BROSJYRE utkj. (Page 1)

Newsmagazine for Leif Höegh & Co ASA (LHC) No 1 - 2000

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CONTENTS

Unicool

LHC buys HUAL

Green Effort

Safety

Gorthon Lines

Port of Rotterdam

Super-intendents

Officers`conference

Marketoutlook

Fleetlist &Gallery 16

GORTHON LINESHelsingborg - Sweden

Leif & Höegh & Co ASA has finalised the purchase ofthe remaining 50% of Unicool from SAMC, nowowned by Mr Stamatis Restis’ Capital Finance,leaving us in full control of the largest reefer operatingentity in the world with over 20% market share in the350,000 cbft segment.

The reefer segment is currently at a cyclical low. In aditionstructural changes to the segments are predicted. LHC as100% owner of Unicool is in a very favourable position tocapitalize on these changes.

The underlying fundamentals for the segment are verystrong. At the start of 1999 there was an estimated 10%-12%difference between supply and demand in the reefer businessreferred to as over-capacity. This was mainly due to thecollapse of Asia and Russia, which are the two mostimportant importers of refrigerated cargo.The two hurricanesGeorge and Mitch as well as El Niño have also given rise tothis over-capacity. So far we have seen Asian demandrebound to pre-crisis levels.

The age profile of the reefer fleet indicates that the supply oftonnage will be reducedtremendously over the nextfew years, thus furtherimproving the balancebetween supply and demand.

Both these factors, theincrease in demand and thereduction in supply, areestimated to bring freightlevels back to 96-97 levels,which are considered to havebeen good years for theowners and operators ofreefer tonnage.

LHC is currently reviewing allstrategic options for thedevelopment of ourownership interest in Unicool.Olav Sollie and Roar Flom,both former members of theBona top management, havebeen given the mandate toreview and recommend astrategy for the developmentof LHC’s reefer interests inco-operation with Unicool.

The task force will seek toidentify options which willenhance revenues andUnicool’s market position.They will also address costissues as well as possiblechanges to the segmentstructure which Unicool and LHC may contribute to.

Newsmagazine for Leif Höegh & Co ASA No 1 - 2000

A new era forLHC andHUAL

Unicool

I am happy to announce that LHC has purchased allof Ugland International Holdings plc’s (UIH) carcarrier interests for USD 389,000,000, giving LHC100% control over HUAL.

The discussions about the future development of HUAL ledthe two owners to the realisation that HUAL’s continuedownership is best achieved under single ownership. Thetransaction marks the amicable termination of a 30-yearsuccessful partnership. The transaction will be completedby 31 March. However, the technical management of thevessels currently managed by UIH will remain under theirmanagement for 3 years.

This transaction is a major milestone in the history of LeifHöegh & Co ASA and marks the beginning of a period ofchange both in commercial and organisational terms. It is acompelling strategic investment in our core business at anattractive price. HUAL will represent a major part of LHC’sbusiness going forward. The HUAL partnership has been atremendous venture for both UIH and LHC, and I lookforward to continuing the growth and success of the HUALbusiness.

A year of changeI would like to welcome everybody back to the New Year.The year that was gave us many opportunities to meet newand exciting challenges in almost all of our business areas.

The completion of the Bona-Teekay merger was, perhaps,the most significant from an organisational point of view,since many of the persons in Bona left the LHC family as aresult of the merger. However, we would like to welcomethose persons from Bona who now have various new jobsin LHC.

In the latter part of 1999, we also concluded the purchaseof the remaining 50% of Unicool from Capital Finance. LHCis now, in co-operation with Unicool, in the process ofdeveloping strategies for further strengthening Unicool’sposition in the reefer segment.

The last days of 1999 and the first of 2000, proved that theextensive work done by HFS and many others throughoutthe organisation to ensure Y2K readiness was successful. Ajob well done!

Many of the markets that we operate in had downturns in1999, most notably the reefer segment. We are now seeingimprovements in the market prospects in many of ourbusiness areas leading us to expect that the Year of theDragon will prove to be as positive as Chinese astrologyindicates.

T.J. GuttormsenPresident Leif Höegh & Co ASA

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Leif Höegh & Co ASA (LHC) has reached an agreementwith Ugland International Holding plc (UIH) to acquire allof UIH’s 50% interests in the HUAL joint venture for atotal consideration of USD 390 million ( NOK 3,144million).

