In-shape company faces the future with added muscle, says Boyd
AS SAFMARINE embraces a new era in the hands of new shareholder AP Moller, Antwerp-based c.e.o Howard Boyd has swept aside industry concerns about its future role with the reassurance that Safmarine is in better shape than it has been for some years both as a brand and as SCL (Safmarine Container Lines).
"It is now in a position to access a global customer base while continuing to provide local shippers with the rates and service on which its reputation has been built," Boyd told FTW in a telephonic interview from his Antwerp headquarters last week.
"The recent Maersk buy-out must be seen against the background of industry trends over the past two to three years," Boyd said.
"Survival of 500 000 teu players is extremely rare.
"We had to move from a regional focus to become global players."
The merger in 1996 with CMBT was the first step.
But the company was aiming for 1 million teus before it could feel competitive.
In the light of that reality, all that has changed is the shareholding, said Boyd.
"The company hasn't disappeared and for us, as management, we are very positive.
"If you look at the calibre of our shareholders, AP Moller is one of the largest companies and dedicated to the business.
"Moreover, they have taken a fundamental decision that they are not only buying trades and ships but the brands and the people, which is a very different proposition from many other takeovers which have tended to blur the identities of the merging companies."
In terms of Safmarine and CMBT one of the strengths which AP Moller is acquiring is an ability to operate in Africa which is clearly not the easiest environment.
And while it might not be common practice in the shipping industry, this twin-branding model is a universal practice in many other businesses, according to Boyd.
AP Moller has also made it quite clear that its South African base will be expanded.
"SA flag ships will remain in South Africa, and the marine function will continue to be headquartered here.
"Employment and training - which are value-added components for SA - will not be lost."
Landside focus
A further positive development flowing from the takeover relates to Safmarine's involvement in landside operations.
"Because of our group relationships, Safmarine has in the past chiefly been a sea leg operator.
"We are now keen to get more involved in landside operations, which has already started with the acquisition of Saftainer and Roadwing.
"But that's only the beginning. When privatisation takes hold, we have the local and international expertise to participate, whether through the operation of terminals or inland logistics, all of which will add value for the customer."
Restructuring of Safmarine
The general change in direction of the company has been accompanied by a new company structure - and this decision was taken at the end of last year, independently of the sale to AP Moller.
The new structure is based on trade routes under Brett Gray and land-based operations under Graham Peirce, which also happens to be the basis of Maersk Line's structure.
There was a hiatus in the implementation of this new structure while the sale of the company was in progress, but practical steps have now been taken.
As a result there have been job losses around the world, "but these have been relatively small, some 8% across the board," says Boyd.
Boyd will remain as c.e.o of SCL, based in Antwerp, but with the increased profile of the SA operation, he will also take on the role of c.e.o. of Safmarine in South Africa, which will mean a lot more shuttling to and fro between the two countries.
Change was inevitable
Shipping shares have not, of late, been a favoured choice.
"From an Old Mutual point of view they had to re-evaluate their strategic holding, and for a company that is aiming to be a financial services company, a shipping company did not fit its profile.
"For Safmarine to stay alive, they needed global reach and the Maersk takeover clearly answered this need."
With the sale now blessed with European Union approval, it's full steam ahead!
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