economy and globalization especially in relation to maritime clusters, shipbuilding and interfirm linkages, and he is concerned about the future prospects.

- Politicians and the maritime industry should contemplate the long-term effects of outsourcing, which may be potentially unfavourable, but they lack scientific evidence of the possible consequences, he says.

How to maintain the global lead For decades, the Blue Denmark has been known as a world leader in maritime products and services. But lack of political interest and international outsourcing may undermine the current position.

What defines a maritime cluster?

Before discussing outsourcing it is important to take a look at maritime clusters, and the concept alone is debatable in a Danish context.

- Most people use the term ‘maritime cluster’ synonymously with the Blue Denmark, but in a strict economic sense a cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions. In its broadest sense, the Blue Denmark has not been able to demonstrate this interconnectedness except in very limited geographic areas, Henrik Sornn-Friese explains.

The Danish Ministry of Economic and Business Affairs has identified 22 clusters in Denmark. Their definition is based on purchase and sales relations across sectors – a kind of inputoutput approach – and in this perspective, as also recognized by the maritime authorities in Denmark, the Blue Denmark does not qualify as a cluster.

- It makes sense to talk about micro maritime clusters in limited geographic areas like Frederikshavn, North Jutland, where there are definite interfirm linkages between harbour, suppliers and shipowners. Similarly in Copenhagen, where you have a great concentration of classification offices, shipowners, authorities, and policy makers. And in Esbjerg where there are connections between the harbour, the off-shore industry, equipment and service industries. But apart from that you cannot with any certainty demonstrate that the different maritime sectors and businesses in Denmark are mutually dependent upon each other, says Henrik Sornn-Friese.

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How to maintain the global lead

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Workforce movements - Still, it is evident that Denmark holds a very strong position as a maritime nation. In the past, we have fostered some of the world’s leading suppliers of maritime components and equipment. Companies like Hempel, Viking and Man Diesel are leading within their respective fields. These companies grew and developed their know-how and products in close interaction with Danish shipyards and shipowners, so cross-relations are a means to global success, says Henrik Sornn-Friese.

He is presently working on an analysis of work force movements across the maritime sectors in order to identify interfirm linkages.

A lot of young people get their training at maritime colleges and spend some years at sea before wanting to settle down. When they find jobs on land, they normally choose a maritime career path.

- By looking at labour flows - that is where maritime officers find employment and how they are recruited - we may be able to identify whether training of navigators and engineers creates value for other maritime industries. My research so far indicates a work force connection between shipowners, pilotage, safety equipment, etc, so there seems to be a link although it is very shiporiented, says Henrik Sornn-Friese.

Long term effect of outsourcing From this point of view, it is interesting to consider outsourcing of back office functions and the staff onboard ships. Shipowners have been arguing for the right to use mariners and ship

officers without EU passports in order to cuts costs. But no one knows what effect the absence of Danish professionals onboard the DIS registrered ships will have at the end of the day.

Labour flow studies can also be used to identify competition parameters. Some companies, especially within maritime manufacturing and service industries, may improve their competitive edge from the know-how induced by staff members with a seafaring background. If these competencies are lost it may affect entire industries.

- Shipping is one of the most international industries we have got, and shipowners have been outsourcing abroad for the last few decades. This means that some functions and the competencies are removed from the home office and potentially lost in the home country. The question is whether there is a critical limit to international outsourcing? And whether international outsourcing will eventually undermine long term development and growth within blue Denmark?

Henrik Sornn-Friese has not got the answer, but points out that evidence from the US suggests that people who have been made redundant in their own line of work gain jobs with a lower value for society – typically in the service sector.

- So there are several potential dangers, and both corporate actors and public authorities share an interest in maintaining a strong maritime industry in Denmark, says Henrik SornnFriese.

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How to maintain the global lead

11

Green growth in Blue Denmark Three years ago four leading Danish maritime companies and the Danish Maritime Authority established the Green Ship of the Future project in order to further improve the environmental and climate profile of ship transport. Today, the group consists of 25 leading Danish companies with backing from industry organizations and public authorities, and the initiative has become a valuable driver for green innovation and product development.

