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TURNING AROUND 

A CHALLENGED

BUSINESS

Working constantly with employees remains Svitzer Australia's preferred option for dealing with the very real commerical challenges. 

Svitzer Australia faces the need to turn around a very challenged business. Results are down compared to last year, and we should expect our business to be further negatively affected by the slowdown in China – as well as by other global economic conditions outlined on page three.

Slowing economic growth domestically and falling commodity prices globally have contributed to a plateauing in the volumes passing through the nation’s ports. Confronted with this situation, as well as greater competition from new participants, Svitzer has been taking a hard look at all aspects of our harbour towage business. Rather than taking a top-down approach to cutting costs and improving productivity, we have seen building stronger employee engagement as the key to increasing competitiveness. 

“Given their firsthand knowledge of Svitzer’s operations and the needs of ourcustomers, it simply made good business sense not only to listen to our employees, but to go one step further and directly involve them in building a more sustainable and competitive business,” says Mark Malone, Svitzer Australia’s Managing Director. As a first step towards this goal, Svitzer commissioned the Macquarie University’s Centre for Workforce Futures to interview as many of our employees as possible. The objective was to gain a
deeper understanding of how they view our operations and what management can do to better support them. All told, the Centre interviewed more than a quarter of the workforce. It is the first time Svitzer had undertaken such an exercise. 

BUILDING RELATIONSHIPS
Encouragingly, a key conclusion from the research is that most people in most ports love what they do for a living and think Svitzer is a good place to work. But equally,it also confirmed that they want a greater say in the decisions that affect them and how they do their jobs. We are now working to turn the feedback and ideas received into concrete actions that will make it easier for our employees to do their jobs, while helping to build a more competitive and sustainable business. 

“Unlike others that take a top-down approach to cutting costs and improving productivity, working constructively with our employees remains Svitzer’s preferred option for dealing with the very real commercial challenges we confront and making the changes  required,” said Mark. The ultimate beneficiary of all we are doing will be our customers, both in terms of the tariffs they pay and the service they receive. And already the changes we are making, including being more responsive to the needs of shippers, are producing dividends in what is an increasingly competitive marketplace.

BUSINESS GROWTH
Over the past twelve months we signed long term contracts with some of the world’s biggest shipping lines, including the Mediterranean Shipping Company (MSC) and ANL, part of the Marseille-based shipper CMA CGM. And on 1 April this year our new  agreement commenced with Clipper Bulk, one of the world’s largest owners/operators of Handysize and Supramax vessels. Svitzer is now providing safe, reliable towage services to all their vessels visiting Australian ports. Lastly, during the course of 2014 we successfully grew our market share in the ports servicing Australia’s three largest cities: Brisbane, Sydney and Melbourne. Going forward, Svitzer will continue to value the long-term relationships we have developed with our customers over short-term gain.

While the harbour towage side of our business faces an increasingly challenging operating environment, our concerted effortsto pursue emerging opportunities in the off-shore oil and gas industry has gone from strength to strength. In the last twelve months, Svitzer added PNG-based Oil Search to the list of global energy suppliers that rely on us to keep their vessels moving. We now have a contract to deliver towage and other marine services to their Kumul Terminal. Meanwhile, our long term contract to deliver towage and pilotage services to Chevron’s new Gorgon LNG Project has begun. We have taken possession of our four new eco-tugs and pilot boat and have contracted the high-quality, professional crews that will man them. 

INVESTING IN THE FUTURE
To ensure that we can continue to deliver the highest level of service to our customers both now and well into the future, we are investing significantly in renewing and expanding our fleet and in maintaining and improving the skills and expertise ofour people. Last  year alone, we acquired one new and three second hand tugs. We have also acquired a new full-mission tug simulator, a tool that has greatly enhanced our in-house training capabilities. Located in Fremantle, this new simulator is being used to improve the skills and readiness of our existing crews. It will also be employed as part of our recruitment process to assess more closely the abilities of potential candidates.

As well as investing in the capabilities of our employees, Svitzer is commited to providing them with safe and healthy workplaces. As a result of the improved procedures we’ve introduced, the new technology we’ve installed and the ongoing awareness programs we’ve instituted, working on a Svitzer tug has never been safer than it is today. 

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