Parcel Tankers

The Odfjell fleet currently consists of 93 ships, of which 81 are operated by Odfjell Tankers, our fully owned chartering and operating company. Odfjell Tankers, headquartered in Bergen, Norway, is represented with overseas offices in 16 different countries all over the world, each with the purpose of marketing and providing customer service. Most offices serve dual purposes, dealing with both commercial and operational issues. Many of the overseas offices are co-located and have close cooperation with our terminals. Odfjell’s Singapore office has also the commercial and operational control of 12 ships employed in intra-Asia trades, in addition to being responsible for ship management of most of our coated ships.

The Odfjell Tankers fleet consists of a variety of ship types, in terms of size, degree of sophistication, number of tanks, tank configuration and coating, and a number of other criteria of importance for our operations and ability to serve different customer requirements. Fleet development and optimal vessel utilisation, therefore, are critical success factors in the day-to-day management and employment of Odfjell Tankers.

Flexibility and inter-changeability of ships between geographical areas and trade-lanes is an integral part of Odfjell’s business model, facilitated by our large and sophisticated fleet. Odfjell ships trade in most relevant waters, calling major ports in Europe, the US, Asia Pacific, Africa, Middle East and South America. The 16 state-of-the-art 37,500 dwt mostly stainless steel parcel tankers, and the eight fully stainless steel 40,000 dwt parcel tankers that were delivered from Poland between 2003 and 2007, are among the most advanced and flexible ships in the market, which contribute to our emphasis on safety, efficiency and customer service. Since 2002 we have further strengthened our carrying capacity through long-term time-charters of Japanese built and owned stainless steel tonnage; 12 19,900-tonners and six 33,000-tonners, of which only one remains to be delivered.

In addition to the one remaining Japanese 33,000 dwt time-charter ship, which will be delivered in 2009, Odfjell’s order book currently consists of seven units. Six (plus optional four) 9,000 dwt stainless steel chemical tankers were ordered early 2008 at the Chuan Dong Shipyard in China, for delivery in 2010-2012. These ships will be operated in our regional trades in Asia and Europe, and as such, will replace smaller vessels currently traded in these areas. An 8,200 dwt IMO II chemical tanker with coated tanks is also in order and under construction, and will be delivered to our 49% owned joint venture company Odfjell Dong Zhan Shipping (Shanghai) Co. Ltd. This vessel will be operated in the Chinese domestic market. As newbuilding prices seem to be falling to somewhat more reasonable levels, due to little new ordering and declining steel prices, we are closely monitoring further opportunities for fleet renewal.

Odfjell has been a supporter of high safety and efficiency standards of chemical tankers since the inception of the industry and thus, we take a proactive approach towards international regulatory bodies and major customers in order to enhance safety. In this context Odfjell continues to address key issues to the industry, such as the practice of tank inerting and importance of implementing a more cost-efficient and transparent regime of customers’ ship inspections and vetting.

During the last year Odfjell Tankers has strengthened the competitive position particularly in the South American markets. This is not least due to having committed sufficient quality tonnage to and from the US and to and from Europe, the regional services provided by Flumar and Odfjell y Vapores, and the connections with the associated Odfjell family terminals in Brazil, Argentina, Peru and Chile. South America is an important market, with a rapidly developing petrochemical industry, the expanding ethanol exports and the large vegetable oil exports.

Repeated piracy attacks in the Gulf of Aden during the summer and autumn made Odfjell choose to sail around Africa when going between Europe and Asia instead of going through Suez, despite the additional time and bunker costs involved. Although several of our competitors followed suit, this had nevertheless only a marginal impact on the market balance. Increased naval escort presence has improved the safety level to such an extent that we now have decided to resume sailings trough Suez and Gulf of Aden. However, we are following the situation closely, and Odfjell is very concerned about the safety of crew, ship and cargo also when trading in other piracy-infested waters, such as parts of West Africa and the Malacca Strait.

Port congestion and excessive waiting time for our ships has been a growing problem for the chemical tanker industry, and port time continues to take up a disproportionate part of many voyages. In part owners are able to compensate this cost disadvantage through collection of demurrage. Nevertheless, to achieve more efficient port operations, and thereby also saving the environment through limiting unnecessary ship emissions, berthing and cargo handling capacities should be further developed.

The 12 ships operated out of our Singapore office are traded within and between North East Asia and South East Asia. Despite the current slowdown following the financial crisis, petrochemicals trade to and from China continue to be of major importance. Our Singapore office is also running parcel services between the Asia Pacific region and Australia/New Zealand as well as to and from AG/India/Africa.

In addition to wanting a major position in the important inter Asian trades, Odfjell Tankers also aims at offering our global customers transhipments to ports with limited draft or dock facilities. Consolidation of loading and discharging operations for the deep-sea fleet is also a crucial element. By reducing port calls and thereby reducing the risk of delays, Odfjell Tankers is able to offer a more reliable and economical service to our customers.

Odfjell Ahrenkiel

The 50/50 joint venture with our German partner Ahrenkiel for marketing and operation of chemical tankers in inter-European trade has been in service since 2004. Odfjell Ahrenkiel, based in Hamburg, Germany, also offers sailings between Europe, including the Mediterranean, and West Africa. The company currently operates six advanced Multitank ships of 5,870 dwt and one fully stainless steel 10,160 dwt tanker, and is firmly established as a reliable carrier in the European market. Odfjell Ahrenkiel carried about 0.6 million tonnes of cargo in 2008.

Flumar

In February 2008 Odfjell acquired the remaining 50% of the Brazilian shipping company Flumar, which then became a 100% owned subsidiary. Operating out of São Paulo, Brazil, the Company’s core business is transportation of bulk liquid chemicals and gases primarily on the Brazilian coast and within the Mercosul area. Presently the Company operates three chemical tankers and one LPG ship, ranging in size from 4,400 dwt to 13,800 dwt. These ships are now being transferred from external management to being managed by Odfjell. Combined, Odfjell and Flumar are able to provide our customers with enhanced service capabilities. Further-more, the extensive network of associated terminals in Brazil and Argentina adds important flexibility towards our customers’ logistics requirements. Flumar carried about 1 million tons of cargo in 2008.

Odfjell y Vapores

The 50/50 joint venture company Odfjell y Vapores operates one parcel tanker of 18,652 dwt, primarily carrying sulphuric acid along the Chilean coast. In 2008 the Company carried some 0,5 million tons.