The purchase comprises the entire share capital of UglandAutoliners Limited (the holding company for 7 car and truckcarriers), 50% of the shares and assumption of debt of JointVessels Limited (JVL) and 50% ownership in HUAL AS notalready owned by LHC. Part of the transaction is also a time-charter arrangement for 6 years for two vessels, including apurchase obligation at the end of the period. JVL currently owns9 vessels operated by HUAL and has one vessel underconstruction for delivery end 2000.

HUAL was established in 1970 and is the world’s sixth largestprovider of transportation services for cars, trucks and otherrolling cargo. Through a fleet of owned and chartered ro/rovessels HUAL operates a global service network withheadquarters in Oslo and offices in the US, Europe, Asia and theMiddle East. In 1999, the company transported almost 1 millioncar equivalent units (c.e.u.).

The transaction is subject to UIH shareholder approval. UIH’scontrolling shareholder has given an irrevocable undertaking tovote in favour of the transaction, which is expected to becompleted by end of March 2000.

The cash portion of the acquisition is fully financed throughChristiania Bank and Den norske Bank. LHC is considering aUSD 60-70 million (NOK 490 - 560 million) rights’ issue, whichafter this investment and the investment last year in Unicool,

will provide LHC with a strong financial platform for furtherprofitable expansion within its key segments.

The historic proforma financial key figures for LHC (including 100 per cent of HUAL and Unicool, Ltd.) show the acquisition issubstantially accretive to operating earnings and cash flow(numbers in NOK million):

Westye Høegh, Chairman of LHC, says: -The acquisition bringsto a close 30 years of partnership between LHC and Uglandrelated entities. The HUAL venture has been a tremendousinvestment for both parties, and we look forward to continuingthe growth and success of the HUAL business. Furthermore,Thor Jørgen Guttormsen, President of LHC, claims: -Theacquisition is a compelling strategic investment in our corebusiness at an attractive price. The time is right for HUAL tocome under the ownership control and strategic direction of asingle owner in order to best exploit opportunities and meetchallenges ahead.


Published by: Leif Höegh & Co ASAEditorial staff: Charles Jensen, Olav Geir Foss and Mot Vandenberghe. Tel. 22 86 99 56, fax 22 86 99 45,

e-mail: [email protected] Journalist/editing: Stian Aakre, e-mail: [email protected]/graphic design: BRAVE Reklamebyrå asCirculation: 2,800

HöEGH DIALOGUE:

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LHC acquires full control of HUAL

1998 1-3Q1999Actual Proforma Actual Proforma

Revenue 3.811 6.287 2.796 4.467Operating profitbefore depreciation 864 1.393 451 750Operating Profit 651 1.009 264 444

One of the very first HUAL vessels, a former passenger ship converted at the Viktor Lenac Yard, Yugoslavia, in the early 1970’s

The new 6,000 units car carrier HUAL ASIA was named 19 January 2000 in aceremony at the Okpo Shipyard in South Korea. Sponsor of the vessel is Ane S. Viste Terjesen.

The Officers on boardHUAL ASIA, from left:Master Rodrigo JrDumaray Cabarles,Chief EngineerTeodulfo Jr LimYangco, Captain ToreHemstad, Chief OfficerManuel Noel SolloranSulibet

Naming ceremony - HUAL ASIA

The photographs by our seagoingpersonnel, which were sent in to Höegh

Dialogue photo contest 1999, have beenforwarded to the Norwegian Maritime

Directorate. Our competition caught theirattention and we recieved this invitation to

paticipiate in both the traditionalNorwegian and Nordic photo contests forseafarers. We hope that this invitation will

be an encouragement to all seafaringphotographers, and we are looking forward

to receive your efforts in the HöeghDialogue photo contest 2000.

Submit your pictures for next year’sHöegh Dialogue competition by

September 2000.


Photo & video contest 2000

In this coloumn we intend to let the readers speak freely their opinions.(Opinions may be edited due to shortage of column space.) OP! N! ONS

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Comparative fuel consumption

The Green EffortShort Sea Shipping

Source: Samferdsel 3/4 1989, Miljøboka 1990

In recent years we have seen an increased focus on short sea shipping. Especially the European Commission isputting a lot of effort into promoting this option and elucidating efficiency, costs and competitiveness.Environmental issues such as air emissions, infrastructure development and safety are all incentives advocatingshort sea shipping wherever applicable. Höegh Dialogue met with Helle Hammer and Lars Almklov in NorwegianShipowners’ Association to enlighten different aspects of the matter.

