Paul Mulder – CEO, ALP Maritime Services – Netherlands
Paul Mulder introduces the young, dynamic company and its plans to hold a market leading position in the high-end tug market, particularly thanks to the ALP FUTURE Class – a market changer in the domain of anchor handling tugs.
Please give an overview of where the company stands today, and what strategic initiatives you are focusing on as CEO.
ALP Maritime Services was created five years ago by a management team with substantial experience in the long-distance towing market, especially the FPSO towage market. In the decade prior to starting the company, our management team was involved in many of the non-self–propelled FPSO towage projects globally. We initially envisioned ALP Maritime Services as a consultant in this market, but the companies we approached asked us instead to take a position with third party vessels. We thus teamed up with Harms Bergung to commercially manage their vessels in the field of long distance ocean towage, salvage, and offshore installation projects for two and half years. Marketing another company’s vessels is convenient as you have little exposure but also comes with the risk that if your partner decides to change strategic direction, it is over and out for you. The experience of working with Harms Bergung’s high end DP and anchor handling vessels led us to believe that with some modifications, we could make even more multi-functional and widely usable vessels. In response, we decided to design our own vessels, the ALP FUTURE Class.
The ALP FUTURE Class combines the best features of long-distance towing vessels with those of offshore boasting capabilities in versatile towing, positioning, hook-up, survey and maintenance. How did you elaborate the design of these vessels?
It is always a challenge to combine a towing vessel with an anchor handling vessel. Others have tried before, but we believe that our new concept will be a game changer for the market. Ulstein helped us to combine the capabilities of an anchor handler with a towing vessel, and the result is the ALP FUTURE Class. Ulstein was our preferred partner thanks to their X-BOW design, as it heavily reduces the pitches encountered during adverse weather conditions and thus increases towing efficiency. Four of these vessels are now on order at the Niigata Shipyard in Japan, a yard with which our management team has a fifteen years relationship. The first ALP FUTURE Class vessel will be in service by early 2016, and the other three will be delivered in two to three month intervals up to August 2016.
How will these vessels better address the growing demands in the market than what some of your competitors might offer?
Our vessels are destined for long-distance towing, generally collecting large floating objects from shipyards in the East and delivering them to locations around the world. They thus have no restrictions in terms of geographic coverage – we can cross all the world’s oceans with this vessel.
Our FUTURE Class boasts not only 3500 tons fuel capacity, which is roughly 1.5 times that of current vessels on the market, they also have 300 ton Bollard Pull compared to the 200 ton of our competitors. We decided to make such a powerful ship for two main reasons. Firstly, we want to be able to go from mainland to mainland without refueling and depending on a fuel core somewhere in the middle of the ocean. This concern is all the more pertinent given the piracy issue in the Indian Ocean that has closed off the preferred towing route going north of Madagascar.
Secondly, we want to ensure the safest towing service possible, especially as the objects we are towing are becoming bigger. In the last decades, three tug towage was introduced, bringing benefits in terms of more rapid delivery time. However, there exists an increased safety risk related to a problem or blackout of one of the three towing vessels. With two vessels, you can change the heading of the tow and remain a bit off center of the towed object. However, with three vessels, if in worst case the center tug has a blackout and the forward propulsion stops then the very heavy tow wire could pull the tug back to the towing object risking a collision in minutes. This may not only damage the highly expensive new build, but more importantly create safety concerns for the people on board ships. With 2 x 300 tons bollard pull instead of the 3 x 200 tons of our competitors, we do not give in to transit time and we can go back to a two vessel configuration – a large increase in safety.
Furthermore, we have chosen to design the vessels in accordance with Dyn-Post Autr DP II notation, which ensures systems redundancy so that, for example, all engines are independently operational. This obviously increases safety. In a worst case scenario, we can run the our four large thrusters just to steer away from the course of the towed object. As a result, with tows that are even too large for two tugs, such as the new Ultra-Large FLNG units, we feel confident using three of our tugs as we have reduced the chances of a full blackout.
Aside from servicing the FPSO industry, what type of expanded applications do you envision ALP Maritime Service’s ocean towage vessels encompassing in the future?
Our FUTURE Class are all multipurpose vessels. For example, they will be able to assist in the future decommissioning of FPSOs installed 10-15 years ago, as well as transporting FPSOs for refurbishing from yard to site and back to yard. In addition, we can place ROVs on board our vessels and a big storage drum for nylon rope in order to serve as a mooring survey or replacement vessel for a good number of projects.
Although the fundamentals of the broader oil and gas industry are relatively strong, companies are still operating in a relatively stringent landscape with low oil prices, regulatory pressures, and supply and demand volatility. How can companies looking to reduce their bottom line stand to benefit from ALP Maritime’s products and services, especially given the more high-end and ‘premium’ nature of your portfolio?
