Quarterly October 2004 - Odfjell

Dear Colleagues...During the week September 13th to17th two important seminars were heldin Bergen; the Management Conferenceand the Ship Officers Conference. Themain focus at both these meetings was onsafety. Odfjell has been through a toughyear with serious events and accidents, and24 persons have lost their lives in Odfjell’sservice. I feel a special responsibility toaddress this issue, and my message to allof you is that safety is something we shallnever compromise on. Remember thatsafety is not only important on board ourships, but also at our terminals, duringcontainer operations and in all parts of ourwork. As I previously have stated in thiscolumn: Safety comes first!Hence, supported by the Board and theSenior Management Group we havedecided to address the whole Odfjellorganization through a Safety Initiative. Iknow that safety is not something that wecreate solely through a campaign. It hasto be embedded in the company culture,and we have to have it under our skin,in our bones so to say. Many accidentshappen because people who should knowhow to do things right, for some reasondid it wrong, or made some shortcuts.Bearing in mind we are operating in arisk-exposed industry, handling hazardousand explosive cargoes. We have manyskilled and experienced people worldwidewith sound attitudes, but we need to bealert and to improve our safety standards,and never get “relaxed” on safety issues.Of course there will always be thecommercial pressure, but let there be nomisunderstanding: High safety-standardsare cost-effective to our business.Our safety policy shall be founded on the“zero accident” philosophy”. Odfjell shallnot accept any accident to happen, and weshall be recognized as a leading companyalso within the area of safety. This isindeed ambitious, but I am confident thatthere simply are no alternatives if we wishto continue in this business. And be certainthat we shall! I ask you all to contribute inreaching this goal.Looking at the 1st half 2004 results, Iam happy to recognize that most of ourbusiness units are doing well. The revenuesfrom our vessels are increasing, and themarket for chemical tankers is developingfavourably. The terminals and containersgive good and stable income. There arealso other positive factors. Recently wetook delivery of Bow Spring, the third shipin our new Polish series. These ships areperforming very well, and we have decidedto increase the series from six to now eightships. Odfjell has also been awarded alicense for doing coastal tanker operationsin China, together with a Chinese partner.Further, we have entered into a jointventure with another Chinese partner forbuilding a new tank storage terminal inJiangyin on the Yangtze River.However, although our results arebetter they aren’t that good, and thereis definitely room for improvements.Although the markets are turning in ourfavour, freight rates still do not reflect ourreal service costs and offer a reasonablereturn on our long-term investments. Itis essential that we all take ownership toour business, and that we work togetherto strengthen Odfjell’s position.Finally I wish all of you in the Northernhemisphere a pleasant fall and those ofyou below the Equator an even nicerspring. Let me also express my recognitionand gratitude for your continuous effortsfor Odfjell.Terje Storeng, President/CEOodfjell quarterly 3