-I gather that the reason for the European Commission’s focus is twofold, Lars Almklov explains. -First of all the promotion of shortsea shipping is based on their obligation to the Kyoto-treaty, through which they have to reduce CO -emissions with 8% by the year2010. It is also based on the fact that the European infrastructure for shorebased transport is already heavily overloaded.

In addition to this, short sea shipping needs an improvedimage many places. Rough cargo handling, low frequency andpoor flexibility together with unwilling agents are all factorsheld against the trade. However, we can see that the focus onshort sea shipping is helping; there has been a steady increasein tonnage since 1990.

-Environmental benefits of short sea shipping can be brieflysummarized in the following four points: air emissions, noise,land use and safety, Helle Hammer informs us. -On airemissions, there is significant documentation showing that shipfreight consumes less energy per transported ton than both railand road freight. On the macroscopic account, short seashipping also requires less energy consumption for developingthe required infrastructure in order to function properly. Noiseis not a problem at all with sea freight, except for loading andunloading facilities. Land use also speaks clearly in favour ofshipping. Calculations show that seaborne freight accounts foronly 1% of the total land use of air, rail, road and sea transportput together. Safety is of course a matter by itself, butreduction of hazardous tonnage through populated areas aswell as substantial reduction of risk for accidents, canrepresent two major improvement potentials for the use ofshort sea shipping.

Lars Almklov explains further about the challenges he seeslying ahead for short sea shipping promotors: -The mostcomplex task will be to get reliable calculations for comparingtransport alternatives. I beleive this still lies years ahead. Alsomore institutional changes will be required, particularly fromthe authorities. Harbour management needs to be liberalizedtowards cheaper and more efficiant terminals. More researchon standardized containers and information handling will alsobe crucial for smooth short sea shipping performance.

-To be competitive in future markets, door to door transportmust be offered to the customers. Short sea shipping must becombined with other modes of transportation in order toprovide this service. Intermodal transportation is hence anotion in rapid development. I think these demands can lead tonew and interesting service partner constellations in the future,and short sea shippers must lead on in this development.

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Semitrailer 41 20 Lorry, 8 tons and upwards 50 20 Small vessel, 500 grt or below 18 3Barge transport 7 3Rail transport 25 20

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Source: UK Department of Transport

Energy efficiency (Litres oil equivalents Energy for per 1000 tons/km) conveyance

Energy forinfrastrukture

Consultant Peter Cowdell of MSS (Marine SafetyServices Ltd) had one clear objective in mind whenboarding HUAL TRANSITA in Suez on 7 Oct. 1999: tosize up the safety standards onboard the ship and liftthese standards through a week of intensive trainingprogram involving every officer and crew member. Thiswas not his first HFS ship. He and his colleagues hadalready visited 29 vessels, and are aiming at coveringthe whole fleet by the end of 1999 (schedulespermitting).

The program is a result of HFS` determination to lift the safetyawareness and to fight emergencies after the difficult year 1998when the fleet had too many incidents resulting in a total loss ofa ship as well as fires, collision and grounding resulting in costlyrepairs and off hire. However, worst of all is the exposure ofpersonnel which may lead to the loss of their lives. All aconsequence of neglect and too little awareness of hazardouspractices regarding fire prevention and -fighting, safe navigation,enclosed spaces, life saving and survival.

The MSS program comes on topof a shore based training and asafety program held on all theofficers’ confrence through 1999.

When Peter Cowdell disembarked HUAL TRANSITA nine dayslater, he was satisfied with what was achieved. Captian Gulliaband his crew had shown an active interest, given moresatisfactory answers in the written examinations, as well asshown significant improvements in emergency handling to a levelwhich hopefully will make them able to prevent and fight anyemergency.

Now it is important that the momemtum of training is kept upthrough regular and comprehensive drills conducted by theship`s officers on a regular basis and that every man on boardalways is prepared for the unexpected.

Olav Geir Foss

Safety training on board


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Chairman HFS


As from 1 Oct. 1999, Stig Otto Forsberg isretired, and Captain John S. Vestby is thenew Head of Department. It is recognisedthroughout the organisation that Forsberghas done an excellent job in improving safetyand quality in LHC. John S. Vestby is alsohumbly facing the continuation of this work.

