and service lines.
| M A R I T I M E L O G I S T I C S |
Klaveness Maritime Logistics creates transport concepts that contribute to lower costs in the logistics chain. Our expertise is in deep-sea and regional distribution of bulk commodities. We aim to always have the most effective combinations of commercial solutions with cost-effective technology on board and on shore. Our services include:
- Specialized bulk vessels for the Aluminium, Steel and Cement industry
- Specialized overseas and regional distribution of bulk products
- Freight chartering, operations and scheduling
- Logistics chain analysis, design and management
- Ship Management for specialized tonnage
Klaveness Maritime Logistics has close to 60 years experience in working with industries that require efficient and dependable logistics solutions for bulk commodities. This experience includes:
- Design and implementation of transport and logistics solutions for:
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- Cement in Scandinavia
- Cement from Norway to the U.S., to West Africa and to Saudi Arabia
- Bauxite from West Africa to North America and Europe
- Bauxite from Guyana
- Coal from Indonesia to shallow ports on the US East Coast
- Caustic soda for the aluminium industry in Australia
- Iron ore imports to the Middle-East Gulf
- Aggregates and iron ore pellets in the Middle-East Gulf
- Project design and operation of cargo handling equipment
- Project design and operation of specialised ships
- Floating storage projects
- Shuttle barges
- Ship-to-ship transfer operations (transloading)
- Salvage operations performed by our transloader vessels
| C A B U (Caustic / bulk transport) |
| Our fleet of 9 caustic-capable bulk carriers service the major part of the caustic transportation requirements for the aluminium industry in Australia. In addition, we deliver alumina to the Middle East and China, molasses to the Continent and U.S., along with coal and iron ore to Japan. We aim to deliver uncompromising reliability, maximum flexibility at the lowest possible cost to our customers. Our transport pattern and fleet structure enable us to offer predictability and redundancy - beeing important requirements in industries that are particularly vulnerable to interruptions in the supply chain The Panamax-sized Cabu fleet has proven to be the most efficient way to transport caustic soda. Almost all our customers have adapted their infrastructure to accommodate the larger lot-sizes and benefit from the increased efficiency. The fleet is employed through a pool structure. We have extended the contract portfolio throughout 2004 and now have a long-term coverage of the fleet. There will be one additional Cabu delivered late summer 2005, and one more in 2007. That will bring our Cabu fleet to five in 2005 and six in 2007. We expect our fleet to be heavily utilized in 2005 and have a strong focus on technical planning and reliability. |
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| B E L T U N L O A D E R S |
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The Beltunloader is the answer to the increased demand for efficiency and predictable cargo delivery, as well as transportation to inaccessible or underdeveloped areas, inefficient ports or ports with high labour costs. The Beltunloader can give our customers efficient discharging options without any investments in shore cranes. The Klaveness Beltunloader fleet counts three handymax "grab-belt" vessels and one top-reclaiming selfunloader. All vessels are equipped with a boom conveyor that can reach 60-75 meters onshore and the entire cargo handling is performed by the vessels’ crew/equipment. The "grab-belt" vessels are equipped with a dust suppression system while the top-reclaimer offers totally enclosed cargo handling securing dust-free discharge. All vessels are mainly operated on the US East Coast where they carry coal, salt, aggregates and gypsum rock. |
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| TRANSLOADING (Floating ports) |
| Klaveness Maritime Logistics and its subsidiary "Bulktransfer Inc." has substantial experience with transloading of commodities like iron ore and coal. The transloading services can enable customers to enjoy the |economies of scale by importing/exporting from shallow ports by using vessels having deep draft. Transloaders can also successfully service terminals with little cargo handling equipment ashore |
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A floating port vessel having first lightered 60,000 mt from the capesize vessel offshore and thereafter acts as a port facility discharging the Capsize vessel inside the harbou |
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The Transloader vessel MV Bandar discharging the capesize MV Cape Africa in a salvage operation off Cape Town |
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| C E M E N T |
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In order to implement total low-cost solutions, Klaveness Maritime Logistics need to understand not only the transport requirements of our customers but also the requirements and limitations behind it. Logistics chain analysis and design are the primary task of this support service, and our objective is to create solutions that increase efficiency and lowers cost. |
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As per end of 2004 KCL operate 13 cement vessels (12 fully owned and one on long time T/C), and have minority interests in 3 other vessels operated by partners. In addition KCL have minority interests in two conversion projects to be completed during the first half of 2005.