Mogens Schrøder Bech, MSc Economist and Head of Division at the Danish Maritime Authority, has studied R&D and politics in the maritime sector for at number of years, and he is impressed by Greenship’s ability to drive innovations in a partnership between various players from the Danish maritime industry.

- It is important to understand that in Denmark the maritime industry develops new products in partnerships between equipment manufactures and shipowners. This contrasts a product development which springs from university research to a development phase – also at universities or in private enterprises – before companies decide to invest time and other resources in product innovation and demonstration.

A long chain of activities link research to the launch of new products, and a country like Norway manages to nurse and connect all links. In Denmark, however, new ideas are mostly user driven and private enterprises form partnerships to turn them into commercial products. This method is common to all projects under Green Ship of the Future, says Mogens Schrøder Bech.

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Green growth in Blue Denmark

First mover advantage Developing new products in a partnership between users and suppliers creates a number of opportunities. The end users, typically Danish shipowners, gain competitive advantages by accepting responsibility for testing new technology or ways of working while suppliers get valuable references.

Several projects under Green Ship of the Future illustrate the point. For instance, D/S NORDEN has made a new build 38,500 DWT tanker available for a study designed to find technologies to meet the International Maritime Organization’s emission levels for ships sailing in the Emission Controlled Areas (ECA) by 2015. Other companies like MAN Diesel and Aalborg Industries chip in with products and knowledge on various abatement technologies. The objective of the project is to set up practical solutions and uncover the financial aspects regarding installation, operation and maintenance of the three most realistic alternatives which are low-sulphur fuel/distillate, LNG as fuel, and scrubber technology.

- A project like that benefits all involved parties. Companies specializing in engine development, retrofitting and scrubber

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technology get new products tested and documented prior to a commercial launch, and ship owners get experience with new technologies before their competitors just as there may be some cost savings involved. All first movers gain something, if you look at the entire value chain from start to finish, says Mogens Schrøder Bech.

The underlying project model demands a consultant able to bind together different equipment manufactures. This and similar projects benefit of financial assistance from the Danish Maritime Fund to a consultant. The Fund hereby supports a valuable innovation model for the Blue Denmark with its wide dispersion of companies.

Regulation or competitive edge driven innovation Green Ship of the Future also has projects involving a 8500 TEU container ship and a bulk carrier testing water in fuel (WIF), exhaust gas recirculation (EGR), waste heat recovery (WHR) and other systems that reduce the emissions of CO2, NOx and SOx. And there are several LNG powered ferry projects.

All these projects are driven by public regulations setting the lowest barre, but Blue Denmark also practice innovations, where companies spot an economic advantage from adopting and developing a new approach or technology. This is the

case with Maersk’s introduction of longer container ships such as Emma Maersk and the 3E series.

- A bold step like this takes a lot of internal brain power and financial muscle, and only global leaders can take part in that kind of innovation. Smaller and medium sized companies get left behind, if they do not succeed in partnerships, says Mogens Schrøder Bech, who sees a need for further innovation in order to meet future levels for nitrogen and sulphur emissions and ballast water, just as the maritime industry will have to prepare for the energy efficiency index. The need for innovation and product improvement is a basic condition.

Need for increased focus on research In consequence, the Danish Maritime Authority seeks to generate interest and financing for maritime research to create an enhanced pipeline for innovation and product development.

There is a need for increased focus of education and recruitment as well as research, development and innovation, if Denmark is to maintain its lead as a maritime nation.

- We are doing fine as regards innovation, but it has to be supported by a stronger research pipeline, Mogens Schrøder Bech concludes.

By Mette Vaabengaard

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Green growth in Blue Denmark

13

We should educate in a much larger scale. The de-mand is increasing.

Per Jørgensen

10

We need to educate

times as many

Chairman of the Danish Engineers’ Association, Per Jørgensen is satisfied with the overall framework conditions for Danish shipping. But one thing he misses: Increased investment in education: - It’s too weak just to train 200 a year, when the need perhaps is closer to 2.000, he says - There is a huge majority in the parliament, who supports the framework conditions for Danish shipping. Generally we are quite satisfied with the conditions, except that we fail to understand why focus is not stronger when it comes to industry, education and research, Per Jørgensen says.