-We will do our utmost to carry on in thesame direction, Vestby says. -Of majorprojects on our desks is the work with HFStowards ISO 14001. We want to continue theMSS-projects onboard the vessels, but thistime supervised by our own people. And lastbut not least we will conclude the ISM-certifications. The last vessel is due certifiedultimo January 2000. And of course wewould like to continue our safety-columns inHöegh Dialogue, John S. Vestby concludes.

Vestby joined LHC back in 1968, and sailedcontinuously for almost 30 years, from 1981as captain. He went on shore in 1997 towork in the office in Oslo.

New Head of Safety and QualityDepartment

MSS Consultant PeterCowdell instructing thecrew on board HUALTRANSITA. 7


Gorthon Lines, located in Helsingborg, Sweden, wasfounded back in 1915 when Johan Esbjörn Gorthontogether with his father-in-law and brother-in-lawestablished Active Shipping Company. The companyremained a family business for decades until StigGorthon passed away in 1988 and the company wassold. Throughout the years Gorthon Lines has beeninvolved in a wide range of trades. But in 1972 it wasdecided to concentrate on one single trade, and from1978 they have exclusively transported forest products.To this day Gorthon Lines is a major competitor on thepaper transport market

This niche strategy has proved very efficient, and Gorthon Linesis today a sound shipping company with good prospects for thefuture. Because of this, Leif Höegh & Co has gained interest inthe company, and LHC has today almost 50 % of the votes and26 % of the share capital in the company. Since April 1999,LHCexecutives Thor Jørgen Guttormsen is Chairman, while Øyvin A.Brøymer and Erik Falkenberg are members of the Board. Anotherlink between the two companies, although more of a curiosity, isthe fact that in 1988 Gorthon was sold to Bilspedition, who atthat time also owned Cool Carriers and Transatlantic.

The company and the fleetGorthon Lines of 2000 is run by an administration of 16 people in Helsingborg. The company owns 50% of Seapartner inGothenburg which mans and manages the vessels. Seapartneralso provides superintendents to the technical operation of thefleet and educates seagoing personnel. The fleet consists of 16vessels, which are operated on three different contract types. 4 of the vessels are specially designed and time-chartered toSCA Transforest AB and MoDo AB in Sweden, the remainder

of the fleet is used for Requirement Freight Contracts andContracts Of Affreightment.

All the vessels are adjusted to the task of transporting paper.This is in many ways a fragile cargo and requires properhandling. The vessels have square cargo holds without sharpedges, good ventilation, and forklifts run by cable power to avoidemissions. And of course: all ships are classified in Ice Class 1A- ice conditions can be rough both in the Baltic Sea and inCanada which are important waters for Gorthon Lines.

Survival!-Being a shipping company of the size we are, requiressignificant internal competence, President Lars Peterssonexplains. -We have a small administration, and we have a flatand open structure in the office. Everybody knows somethingabout the main picture in addition to their own specific expertise.I believe this results in a very dynamic and flexible organisation.At the same time we must also make sure we have the size to bestrong enough in the market to keep our identity and position. Ifone becomes too small, the danger of being devoured will beimminent. In this context I have to say we look forward to thesynergy we can gain from co-operation with LHC and e.g. theiranalysts, Petersson continues.

-Gorthon Lines further believes in long term relations with ourclients, Lars Petersson says. -The form of contracting we preferencourages us to know our clients well, to be familiar with theirobjectives; we even go into their production schemes to be ableto provide the best service possible. "Cargo generates cargo"are words we live by. We also see that the shipping industry ischanging along with whatever the shipping companies believe tobe lucrative.Presently wemeet manynewcompetitors in the papermarket, and we hope ourinsider-position with our clientswill give us acompetitiveedge in theyears to come.