In January 2004 KCL signed an 8-year contract with Aalborg Cement related to the delivery of maritime logistic services, employing three vessels full time during the contractual period. In February 2004 we signed a 10-year contract with Finncementi Oy, employing one vessel fully for the contractual period.
During 2004 KCL have focused on consolidating the business related to the newly acquired vessels and contracts. This focus will continue in 2005. The technical diversification and age profile of the cement fleet have given us a challenge in terms of predictability and standardization. New planning and maintenance procedures is required in order to give Klaveness Cement Logistics a competitive edge in this market.
| S H I P M A N A G E M E N T |
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Ship Management, in addition to commercial operation and chartering, is an integral part of the Group activities. The Group has over to 60 years of experience in technical management of vessels. The Company has throughout the years spearheaded several innovative projects and has been instrumental in the development of a new generation of combination carriers serving the aluminium industry. In 2007 we made organizational changes to better align the technical and commercial work related to our specialized vessels. The Ship Management activity is working closely with the commercial part of Klaveness Maritime Logistics AS. Klaveness Maritime Logistics AS acts as technical managers for specialized vessels owned by the Group or owned in joint-ventures and this expertise is assembled within the Ship Management division. |
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The Technical Department is responsible for our technical specialties such as: Cargo handling systems, assessment of bulkcarrier risk factors, in particular cargo handling capabilities and limitations, structural protection maintenance and repairs
Crew Management is responsible for developing and maintaining the manning section. It has developed a unique know-how in recruitment, training and education of maritime personnel with multiple cultural backgrounds. International joint-ventures in the Far East, South America, Europe and Africa have been conditional on recruitment and training of seafarers from these regions.
Health, Safety Environment and Quality is managing the Company’s Quality Management System (QMS). It is ISM-Code accredited and in compliance with the ISO 9002 standard.
Purchasing is cooperating closely with partners in order to become less volume-sensitive and to secure stability and efficiency over time. Our worldwide trade related procurement network was further developed in 2006, and represents a total volume of between 80 and 150 vessels.
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Introducing new opportunities in the dry bulk market
With more than sixty years of experience, Klaveness is the leading provider of commercial management services to owners of handymax and panamax bulkcarriers.
Our panamax operation is known in the market as Baumarine and our handymax/handysize operation is known as Bulkhandling.
Commercial Management operates about 100 bulkcarriers, on behalf of 20 ship owners from 10 nations.
Our vision is to make ship owning easier, safer and more profitable. We assist you by simplifying the daily chartering and operations, while you can choose your risk and revenue profile. We offer competitive rates, full transparency and reduced cost of operation.
With Klaveness Commercial Management you get the benefits of a large-scale operation and access to attractive market opportunities.
Competitive earnings
With our highly skilled people, large fleet and market insight we deliver competitive results to owners of bulkcarriers. Revenues are consistently benchmarked against official market indices. With Klaveness Commercial Management you never lose sight of your performance.
Individual risk profile
Do you want to operate in the spot market, or secure your earnings with a timecharter? It’s up to you. Klaveness Commercial Management offers a variety of risk and revenue profiles. You can change from one profile to another at any time. Klaveness Commercial Management is at your service to give advice.
You can choose from a comprehensive menu of services:
| • | Spot revenue Your vessel is traded in a large pool of similar vessels, optimising earnings and reducing risk in the short-term freight market. Your revenue is a share of the pool’s total income and will be benchmarked against spot market indices. |
| • | Fixed revenue Your income is fixed as under a timecharter, giving you protection from a declining spot market. The unique advantage we offer is that agreements may cover parts of a period, and have exact durations from individual quarters up to several years. Forward delivery is also an option. |
| • | Spot revenue with Floor Guarantees minimum earnings and full market upside. You continue to receive spot revenue less an agreed “insurance premium”, unless the result falls below an agreed floor. |
| • | Spot revenue with Collar Gives protection against sharp market drops. You receive spot revenue unless the result of a given month falls below an agreed floor or rises above an agreed ceiling. |
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Ship owning simplified Market insight Trustworthy partner |
| I N V E S T M E N T S |
Klaveness Investments is responsible for all investments within the Torvald Klaveness Group, with the exception of investments made by Klaveness Maritime Logistics. The total allocation of Investments’ portfolio (including committed capital) is estimated to approximately NOK 3,1 billion by April 2007.