- We are disappointed with the low admission to engineering education and hope - and expect - that this will be improved by the Finance Act 2012.

- If we do not have the trained manpower needed to develop the Danish maritime industry and shipping, we end up shooting ourselves in the foot. We have to keep up on all parameters. One thing is creating good framework conditions for employment of foreign seafarers on board Danish ships. We must also ensure that we have enough Danish nationals who are trained to the profession.

- Being a strong base Denmark can attract foreign labor, and that is fine, but we must also have a solid volume of Danish employees to ensure Danish interests.

Without being too nationally minded, we find it important to have citizens in the Danish society with interest in shipping and a high level education in this field, Per Jørgensen says.

Lots of jobs - Without a lot of foreign colleagues we could never have a Danish shipping industry of the present size. But this does not justify that we only intend to educate 200 officers a year.

- It is not sane considering that we have a business that employs 110.000 persons in the Blue Denmark. The number should rather be up to 2.000 to meet the demand in the offshore oil and gas industry, the offshore wind turbine industry, the special vessels for extension of ports and so on. We will need a lot of people and this in no time for narrow thinking Per Jørgensen says and underlines, that members of the Energeers’ Association are active in the recruitment work recommending young people to consider an education in shipping.

- We are quite happy with the jobs we have and believe that we can help create more jobs - in offshore, special vessels, factory ships, cruise liners. The demand worldwide is rapidly increasing, he says.

- As we see it the framework conditions have created great results, but we believe that the potential is even bigger.

By Finn Bruun

14

We need to educate 10 times as many

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Blue MBA 16

International top competence for shipping industry

International top competence for shipping industry

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Never has the demand for highly educated people in shipping world been more acute. And one of the centers that strives succesfully to meet the challenge is The Copenhagen Business School’s Executive MBA in Shipping and Logistics (The Blue MBA).

The program has recently received the International Forwarders’ Award in China for BEST EDUCATION for its contribution to the innovation and creativity in management and leadership of the shipping and logistics industry.

Program director Irene Rosberg, Blue MBA, CBS, underlines that shipping industry remains the center of economic development and that the new trends in the industry such as globalization, environment and changing technology put new demand on the role of shipping and the management of the shipping and shipping related businesses.

- These demands have increased the need for the industry to employ high caliber personnel, educated to respond effectively to these pressures. Set against these requirements, the obligation of acquiring a university education has shifted to the companies who are in desperate need to prepare the future personnel who will be leading this industry into the next phase, Irene Rosberg indicates.

- There is, therefore, a need for lifelong learning and continuous upgrading of skills of the managers and decision makers in this industry if they want to sustain their success and competitive position.

Shared skills The Copenhagen Business School’s Executive MBA in Shipping and Logistics (The Blue MBA) is taking a leading role in addressing the needs of the industry. The program aims at giving participants up-to-date insight into shipping economics and modern management theories and their application in the maritime sector.

The program adopts a holistic view of shipping, integrating commercial, technological and financial aspects as well as maritime law and supply-chain management, and leadership challenges.

Irene Rosberg emphasize that one of the success factors of the program is the diversity it presents in the student body: - This diversity which is evident not only in terms of nationality and gender, but also in terms of the segment of the industry and the work experience provides the program with an extremely dynamic group, a group which by itself is a pool of knowledge, where participants not only learn from lecturers and professors but also from each other.

By Finn Bruun

Daily news on www.danishmaritimemagazine.dk

– solutions on the move The company name is new but the experience and expertise remains.

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Royal Arctic Logistics is a merger between Royal Arctic Liner Agency and Arctic Container Operation

www.ralog.dk Tel. +299 34 92 90 Tel. +45 99 30 32 34

International top competence for shipping industry

17

Carsten Mortensen, NORDEN

NORDEN operates globally in dry cargo and tankers, and especially the market for dry bulk is under pressure. A global oversupply of tonnage and low demand increase competition and affect spot rates. Yet NORDEN has just presented an interim report for the first quarter of 2011 showing a bottom line increase of 10 % to a net profit of USD 69 million.

