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Odfjell: $1m vessel efficiency upgrades investment bring $7m in savings

Photo: Marcus Hand Laurence Odfjell at Marine Money Asia
Tanker owner Odfjell is not put its eggs in one basket when it comes to future fuels and stresses the gains that can be made from efficiency upgrades to existing vessels.

“We have survived two world wars. We have survived 170 years, four generations of all kinds of issues. So, we're not going to bet the farm on one fuel,” Laurence Odfjell, chair of Odfjell stated at Marine Money Asia in Singapore on Tuesday.

For the Odfjell’s newbuilding what is important is adaptability and flexibility he said in an onstage interview with Kenneth Lam, Chairman & CEO of Credit Agricole Asia Shipfinance.

Laurence Odfjell urged other shipowners to look at efficiency gains that can be made on existing ships, which not only reduce emissions but also make good economic sense.

He said that the company started a process of cost reduction and energy efficiency reductions in 2014, and that it was really about survival and the company had an economic reason to reduce its costs.

“That of course has become a good sustainable journey with the environment that started with economic, good business motive.”

Odfjell focused on its core fleet of 15 – 16 investing $1m per vessel in improvements, including offhire. By adding improvements such as new propellors and Mewis Ducts the company said a 25 – 30% efficiency gain on the vessels. The result has been the vessels save $1m a year, which in the case of the first ships that were upgraded means Odfjell has now saved $7m on a $1m investment. “Those are some of the best investments we’ve ever done,” he stated.

“So this is good business and that's something I think that a lot of ships on water today, should look at the propeller, look at this kind of the low hanging fruit.”

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