Patricia Tendrich Pires Coelho, Founder, Asgaard Navegacao, Brazil
Patricia Tendrich Pires Coelho, Founder of Asgaard Navegacao, details her vision for the company she founded, how quality is the mark of Asgaard Navegacao, and why this will make her ships competitive not only within Brazil, but also on a global level.
You have previously stated you wanted a company entirely in your vision—a new enterprise rather than buying into an existing entity. What is your vision and what are your personal objectives?
Prior to starting Asgaard Navegacao, I had a due-diligence report compiled looking at existing Brazilian companies, because establishing a business anew is always more difficult than taking over an existing operation. The businesses available however, had problems, and their ‘DNA’ as it were, was not mine—I could not engage with these business models. Their strategy was not one I approved of, and, due to these companies having major liabilities, I decided that they did not represent an attractive opportunity. I am not a specialist in reinvigorating flagging businesses.
My vision is of a Brazilian based, internationally operating shipping company, and in order to achieve this my main objective is to first establish a local fleet. This will be achieved under the umbrella of what I describe as ‘The Brazilian Jones’ Act’ (Brazilian law 9,432, which protects Brazilian flagged vessels), and with Maritime Sovereign Fund (FMM) monies. The ultimate result will be a fleet of yellow and blue vessels (the colors of the Brazilian flag), providing jobs and services here in Brazil.
The biggest challenge is creating a Brazilian flagged fleet that is internationally competitive. CAPEX in Brazil is extremely high, and because everything is tailor made for Petrobras this means that an internationally competitive vessel must be highly developed, offering premium services. Petrobras is highly demanding, and Asgaard has responded to this by equipping its fleet with Rolls Royce engines for example. This means that our vessels are equipped to deliver services to any company, in any location.
This focus on the international market means that Asgaard Navegacao has a management structure that is always looking at the wider picture with regard to how the company manages its assets. This, for example, has seen the business equip its ships with the same IBM systems used by Maersk. Due to our pursuit of high quality services, our enterprise came fifteenth in Petrobras’ league of service providers when audited, despite being very new to this market.
How will Asgaard Navegacao, as a new entrant, push past more experienced players to deliver services?
This is a key issue. Training and acquiring seafarers and management personnel of sufficient quality to sustain this business is essential. When Petrobras audited Asgaard Navegacao, they used DNV, an international auditor at my behest, because I wanted to have internationally recognized approval for my services. Excellence in service was a principle reason for a high grade arising from the audit. This is exactly the issue the wider industry in Brazil must battle with; attracting new staff, and training employees to deliver high quality services is important to maintain growth in the sector. There are labor regulations, which means that even foreign flagged vessels have to employ a certain amount of Brazilian mariners. Over the last decade, because of this policy, there is now a Brazilian core of highly trained captains and engineers who have gained experience in the wider market. There remains, however, a big gap. Attracting more young recruits to the industry is vital.
Reaching premium technology markets such as the Anchor Handling Tug Supply (AHTS) sector is another key aim of Asgaard Navegacao. How will the company attain this if labor is in short supply?
Achieving premium services will be a learning curve, and it is the reason I started working with Oil Spill Response Vessels (OSRVs), and have now moved onto bidding for Platform Supply Vessels (PSVs). This will allow Asgaard Navegacao to develop the skills ready to move into operating more complex machinery.
Developing bases in Macae and the North of Brazil, and the staff to use them are key to achieving this aim. Until 2015, Asgaard Navegacao will focus on acquiring ten Brazilian flagged vessels and bareboating other ships. Another means of expanding the fleet could include buying foreign ships and re-flagging them as Brazilian.
Asgaard Navegacao is a real company that needs to evolve; becoming an effective fleet operator does not happen overnight. Our aim is to fully understand the needs of the operators working in Brazil—this will form the point to which we wish to develop our staff and equipment.
As a newcomer to the market, the focus is clearly on quality of service. At the moment, the transparency of the bidding procedures has improved a great deal, and this means it is far easier to gauge exactly what standard one must operate at to satisfy customer demand.
