J Lauritzen A/S
J Lauritzen A/S
Wholly Owned Subsidiary of JL Fondet
Incorporated: 1914 as J. Lauritzen
Sales: $458 million (2006 est.)
NAIC: 483111 Deep Sea Freight Transportation
J. Lauritzen A/S is one of Denmark's largest and oldest shipping companies. Formerly a diversified industrial conglomerate, with operations spanning shipbuilding to industrial production, Lauritzen has refocused itself around its core shipping operations since the early 2000s.
The company operates through three primary subsidiaries: Lauritzen Bulkers, focused on dry bulk cargos; Lauritzen Kosan, which specializes in liquefied gas transport; and Lauritzen Tankers, a midsized shipper of chemicals, crude oil, and related products. The company sold off its fourth division, the joint venture NYKLauritzenCool in August 2007.
Lauritzen Bulkers is the company's largest division, operating a fleet of more than 70 vessels, including 55 Handysize carriers and a number of Handymax, Panamax, and Capesize carriers. This division also has an active new-build program, and expects to take delivery on 22 new vessels between 2007 and 2011. Lauritzen Bulkers generated more than 54 percent of the company's revenues, which topped $458 million in 2006. Lauritzen Kosan operates its own fleet of 36 semirefrigerated, pressurized, and ethylene gas carriers, as well as 20 pressurized gas carriers as part of a Hong Kong-based joint venture with Unigas. Lauritzen Kosan's new-build program hoped to add 12 more vessels to its fleet by 2011. This division adds nearly 20 percent to the company's total revenues.
The youngest division, Lauritzen Tankers, was created in 2004, and boasts a fleet of eight medium-range tankers, with orders for 15 new ships scheduled for delivery by 2011. Lauritzen Tankers accounted for just 5 percent of group turnover in 2006. The sale of the company's Reefer (refrigerated vessel) division cut more than 16 percent of the group's revenues. Lauritzen is wholly owned by the JL Foundation, established by the founding Lauritzen family in 1945. Torben Janholt serves as group president and CEO, while Jens Ditlev Lauritzen, great-grandson of the company's founder, is president of the Lauritzen Bulkers division.
SHIPPING START IN 1884
Lauritzen's history reaches back to the late 19th century, when Ditlev Lauritzen set up in business as a timber merchant in the Danish town of Esbjerg in 1884. Lauritzen, who was just shy of 25 years of age at the time, already had a background in the timber trade, having trained at the company owned by his father, Jørgen Lauritzen, a successful lumber merchant and shipowner. Ditlev's father also supplied the name—J. Lauritzens Trælasthandel—for the company since, at that time, the age of majority in Denmark was set at 25.
Ditlev Lauritzen proved to be an able businessman, and he expanded his range of operations to include trade in coal and fertilizers. By the mid-1890s he had established himself as one of the preeminent merchants in the area. Lauritzen also became a noted political figure and was appointed to the position of French Consul in 1893. By then, however, Lauritzen had launched what was to become his most significant business, that of shipping. In 1888, Lauritzen acquired a first steamship, the Uganda, and by the early 1890s he had turned his attention more fully toward the shipping industry. This led to the founding of a dedicated shipping company, Dampskibsselskabet Vesterhavet, in 1895.
The early years of the 20th century saw Dampskibsselskabet Vesterhavet shipping business rise to prominence in Denmark. By the outbreak of World War I, Lauritzen's business interests had concentrated more fully on the shipping market. When the war began in 1914, Lauritzen and his family moved back to Copenhagen from Paris and established a new holding company, J. Lauritzen.
While dry bulk cargo was to remain the company's major shipping focus, Lauritzen developed operations in other shipping segments as well. In the 1920s and 1930s the company became one of the pioneers in the operation of refrigerated vessels, later to become known as reefers. The company also extended its geographic focus, from its original Baltic Sea and Scandinavian markets, to the North Sea. Following World War I, the group began shipping to the Mediterranean, and by the 1930s had launched operations across the Atlantic as well.
SHIPBUILDING IN 1937
Despite its emphasis on shipbuilding, Lauritzen maintained a broad range of business interests. The company became active in the engineering and construction fields, and also developed industrial production operations. One of the longest-lasting of the latter was the company's involvement in refrigeration equipment, later brought under subsidiary Sabroe Refrigeration AS, which remained part of the company until the late 1990s.
Ditlev Lauritzen died in 1935 and the company's operations were taken over by sons Ivar and Knud Lauritzen. The brothers were quick to expand on their father's business. A major milestone in the company's history came in 1937, when Lauritzen's industrial interests led it to combine production with its core shipping interests through the takeover of what would later be known as Aalborg Industries.