The portfolio consists of investments with different risk profiles. It is highly diversified and entails investments in shipping, real estate and various equity instruments. The shipping investments consist of market exposed investments in different shipping segments such as e.g. small tank/chemical carriers and supply vessels. In addition we have a number of shipping investments in bareboat deals, where the risk exposure can be defined as residual value risks and credit risks. The portfolio allocation is illustrated below, measured by Net Asset Value:
Klaveness Investments was established as a strategic business unit within The Torvald Klaveness Group in September 2003. We have continued the active targeting of new investment areas both through established channels and new channels in addition to direct approaches towards potential clients.
The business unit is divided into the following areas, reflecting the investment activities undertaken:
| • | Standard Dry Bulk investments Klaveness Investments is responsible for the Group’s ownership in standard bulk tonnage (i.e. Capesize, Panamax, Handymax and Handysize vessels). As of April 2007, there is no ownership of such standard tonnage. When the prices for modern secondhand tonnage and/or newbuildings reach interesting levels, we will pursue new investments in such vessels. |
| • | Investments in other segments than Dry Bulk with market exposure. During the course of 2007 we have reshuffled the portfolio of our investments in small tankers, chemical carriers and supply vessels. The philosophy behind these investments is to find interesting opportunities with a value potential as well as a decent running return. Since September 2003 we have built up knowledge of the other shipping sectors through our participations in various investments. We have identified and invested in segments with potential and built an interesting portfolio. Our investments are a mix of direct market exposure through spot operation and residual value risk after initial charter periods. Investments in segments outside dry-bulk are done together with partners having experience in the respective segment. |
| • | Bareboat investments. So far in 2007 we have increased the size of our bareboat portfolio, despite several of the previous deals having been sold. The deals are interesting from a financial return point of view and give us valuable insight into other segments. Bareboat investments have enabled us to strengthen our business network. New partnerships and relationships have been built. As of April 2007 our bareboat investment portfolio consists of shares in totally 78 vessels within different segments. The capital allocation of the bareboat investments is illustrated below: |
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The vessels are employed under bareboat charter parties over different periods, mostly varying between 5 and 10 years (approximately 8 years on average). In most cases the bareboat charterers are the same as the original sellers. Klaveness’ share in the projects is normally between 15 to 40% (23% on average). For some projects Klaveness is the lead investor. The typical characteristics of these deals are a good running yield and limited market exposure. The risk elements are counterpart risk, interest rate risk and to some extent the residual value risk. |
| R E A L E S T A T E |
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The group’s real estate investments are made through T. Klaveness Eiendom AS, a wholly owned subsidiary. As of April 2007 the real estate portfolio consisted of 4 properties which are under 100% control and several partly owned properties, totalling the Klaveness share of the area exposure to 110.000 sqm.
The positive trend of the Norwegian real estate market over the last few years has prevailed also in 2007. As vacancy rates were falling leases moved upwards, boosting the volume of transactions even further from last year’s record volume.
The objective of our real estate investments is to diversify risk combining running yield from assets with projects/assets were values are to be refined/developed. The term of our investments is medium to long term.
We have a substantial portfolio of equities. A major share of the portfolio is highly liquid, as these funds are kept available for other investments within the Klaveness Group.
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Centra Klaveness Invest AS manages approximately half of our equity investments. The company is holding and trading a substantial portfolio of Nordic stock listed equities. |
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In addition we have substantial equity exposure through American and European index investments and a global portfolio as well as a portfolio of Norwegian stock-listed equities. |
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We have also a portfolio of investments in private equity funds. The largest commit-ment in this respect is done in Energy Ventures IS and Energy Venture Fund II. We have recently committed funds to Cubera Secondary KS and to Norgesinvestor IV AS and Energy Ventures III. |