Long-term contracts ensure a stable economy - I am really satisfied with the result which has been achieved in spite of the flooding in Australian coal mines, terrible earthquakes and tsunami in Japan and political unrest in Northern Africa. Incidents that influence international trade and lower the demand for transportation, says CEO Carsten Mortensen in an interview with Danish Maritime Magazine He goes on to explain that NORDEN is protected against sudden market fluctuations, because most vessels are employed on longterm contracts at fixed rates. This ensures stable and predictable earnings.

More challenges ahead In the tanker market, performance proved slightly better than expected, but the market is still weak.

18

Against the flow

- I expect 2011 to be precisely as challenging a year for both dry cargo and tankers as previously predicted. But we are determined to see a weakening of the market as an opportunity – not a threat, says Carsten Mortensen.

The challenge comes from increasing dry bulk capacity. In 2011 delivery and inauguration of new dry cargo vessels is historically high at 15-16 %, while only a one digit percentage of the global fleet will be taken out of service. This imbalance increases competition.

On track to growth Nevertheless, NORDEN has launched an ambitious growth strategy for 2011-2013.

- In dry cargo, our focus is to increase cargo volumes with 15 % a year and improve our market shares and long term relations with global companies within mining, energy, food, construction and other commodity-intensive industries. In line with this goal, we recently signed a contract of affreigtment (COA) to transport more than 10 million tonnes of coal from Svalbard to the European continent. And we have other projects in the pipeline, Carsten Mortensen explains.

In Tankers, NORDEN will continue to improve earnings above mar-

Daily news on www.danishmaritimemagazine.dk

Against the flow With 140 years of history, NORDEN is not only one of the world’s oldest internationally operating shipping companies. It is also one of the strongest in financial terms. This enables the company to go against the flow and focus on expansion despite a weak market.

ket average and expand by investment in new vessels that should triple the core fleet over the next two years.

- We have a sound financial balance that enables us to make new investments now, when the market is weak and there are good bargains to be made. That way we will have strengthened our position, when the market fully recovers.

With an owned fleet of more than 25 tankers, NORDEN will obtain economies of scale and be better equipped to meet the strict quality and safety requirements of global oil companies.

Fleet adjustments NORDEN operates a total of more than 200 vessels, but the majority are chartered on a short-term basis. This allows the company to adjust the size and cost of the fleet to changing market conditions. The core fleet consists of owned vessels and long-term chartered vessels with purchase and extension options.

In dry bulk, NORDEN operates all vessel types. The company is one of the world’s largest suppliers of Handymax and Panamax capacity and has growing activities in the Handysize, Post-Panamax and Capesize vessel types.

- We will continue to expand our core fleet through new-buildings, long-time charters and acquisitions of still more modern and fu-

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el-efficient vessels. Our aim is to be among the global market leaders in Post-Panamax, Panamax, Supramax/Handymax and Handysize vessel types and active in the Capesize vessel type, says Carsten Mortensen.

Implementing core values and CSR policy The statement underlines that fleet expansions should be seen in the light of Corporate Social Responsibility (CSR). NORDEN is part of UN Global Compact and has an active CSR policy that obliges the company to integrate social, environmental, climate, health and safety in corporate activities. New fleet investment will therefore focus on fuel-efficiency as a means to reduce costs and pollution caused by air emissions.

- We are continuously striving to make existing vessels more fuelefficient, and fuel efficiency is in focus when we are contracting for new ships. Over the past six months we and our Japanese partners have ordered 7 new-build dry cargo ships that will have a combustion that is 15-20 percent below average for standard vessels. These improvements will benefit both the environment and the bottom line given the present rates on bunker fuel, Carsten Mortensen concludes.

By Mette Vaabengaard

Against the flow

19

The new generation of SCR technology for NOx reduction Innovative Danish company develops new SCR technology that eliminates up to 95 % of NOx emissions from ship engine combustion. And retrofitting can be achieved without space problems. It may sound too good to be true, but the system has already been tested by the Royal Danish Navy (RDN), who has ordered retrofitting of 6 vessels bringing the total order from the RDN up to 12 SCR systems.