That company had been founded in 1912 as the Aalborg shipbuilder P.Ph. Stuhrs Maskin-og Skibsbyggeri. The Aalborg business launched production of its own marine boiler design in 1919, then expanded that expertise with the launch of a range of industrial boilers for the dairy and textile industries into the next decade. By the 1930s, Aalborg had perfected its own burner design as well. Following its takeover by Lauritzen, the company changed its name to Aalborg Verft (or Shipyard), and shifted its focus more fully toward the marine market. In 1944, the company launched production of its first power station boiler designs. In the meantime, during the war, Lauritzen used its shipping fleet to help Denmark's Jewish population escape to Sweden.
At the end of the war, the Lauritzen family created a new trust, JL Fondet, which took over as the owner of the family's various business interests. While J. Lauritzen itself later went public for a time, the majority of the company's shares nonetheless remained under the control of JL Fondet and the Lauritzen family.
Together, we CREATE added value. We optimise the operations of our business partners through safe, trouble-free, innovative and value-creating transportation services. We create a working environment that gives job satisfaction, stimulates professional and personal development and acknowledges the values of all employees. We ensure that JL is an attractive investment for its owners. Together, we CREATE a world-class shipping company.
Lauritzen continued to build up its shipping operations in the decades following World War II. The company also expanded its shipbuilding business, gaining control of the Danyard shipyard in Frederikshavn by the 1970s. The company added new sales and services subsidiaries for its shipbuilding and industrial products operations, opening offices in the Netherlands and Singapore at the end of the 1970s. By then, however, the international shipbuilding industry was undergoing profound changes, which saw a shift in production from the Western yards to fast-growing shipbuilders in Asia. In the mid-1980s, Lauritzen was forced to consolidate its own shipyard operations, transferring the Aalborg shipbuilding operation to Danyard starting from 1985. The Aalborg site then focused its operations on manufacturing industrial products. As part of this effort, the company created two new subsidiaries in 1987, Aalborg Boilers A/S and Aalborg Marine Boilers and Engineering A/S. The latter subsidiary was then expanded through the acquisitions of Dansk Fyrings Teknik, based in Odense, in 1988, and of CISERV AB, a Swedish specialist in diesel engine servicing. In 1990, all of Aalborg's boiler operations were merged into a single unit, Aalborg Ciserv.
STREAMLINED SHIPPER IN THE NEW CENTURY
Lauritzen continued to develop new shipping expertise into the 1990s. In 1989, the company acquired fellow Danish shipper Kosan Tankers A/s, adding that company's focus on the transportation of liquefied gas. These operations were quickly expanded, with the purchase of a 50 percent stake in Gasnaval S.A., based in Spain, that same year. By 1993, the company had gained full control of Gasnaval. Later in the decade, the company teamed up with Hong Kong-based Unigas, forming a joint-venture partnership to extend Lauritzen Kosan's operations into that region. In the meantime, the company had gained majority control of Danish roll-on/roll-off group DFDS, which also operated passenger ferry and sightseeing cruises. The DFDS shareholding was placed under a new holding company, Vesterhavet A/S, controlled by JL Fondet, which also became the immediate parent company of J. Lauritzen A/S.
Hard hit by the global economic recession at the beginning of the 1990s, Lauritzen struggled through several years of steady losses during the decade. The company's shipbuilding operations were especially troubled, and ultimately were unable to compete in the increasingly global market. By the late 1990s, Lauritzen made the decision to shut down its shipbuilding operations, and the last vessel to be built by Danyard left Frederikshavn in 1999.
By then, too, Lauritzen had begun restructuring its industrial operations. Throughout the 1990s, the company had maintained an active acquisition program in support of its industrial businesses. The company's Sabroe Refrigeration unit acquired Henry Soby AS and then Gorlev Foundry in 1990, while Aalborg Ciserv acquired Cole Engineering in the United Kingdom. Other acquisitions by Aalborg including A/S Vesta in 1993; Sweden's Sunrod Group, including production facilities in China, in 1994; Pipemasters Oy, based in Finland, in 1997; the U.S. company Zurn Energy, bought from Zurn Industries, based in Pennsylvania; and Wiesloch Marine & Industries BV, in the Netherlands, in 1999. By then, Aalborg had adopted its new name, Aalborg Industries.
At the start of the new decade, however, Lauritzen moved to refocus its operations around its core shipping operations. The company spun off Sabroe Refrigeration, then sold Aalborg Industries in a management buyout backed by the Axcel investment group. Restructured around its core bulkers, reefers, and gas tanker operations, Lauritzen added a new division in 2004, launching a dedicated crude oil and chemicals transporter, Lauritzen Tankers.