The design of the new vessels makes them very fuel-efficient compared to their peers and for most tows our clients can use two of our vessels versus three of our competitors. This also implies a lower environmental footprint. Most importantly, companies can substantially decrease transit times by using our vessels. As an example, we are towing the Songa Equinox from Korea. The unit has been delayed at the yard and was intended to be transported by Songa’s own propulsion at 6 knots. To make up for this lost time, Songa has selected ALP to do the transport instead, as we can knock 25 percent off the initially intended 100 day transit time. As an oil rig may have a day rate upwards of USD 450,000 per day – knocking off 25 days in transit time represents a substantial savings.
Clients do not choose us because our ticket price for the vessel is initially lower, but because of what our overall package and service add in terms of cost and efficiency savings in the long term. Furthermore, we ordered our FUTURE Class anti-cyclically when the shipbuilding industry was quite depressed. We thus have favorable prices for these vessels, meaning the gap between ALP and our competitors is very marginal. When taking into consideration safety, our overall price differential is quite small – especially when you are dealing with multi-billion dollar projects.
What areas of focus will the company’s expansion strategies encompass moving forward?
Our major focus is to expand our fleet of high end towing vessels, particularly the FUTURE Class. We will always consider new opportunities, but we are in the position we want to be now since over the course of 1.5 years, we will move from zero to 10 vessels, a substantial figure in a world market of approximately 25 vessels. ALP Maritime Services will thus be in a market leading position with the delivery of these 10 most powerful vessels in our market niche by 2016.
Our clients around the world have shown great interest in the FUTURE Class, and now we need to see commitment from their end to the change these vessels entail, as we are the only towing company that has invested heavily in towing vessels with multifunctional anchor handling capacities and DP II capability. The towing business is still behind in terms of adapting these more advanced DP technologies, and, if the FUTURE Class becomes the new industry standard, maybe 10 to 15 of these new towing vessels will need to be ordered.
ALP Maritime Services was acquired by Teekay in 2014. What competitive advantages do you foresee with being a part of the Teekay group?
Financing such an ambitious project as the FUTURE Class was of course a challenge, but many companies were interested. Initially, ABN AMRO committed to bank finance before we even went to the capital market. Without this firm support, our business case would not have come to fruition. During this process, our management team met Teekay. Not only was the company interested in our business case, there was simply a great connection between people and management teams. Our visions and cultures are very aligned. As a result, Teekay decided to support us by investing in the FUTURE Class.
Within the Teekay organization, we benefit from the global presence of the group and are fully integrated in the Teekay systems. This is extremely helpful for a start-up organization, providing not only support but the learnings from the trial and error tests they have already completed. Teekay is an owner of FPSOs, the objects that we tow and install. Thus, if they have operations in the future, they could use our tonnage.
How much of a factor, in terms of resource and capabilities, has the Netherlands served in the company’s development?
Indirectly, the Netherlands has substantially fostered our growth since the cradle of the ocean towing business is here in the Netherlands, and the towing industry is in the blood of almost every Dutchman. As a result, the knowledge base in this field is extensive, and we are also able to offer this knowledge in house. Otherwise, we have very few clients in the Netherlands, apart from several large international players such as SBM Offshore and Heerema. Our service base is more global, with many clients in the Far East and the Americas.
From your perspective, given your long-term experience with ocean towage, how has the industry evolved over the years?
What has especially matured is the floating production industry, which has led to new approaches from the towing industry. I would say the industry has evolved quite substantially from when I started in 1998, especially in terms of the strict focus on safety and quality. Especially after the Macondo incident, the entire industry was under scrutiny, including the towing sector. The towing industry was at one point a cowboy industry with few providers. Now tenders are large detailed packages, and we are even now making purpose-fit towing vessels for the floating production industry. As one example, back-up vessels must now be provided for all projects, when previously exact tonnage was acceptable.
Taking into considering all your previous roles and experiences, what ultimately gave you the courage to become an entrepreneur and create ALP Maritime Services?
I started the company with partners Leo Leusink, our COO, and Arjen de Geus, our CFO, with whom I had been working all over the world during our time at Fairmount. We grew with that company – from its beginnings as a broker agent with a vessel and time charters through to owning and operating towing vessels. When Fairmount was sold to Louis Dreyfus, ambitions changed. We thus decided to start our own venture, with the goal of sharing our knowledge with former clients, especially in the eastern yards. These yards, however, preferred to have a fourth competitor owning vessels, and ALP Maritime Services has evolved in this direction.
Five years into the journey with ALP, where would you like to take the organization in the next five years?
I would like ALP Maritime Services to be recognized as one of the three leading towage companies in the industry, with our ALP FUTURE Class vessels being not only accepted by the market but also bringing changes to the industry standard. It will be with great pride that we prove the value that the ALP FUTURE Class adds to the market. Furthermore, I want to grow ALP over the next five years, while still maintaining close links to the day-to-day business in a lean, mean organization.