DANSK TEKNOLOGI is a 29-year-old development company, which has developed products, projects, and technologies for international corporations such as Grundfos, Airbus, A.P. Møller-Maersk, Bang & Olusen and Novo Nordisk. Companies with extensive R&D departments and impressive track records in terms of product innovation.

- We do not start from scratch, but work in close cooperation with our clients’ in-house development teams. We see challenges from a new perspective, and we have an extremely professional team of innovative engineers as well as our own workshop, which transforms ideas into prototypes in a few days rather than weeks or months. That is our strength, says Business Manager Kristian

20

The new generation of SCR technology for NOx reduction

T. Lund, DANSK TEKNOLOGI, when asked to explain how a seemingly small player can assist some of the world leaders in diverse industrial sectors.

From precision dosing to NOx elimination With the BLUNOX SCR system, DANSK TEKNOLOGI has taken a step further and begun to manufacture, market and sell its own product.

- Some years ago, we developed a new pump technology for high-precision dosing in the chemical industry. The solution was a digital system that was so precise and reliable it could advantageously be used for Selective Catalytic Reduction – a chemical

Daily news on www.danishmaritimemagazine.dk

dependent on exhaust gas mixers. This drastically reduces the volume and enhances the reliability of the systems as there are less electronics and moving parts. It is perfect in relation to heavy truck and bus applications.

The small, innovative NOx removal systems will be installed on next generation trucks and busses from leading manufacturers, and it was evident that the shipping industry could benefit from the technology as well, so DANSK TEKNOLOGI designed a maritime system and had it tested on a full scale engine test bench before retrofitting it onto one of the Royal Danish Navy’s Dianaclass patrol vessels with 2 x MTU 2040 kW engine installations.

Designed for retrofitting - After a year of successful operation, the Diana-class vessel had achieved a NOx reduction of up to 95%, so the Royal Danish Navy ordered BLUNOX SCR systems for the remaining five Diana-class patrol vessels. We have also delivered SCR retrofit to a Norwegian bulk carrier M/V Norholm, so our system is now certified by the Norwegian NOx Fund, and vessels using this system are exempt from Norwegian NOx Tax, says Kristian Lund, who often meets the objection that SCR is too voluminous for retrofitting.

process that eliminates NOx by blending exhaust gasses with the harmless compound urea and passing it through a catalyst. The new digital dosing systems were therefore ideal for installation on busses and trucks, where the system could ensure NOx reduction compliance, says Kristian Lund.

All in one compact unit In order to make to make the SCR systems work on long-haul vehicles, DANSK TEKNOLOGI had to combine digital dosing system, control software and catalyst into one, very compact unit.

- We actually managed to construct a urea injection nozzle that works without compressed air as well as a system, which is not

Daily news on www.danishmaritimemagazine.dk

- By eliminating a number of unnecessary components, electronics and moving parts, we have obtained a compact/low weight system that fits perfectly into the space of the traditional silencer, which can be eliminated. With BLUNOX SCR systems there is no need for a separate silencer as silencing capability is an integrated part of the catalyst housing, so retrofitting is quite easily achieved.

Kristian Lund and DANSK TEKNOLOGI is already experiencing great interest from engine manufacturers and ship owners for their ground breaking, state-of-the-art technology. A system, which can help the shipping industry meet the strict, global requirements for NOx reduction in force from 2016, when NOx emissions must be reduced by more than 80% compared to today’s legislation.

By Mette Vaabengaard

The new generation of SCR technology for NOx reduction

21

ALL-ROUND REPAIRS

> IN TIME ANDON

BUDGET

A docked ship cannot make an income.

That is why Esbjerg Shipyard focuses on process optimization in new builds, repairs and maintenance work.

If you happen to pass by Esbjerg Shipyard, you will see lots of activity around the floating dock and berth side. The shipyard on the southwest coast of Jutland is becoming increasingly popular among owners of small ferries, chemical tankers, large fishing vessels, sand pumping and off shore supplier ships. And order books at the shipyard reflect the popularity.

