Danish-headquartered Clipper Bulk A/S, a global operator of Handysize and Supramax vessels, said Monday it would undertake an organization-wide review of its operations in the face of a steep market downturn.
A series of initiatives being put in place are aimed at strengthening the company’s business platform amid continued weak markets. Initiatives include agreements to strengthen the company’s financial position, downsizing of organization and office network, other cost savings, changes to Senior Management as well as a more focused market approach. The Hong Kong office is likely to lose a number of staff but the branch will form part of a more concentrated network following the restructuring of Clipper’s worldwide operations.
“We have been challenged by the steep, unexpected market downturn. Today, we are taking the steps required to run a viable, profitable dry bulk operation, even in depressed markets. We are establishing a platform, which will allow us to fully benefit from Clipper’s positions of strengths in various trades and geographies,” said Clipper chief executive Peter Norborg.
As part of the reorganization, additional working capital will be put at Clipper Bulk’s disposal, allowing Clipper to approach markets more proactively.
To further simplify its operational and administrative set-up, Clipper Bulk will cut around 40 out of 140 jobs ashore, 12 in Houston, Hong Kong, Tokyo and Nassau and the remaining at the head office in Copenhagen.
The Tokyo office will be closed down entirely, while the duties of the Nassau office will be transferred to the Owners’ local representation, allowing Clipper Bulk to fully concentrate its business in 3 hubs – Copenhagen, Houston and Hong Kong – supported by a local office in Barranquilla, Colombia.
”While we deeply regret the implications for competent and loyal staff, the downsizing is essential to adapt both costs and structures to prevailing market conditions. We will do our best to support the ones affected,” said Mr Norborg.
More initiatives have been launched to tightly manage costs and prioritize resources, Clipper Group said. This includes changes among the company’s top management.
The new senior management team, comprises of Peter Norborg (CEO), Amrit Peter Kalsi (COO, Head of Chartering & Operations), Thomas Martinussen (Head of Legal), Britt Jørgensen (Head of HR & Comms) and Anders Bruun (Head of Business Development). A Head of Finance & Accounting will be named later.
The new Senior Management Team will put great emphasis on making Clipper a more focused and specialized dry bulk operator, by leveraging Clipper’s positions of strength in various trades and routes as well as its long-term partnerships with clients, technical and commercial managers and other stakeholders. Hence, Clipper will continue to develop its niche businesses, such as Clipper Steel (service to and from the Mexican Gulf with the part-owned IPA Steel Terminal and its rail, road and sea links as focal point), Compass Rose (joint-venture with a Colombian manufacturer of fertilizer), China Parcel (cargoes from more consignors into China, combined with back-hauls into the Atlantic), Brazil Steel (associate with Clipper Steel), etc.
“There are routes, trades and geographies where we definitely want to grow our business and our fleet. In terms of the general market, we will take a more opportunistic approach and only pursue those cargoes and customers that offer reasonable profitability,” said Mr Norborg.
Clipper Bulk currently operates around 80 vessels, including tonnage operated by two Clipper Bulk-managed pools: The Clipper Handy Pool (28-38,000 dwt vessels incl. fully fitted loggers as well as grabs fitted vessels) and The Clipper Ultra Pool (64,000 dwt, grabs fitted vessels). The pools offer participants critical mass and cooperation on commercial and technical issues.
In March 2017, Clipper Group underwent an earlier restructuring exercise, at the centre of which was the naming of Hong Kong as the company’s Asian headquarters. At that time the company operated 150 vessels.