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Torm was founded in 1889 and has constantly adapted itself and benefited from the significant changes that characterise the world of shipping. The company is composed of tanker and bulk carrier divisions, with product tanker activity accounting for the majority of the business. Headquartered in Copenhagen, Denmark, Torm is responsible for the commercial operation of approximately 90 vessels, including some of the most modern and well-equipped ships afloat.
The company’s present day operations are handled by two divisions – Tankers and Bulk. On the tankers side, the company is the world’s premier tanker carrier of clean oil products such as gasoline, jet fuel, naphtha and diesel oil and a leading carrier of other clean products.
With tanker vessels varying in size from 45,000-100,000 dwt, Torm controls a fleet in excess of 70 product tankers. Absolute reliability, high quality and safety are the cornerstones of this business.
Torm’s highly skilled crews and advanced maritime technology clearly play a key role in the building of the company’s foundation – as does its expertise in vessel management. Torm’s Copenhagen office manages tanker operations, covering all time zones 24 hours a day, seven days a week. And a dedicated global communications network with carefully selected agents in all markets does everything possible to ensure timely delivery of customers’ products.
Torm has a long-standing commitment to quality assurance programs and ongoing fleet renewal. Its modern, technologically advanced tonnage complies with the requirements of IMO and OCIMF as regards ship design, equipment and operations.
On the bulk carriers side, flexibility is the hallmark of Torm’s operations in this changeable market. Panamax and Handysize vessels make up Torm’s fleet of bulk carriers, with the Panamax vessels principally serving the steel industry and utilities by carrying iron and coal; commodities such as grain, bauxite and fertilizers are also frequent cargoes. Torm’s log-fitted Handysize vessels are used in large part by the logging industry, although other bulk commodities such as grain, fertilizer and steel often are carried as well.
Since the market for bulk carriers fluctuates considerably, Torm’s fleet comprises both owned and chartered vessels. That ensures not only flexibility in the operations, but also competitive pricing for customers. However, one thing that doesn’t fluctuate is Torm’s record for safe, reliable performance – a track record established over the 100+ years it has transported bulk commodities.
It is Torm’s vision is to become the dominant and most profitable player in its core businesses, and it intends to action this through a commitment to quality – in people, ships and business approach. This development strategy is focused on two strands. The key element of Torm’s strategy is to achieve a leading position in the segments in which the company operates in order to sustain continuous growth and profitability throughout the market cycle. In this way, Torm believes it will be able to create better shareholder value in the long term and meet the expectations of customers, employees, suppliers and partners through a competitive advantage in the company’s business areas.
Most of the modern and secure vessels provided by the company are operated in a ‘pool’ - co-operating with other respected shipping companies that share Torm’s commitment to safety, environmental responsibility and customer service.
In order to gain a competitive advantage more quickly than would be achievable through organic growth, for more than ten years Torm has pursued growth via this pooling system. It enables the company to offer greater tonnage capacity, and thereby the flexibility many of Torm’s customers have come to expect.
Pooling enhances service and adds economies of scale. The concept is simple: pool together ship-owners to provide one-stop shopping for customers. Even though most people said it couldn’t be done, Torm introduced the concept in 1990 and today pooling is considered common industry practice.
By pooling together scores of modern vessels, a Torm pool is almost certain to have the right ship in the right place at the right time. That means customers receive better, more flexible service and assured capacity. And ship-owners benefit from the economies of scale built into such an arrangement. Torm operates the largest product tanker pools in the world and was a founding member of the IHC Handysize pool.
TORM operates three product tanker pools, in the MR, LR1, and LR2 segments, with partners among the most prestigious ship-owners in the world. Klaus Kjaerulff, CEO of Torm, describes pooling as: “The heart of Torms’s strategy and the key to our future growth.”
Torm has an all-encompassing policy on safety and the environment and a detailed safety management system designed to put it into effect. But the ultimate goal of the entire program can be summed up in four words: ‘no accidents, no pollution.’ Safety isn’t a trend at Torm. Respect for the sea is ingrained in all staff, and the philosophy is in practice every day, which is one of the reasons that Torm has one of the best safety records in the trade. All Torm vessels are built with double hulls, reflecting Torm’s safety consciousness and concern for the environment. In fact, the company ordered its first double hull back in 1988, long before this became a requirement in the industry.
Recent financial announcements for Torm held good news for customers, investors, employees, pool partners and the maritime community. Expectations for 2005 profit increased from $165 million to approximately $200 million before tax, receipt of dividends and profit from sale of vessels. Rates for Torm’s product tankers increased more than expected in the third quarter and following hurricane Katrina, the company experienced substantially increased transportation demands. As Torm predominantly focuses on the spot market, it has been ideally positioned to benefit from the increase and has chartered out a number of vessels for voyages at the increased rates. Timing explains a lot, but the company’s prudent style of financial management has also been vital to its success. For example, Torm aims for a minimum equity ratio of 30 per cent – vital in a field like shipping where decisions have to be made quickly and independently. This conservative financial approach provides protection in a cyclical market.
Torm has deep roots in the maritime industry. Founded by Captain Ditlev Torm as a steamship company, Torm operated several small steamers in the herring trade between Scotland and Königsberg, Germany. It was the success of this venture and the promise of a rising freight market that led the captain to form a limited company composed of private investors. That was in January 1889. The fledgling company’s first vessel, the 1400 dwt s/s Alice, was built at Howaldtswerke in Kiel and delivered by December of the same year.
Since then, Torm has ridden out financial ups and downs, depressions, recessions, oil crises, world wars and numerous local conflicts and still continued to earn a reasonable profit and plot out a course for future growth. There is no reason to believe future world events will be any kinder to shipping than those in the past. But as the company proceeds throughout its second century of service, it does so with the strength and resilience earned through more than 100 years of experience.
2006 will mark Torm’s 115th anniversary, and the company is excited about the future. It is currently halfway through its biggest new-building program ever, and has taken delivery of six new ships since 2001 and has six more scheduled for delivery by 2006. Add to this the company’s recent record-breaking financial performance and it seems clear that it should remain number one in its field.
VTR
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