Asgaard Navegacao is confident that it can win bidding rounds for offshore services. The company has prepared meticulously for these auctions, and is deserving of the opportunity to provide these services. Our company spent two years and eight months before it was ready to take part in an auction for Petrobras. Systems, management and personnel are all key factors to being able to deliver and to compete in these auctions—Asgaard Navegacao has the qualities required to deliver.
How important was the preparation process for bidding for Petrobras contracts to proving your company’s credibility when it came to raising capital to construct your ships?
First of all, I put forward my own money, which was supplemented by seed finance from family, friends and one Brazilian company, an EPC company called NM Engineering who has previously built refineries for Petrobras. This company had sought to diversify vertically, which was one motivation for them to lend me their support. They are the principal investor.
Still, however, Asgaard needed more capital. I brought two very wealthy individuals from the US that invested in shipping to give them a detailed view of Asgaard. They have shares in the company.
Thirdly, the next source of capital to be targeted is institutional investors, including private equity companies and pension funds from the US and structured investors from Norway. This process started a month ago. It is important to have a delivery program of both vessels and contracts because this gives investors confidence that they will receive a concrete return on their money. One of the principal reasons that Asgaard Navegacao’s boats currently have Rolls Royce engines is because this reinforces the quality of the service that this company is providing. It underlines to investors the fact that our ships will be capable of operating in any location, due to their quality. This is greatly reassuring to investors, particularly international vessels who will be looking for a return on their money.
Some of Asgaard Navegacao’s ships are built without a preexisting contract. What makes you so certain of obtaining contracts quickly?
Shipping is having a vessel, not having a contract. It is having a strategy and a fleet, first and foremost. The vessels constructed are designed to be attractive to Petrobras, designed to the specifications that Brazil’s hegemony requires. This makes the chances of obtaining a contract far more secure. Starting with vessels such as OSRVs, which are also in demand, will guarantee Asgaard Navegacao secures contracts, gains a reputation for reliability and acquires experience for more complex systems.
Whilst Petrobras holds 76 percent of the Brazilian market, other IOCs are entering the market, and their share of the market is growing. Having vessels versatile enough to work for any provider again reduces risk substantially.
How do you deal with potential fluctuations in the market?
A vessel is a mobile asset, and if a particular region is not offering high rates for ship contracts, or not hiring, it is possible to move the vessel to another area. This is why our company is focused on being able to provide services anywhere.
Do you feel you have a clearer concept of the whole sector because you are an incomer to the offshore services market?
I think that I have a complete vision of this sector because acting as a business consultant for many years I could learn by observing the mistakes of other players. As a lawyer, I have less experience in the maritime sector than someone who is say, a ship’s captain, but I do have the ability as an entrepreneur to address practical problems with practical, logical solutions. We learn through experience and I have been fortunate as an advisor to have gained experience which can guide me now.
Shipping providers operating in the offshore services market have to deliver a highly professional skilled job. They are supplied by businesses repairing and maintaining their ships and assets, who are supplied by parts providers. All these businesses are growing as demand balloons due to Petrobras’ huge appetite. It is entrepreneurs like myself who are filling this gap.
Asgaard is a reference to the home of the Norse Gods. Why did this name seem so appropriate for your company?
I have had support and advice from Norwegian companies; I have Norwegian friends and Norwegian parts are included in my vessels. I admire Norwegians for their attitude and manner of working. I like the idea that the Brazilian offshore sector could learn a great deal from the success Norway has had in utilizing its offshore resources.
Asgaard, as a name, has great connotations, it being the home of the Norse Gods. It captures the romance that still exists with regard to sea going vessels. I also like the rather clever fact that the name has a triple ‘A’ within it!
Whilst I have no particular Norse God I would wish to associate with, I do think that when it comes to business, Brazil must keep the faith and believe that success will come. With such a huge resource under the sea, Brazil’s path forward must end with triumph.