Wider range of services In January Esbjerg Shipyard merged with Granly Marine in order to extend services and exploit synergies between the two subsidiaries in the Granly Group. The new business unit headed by CEO Peter Carlsen offers a wider range of services within ship construction, conversions and repairs.

- We have always had a close cooperation within the Granly Group, drawing on the experience of Granly Steel in relation to steelwork and Granly Diesel when it comes to engine repairs. The merger with Granly Marine enables us to optimize a number of processes in terms of time and costs. We now have the in-house expertise to perform all kinds of metal work. This improves the work flow to the benefit of our customers. We can offer a qualified, all round service at highly competitive prices, says Brian Mose, who is dock master and sales representative at Esbjerg Shipyard.

Esbjerg Shipyard undertakes any kind of new builds, repair, maintenance and classification works as well as rebuilding and overhauls.

On the tender shortlist The combination of high professionalism and all-round services seem to attract customers as more and more ship owners shortlist Esbjerg Shipyard when they call for tenders.

- In most cases, three or four shipyards are asked for quotations on a given job, which means we must be competitive in terms of time and price. A docked vessel cannot make money, so it is very important that we plan and perform all processes in accordance with a tight time schedule, says Brian Mose, who is rather proud of a track record showing that even extensive repairs can be completed in time and on budget.

Great all- round jobs One of the most challenging assignments at Esbjerg Shipyard in recent months has been the conversion of a chemical tanker to sail with mud to be used as drilling fluid in off-shore boreholes for oil and natural gas.

- A job like that suits our shipyard perfectly, because it involves so many different competencies. To make the conversion, we had to build a new steel house, new hydraulic systems and new pumping station and equip it with mixers, pumps and machinery. A lot of complicated work operations that we managed to complete within eight weeks, Brian Mose recalls.

Solutions like that have helped to build a good reputation for Esbjerg Shipyard, so that customers are not just local ship owners and operators, but come from all over Jutland and even Norway and Sweden. Words – like ships – get around.

By Mette Vaabengaard

22

All-round repairs in time and on budget

Daily news on www.danishmaritimemagazine.dk

It’s about saving Lives The Environment and Valuable Assets x x x

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Contact DASPOS for more information: DASPOS A/S Vesterlundvej 9 2730 Herlev Denmark

Tel. + 45 4432 7767 Fax + 45 4485 2475 sales@daspos.com www.daspos.com

Daily news on www.danishmaritimemagazine.dk

23

DANISH SHIPPING COMPANIES PARTICIPATE IN THE BLUE BELT PROJECT

The EU pilot project Blue Belt aims at promoting and facilitating Short Sea Shipping within the European Union. 95 Danish controlled ships participate in the project, the aim of which it is to reduce the administrative burden related to Short Sea Shipping.

Around 250 ships, termed blue ships, participate in the Blue Belt pilot project. The aim of the project is to promote Short Sea Shipping within the European Union by reducing the administrative burden for intra-Community trade.

The Blue Belt pilot project, which started as an initiative of the Belgian EU Presidency, automatically monitors the participating ships. The movements of blue ships are monitored via the SafeSeaNet system, operated by the European Maritime Safety Agency, and the information from SafeSeaNet is given

24

Danish shipping companies participate in the Blue Belt project

to the customs authorities in the form of a notification report before the arrival of a blue ship to an EU port.

The notification report contains information on the current and previous voyages, including expected or actual arrival and departure times, and previous and next ports of call.

Out of the 250 blue ships, 95 are Danish controlled.

-They are not all under Danish flag, they are, however, all controlled by Danish shipping companies, and they are all sailing in EU waters. We have chosen to participate in the project with

Daily news on www.danishmaritimemagazine.dk

ships, which sail in regular service intra-EU as well as with ships that are sailing Deep Sea and call at several European ports. The project is about the customs authorities getting access to information from SafeSeaNet. It should be easier for the shipping companies, when some of the administrative burdens are removed, explains Peter Olsen, office manager in the Danish Shipowners’ Association.

A single European market for shipping He explains that the idea is to create a single European market for shipping, just as it exists today within road transport.

