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NEW SALVAGE STRATEGY:
CHALLENGING
THE STATUS QUO

From a main focus on the emergency response market, our salvage division is branching out to pursue growth in wreck removal and offshore decommissioning.

“We’re an acknowledged leader in emergency response, with a market share around 30%,” says Svitzer Salvage CEO Peter Pietka. “With our aim of being the loss mitigation partner for our customers, providing emergency preparedness and response, our core business will be further solidified and the industry better prepared. But we haven’t participated much in wreck removal and have only a small market share. Looking ahead, our plan is within a few years to become a wreck removal market leader.” Rapid expansion in this market is entirely feasible for Svitzer, as there are only very small technological differences between wreck removal and emergency response work. The accumulated know-how and experience from emergency response work give us a solid foundation of operational skills.

“We see the wreck removal market growing by 10% a year, driven by legislation,” says Pietka. “Governments are increasingly mandating that wrecks be removed. Because this legislation is environmentally driven, removal costs are acceptable even if they exceed the value of the wreck.”

PLANNING AHEAD
The third leg of the new salvage strategy is the offshore decommissioning market, which is in its infancy in most areas outside the US. “Pressure is building to remove 30- to 40-year-old offshore infrastructure,” observes Pietka. “No one doubts that this market will take off and has huge potential – it’s just a question of time.” Svitzer’s game plan is to enter the market immediately in regions where there are a number of old structures ready for decommissioning. 

Expanding from one to three pillars will allow Svitzer to achieve profitable growth and reduce dependency on the very volatile and unpredictable emergency response market. “The new strategy means we will now have three markets rather than one,” says Pietka. “Both new areas offer longerterm contracts, which will give us coverage and lessen dependency on emergency response. We started to implement this strategy last year, and it has already proved itself, as a very large wreck removal contract in Iraq enabled us to post good results in 2013 despite our main emergency response market being at an all-time low.”

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