- Ditlev Lauritzen founds timber merchant J. Lauritzens Trælasthandel in Esbjerg, Denmark.
- The dedicated shipping company Dampskibsselskabet Vesterhavet is established.
- A new holding company, J. Lauritzen, is created to focus on shipping.
- Company acquires Aalborg shipbuilding and industrial production operations, then later acquires Danyard shipyard in Frederikshavn.
- Aalborg shipbuilding operations are transferred to Danyard.
- Kosan A/S is acquired, forming Lauritzen Kosan as a liquefied gas tanker specialist.
- Aalborg Industries is divested as part of restructuring around core shipping operation; company acquires Sweden's Cool Carriers and forms Lauritzen Cool reefer (refrigerated vessel) subsidiary.
- The NYKLauritzenCool joint venture is formed with Japan's NYK.
- Stake in NYKLauritzenCool is sold and company regroups around core of dry bulk, liquefied gas, and oil and chemicals tankers.
By then, the company had gained world-leading status in the reefer market, following the acquisition of Swedish rival Cool Carriers for $35.4 million in 2000. The company then renamed its reefer subsidiary as LauritzenCool. As Lauritzen CEO Torben Janholt told Port Development International: "It is vital that the industry undergoes a comprehensive restructuring in order to ensure a marked improvement in the reefer industry's earning level. With the establishment of Lauritzen Cool, the first step toward the long sought-after consolidation of the global reefer market has now been taken."
Lauritzen took the next step in that consolidation in 2005, when it agreed to merge LauritzenCool into a new 50-50 joint venture with its major Japanese rival, NYK Reefers. The newly merged company took on the name of NYKLauritzenCool, forming one of the world's largest reefer fleets with more than 70 specialized vessels. The merger, however, proved to be a step toward Lauritzen's exit from the shipping sector it had helped pioneer some 80 years earlier. In August 2007, the company announced that it had agreed to sell its share of NYKLauritzenCool to NYK. That company was then renamed as NYKCool.
Lauritzen regrouped its business around its three core subsidiaries, Lauritzen Bulkers—itself led by Jens Ditlev Lauritzen, the last of the founding family to remain active in the company; Lauritzen Kosan; and Lauritzen Tankers. The newly refocused company launched a major investment program aimed at expanding its fleet of more than 175 vessels with as many as 50 new vessels to be completed between 2007 and 2011. J. Lauritzen A/S upheld a Danish shipping tradition of nearly 120 years.
M. L. Cohen
East Gate Shipping Ltd. (China); Euroamerica S.A. (Argentina); Gasnaval S.A. (Spain); Greeden Ltd. (Bahamas); ID Handysize A/S; J. Lauritzen (Australia) Pty. Ltd.; J. Lauritzen (Japan) K.K.; J. Lauritzen (USA) Inc.; J. Lauritzen A/S; J. Lauritzen Inversiones (Chile) Ltda.; J. Lauritzen Singapore Pte Ltd.; J. Lauritzen UK Ltd.; Lauritzen Bulkers A/S; Lauritzen Kosan A/S; Lauritzen Reefers A/S; Lauritzen Tankers A/S; NYKLauritzenCool AB (Sweden); Owneast Shipping Ltd. (China); Quantum Tankers A/S; Unigas Kosan Ltd. (China; 50%); Zuper Logistics Private Ltd. (India; 33%).
Jardine Pacific Ltd.; TUI AG; Marubeni Corp.; Sumitomo Corp.; Louis Dreyfus S.A.S.; Danzas Group; The Bidvest Group Ltd.; Hanjin Shipping Company Ltd.; Neptune Orient Lines Ltd.; DSV A/S; Maersk Line UK Ltd.
"Chiquita Sells Fleet," Traffic World, May 2, 2007.
"EC Approves Merger of NYK, LauritzenCool," Air Cargo World, October 2005, p. S52.
"J. Lauritzen, NYK Reefers Strike Deal," Journal of Commerce, February 21, 2005, p. S44.
"Laurentzen Surprises the Sceptics," LPG World, September 3, 2003, p. 3.
"Lauritzen Reefers Acquires Cool Carriers to Create World's Largest Reefership Fleet," Port Development International, December 2000, p. 3.
MacCarthy, Clare, "J Lauritzen Shares Surge As It Sells 50% Sabroe Stake to York," Financial Times, March 30, 1999., p. 30.
"NYKLauritzenCool to Be Renamed NYKCool," Marine Link, August 2, 2007.
True, Chris, "Cold War on Reefers," Port Development International, December 2000, p. 18.