-You can go by truck from Denmark all the way down through Europe without being stopped or controlled. This is not possible within shipping, it could, however, be somewhat easier, if the customs authorities get direct information about from where the ship comes. When the customs authorities can monitor the ship all the time and can see that it has sailed within the EU, they will know that they don’t have to spend

time controlling it, Peter Olsen says.

For the time being, the system does not contain information on which type of cargo that are onboard the ships. That is the next step in the process. The custom officials can, however, already now use the information on the voyage of the ships and the ports of call as input for risk assessment.

Single Window The Blue Belt pilot project will be finished in November this year. The participating parties expect positive results, and if successful, the outcome may be used to review existing procedures.

-We expect the work to be continued as part of the Single Window. Single Window means that the shipping companies only have to report information to one place instead of, as it happens today, to many different authorities. Blue Belt will in the long run be part of it. However, for the time being we have this pilot project, and we see some very interesting perspectives in the project, Peter Olsen says.

The usefulness of establishing a permanent Blue Belt reporting system will be assessed at the beginning of 2012.

By Tina Altenburg

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Danish shipping companies participate in the Blue Belt project

25

Clorius Controls takes off the pressure Must be able to optimize, innovate and every day adapt to new trends.

After successfully introduction of a new series of 3 way control valves few years ago, Clorius Controls is ready to take the next step into their marine strategy, which is focusing on becoming a complete supplier of control valves to the engine room on board of all kinds of vessels wherever in the world a ship is being built.

A direct acting pressure reducing valve, type G1PR, with external capillary for steam, air & liquid purposes in any possible circuit and pipe system onboard the ship.

The needs for the G1PR valve are on board ships for example: - Secure devices, which cannot stand a too high pressure - Keep correct temperature in steam applications, by controlling the pressure - Securing the pressure reduction from start air (30 bar) to working air (7 bar) After researching the market directly at the shipyards and analyzing feedback given from customers, Clorius Controls were ready to start the development of a pressure reducing valve.

The outcome is the G1PR, with a valve Body design based on more than 40 years of experience from their 2 way technology with balanced seat and body. Secondly they wanted to develop a reliable, but simple actuator with as few components as possible. The reduced number of components resulted in a valve with reduced weight, little complexity, an inconsiderable off-set and of course being cost effective.

The valve is offered with the body in nodular cast iron or cast steel, internal parts in stainless steel, springs and the actuator are made of steel. A rubber diaphragm is used in the actuator to convert the downstream pressure. A compensation chamber made of steel must be included by steam applications.

Function of the G1PR is as following: The medium flows between the seat and cone through the valve.

The direction is physically indicated by an arrow on the body. The position of the valve cone determines the flow rate and consequently the pressure ratio across the valve. The downstream pressure is transmitted through the capillary to the diaphragm, where the pressure is converted into a positioning force. This force is adjusting the cone with dependence on the force of the operating springs. The spring force can easily be adjusted by using the built-in set point adjuster. The valve is functioning as a proportional regulator with a set point. It therefore has an off-set on the downstream pressure, whenever it has to adjust to changes in

26

Clorius Controls takes off the pressure

the system. For some other manufacturers with std. housing and plug design, it might cause an off-set of up to 0,5 bar, but the G1PR which has a balanced seat and therefore no force of any significance, and the valve balance only have to rely on spring and actuator force, the off-set will be app. 0,01 bar and therefore of no factor.

The G1PR is produced within following range: Size: DN15-80, flanged Pressure class: PN25 & 40 Temperature range: -10 – 250°C 5 different setting ranges can be pre-selected for the secondary pressure range.

The G1PR has following assets: - Direct acting with capillary tube allows large volumes, compared to compact constructed pressure reducing valves - Tolerant to wet and dry steam - Tolerant to media with low quantity of small particles - Easy to install and adjust - Easy to do maintenance or repair on - Self-acting and no external power is needed Clorius Controls is in 2011 presenting the G1PR together with their well-known valve programme, either by sole representation or through agents at NEVA in Skt. Petersborg and Marin tech in Shanghai.

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(BLIV SHIPPINGG TRRAINNEE, HVOR DERR ERR LIDT HØØJERRE TIL LOFTTET))

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