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Gorthon Lines


Gorthon facts• Founded 1915, corporate headquarters in Helsingborg, Sweden • 16 vessels, all Ice Class 1A, transports mainly paper • Currently planning two 14,000 tons RO-RO newbuildings• Canada is presently the center of production for Gorthon's

cargo

• Main routes: - Scandinavia to Europe mainland and UK- Europe to Canada and USA - Canada to Europe - Canada to USA- A new market from Canada to Venezuela and the Caribbean

Making it all work out…Kenny Pettersson is a key person in Gorthon Lines. He has beenwith the company for 20 years, and is in charge of clientrelations, cargo management and logistics. -Well, this can be a rather intense task with the flexibility we try to maintaintowards all our customers, he says. -We want to give ourcustomers what they need, with respect to both timing andcapacity, and for our own good, we want to operate with as fullyloaded vessels as possible, and with as few loading andunloading operations as possible. The main parameters we haveto deal with in order to achieve this are: changes in quantities,changes in port calls, changes in timing, and then unforeseeninternal changes arise now and then. Again I think our strongestside in this puzzle is our long term relations with our clients. Thefact that we can complete any mission to their satisfaction,builds trust and confidence, Kenny Pettersson concludes.

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Aluminium from NorwayGorthon Lines has together with Sea-Trans in Bergen,Norway, established the company Streamline to execute a contract signed with Norsk Hydro. Aluminium will betransported from Norsk Hydro's plants in Karmøy,Sunndalsøra and Husnes to Europe mainland and the UK.On the way back, they will carry carbon electrodes andgeneral cargo to Bergen, Trondheim and other ports asneeded. Two vessels are presently being upgraded and fitted to this new operation. This co-operation is interestingalso because Sea-Trans is already transporting forestproducts on their own, so possible synergy in this field isevident.

President Lars Petersson in his office overlooking the harbour.


With more than 300 million tonscargo throughput in 1999, the Portof Rotterdam is by far the largestport in the world. In a few articles inHöegh Dialogue this year we willpresent some aspects of this majorshipping nodal point. Throughcenturies Rotterdam has been a portcity. The geographical location closeto the center of Europe, the inlandconnections by river and roads, thedeep waters in the North Sea -everything has helped develop Portof Rotterdam to the present size andlogistic significance.

And the development is actually strongertoday than ever. New terminals,environment, safety, maintenance are allunder constant development andconsideration by the port authorities. P.t.these authorities have also stated foursectors in which they will concentratespecial efforts in further development.These are: fruit, chemicals, containers,and the distriparkconcept.

In a port of this size there will be a majorpotential for spin-offs and synergypossibilities. Already inside the portboundaries there are five major oilrefineries, more than 20 large chemicalprocessing plants have been developedbased on the infrastructure possibilities in

the port area. Another business hasdeveloped rapidly lately: storage of

empty containers. In several terminalsthroughout the Port of Rotterdam, youcan see high piles of these emptycontainers. Blending coal is yet anotherderived business that is developing in thearea. The port has actually reached a sizethat also makes tourism more and moreinteresting. A magnitude of guided tours,a press center, a multi-media show arealready results of this growing business.

The Distripark Concept

The Port of Rotterdam has developed itsDistripark concept in anticipation ofdevelopments in international trade. It isthe answer to the growing need ofshipping companies and logistic serviceproviders for just-in-time delivery at lowercost. Distriparks are logistic parks withextensive facilities to the hinterland andEuropean destinations overseas. Theparks have the most modern informationand communication technologyequipment. The Distriparks provide spacefor warehousing and forwarding facilitiesused for the storage and onwardtransport of cargo, and for the stuffing &stripping of containers. Goods can beadapted here to the wishes of thecustomer and the requirements of thecountry of destination. This added valuecan consist of repacking, labelling,weighing, assembling, quality controlling,just-in-time distribution, customsclearance etc. Three Distriparks havebeen set up in the port area, each withspecific charachteristics to meet theneeds of the companies established there.

Maasvlakte

The Western part of the port is calledMaasvlakte. It is here the port authoritiesare planning the next expansion of theport are by filling in the shallow areaswestwards from the existing shoreline.But already today Maasvlakte is a welldeveloped area housing i.a. EuropeanCombined Terminals (ECT) being thelargest container company in Rotterdam,the largest crude oil storage in the world:Maasvlakte Oile Terminal with a totalstorage capacity of 4.2 million m3, and notat least the newly developed MaasvlakteDistripark.

High-tech improves logistics and safety

Improving safety and enhancingadministration procedures are crucialtasks in developing a smooth portoperation in spite of the complexity of thePort of Rotterdam. The port has its ownIT-department, which has developed thecomputerized traffic control system. Thissystem makes sure all ship arrivals anddepartures are safe and efficient, and iscontrolled from one central and threetraffic control towers throughout the port.From this system the port can deriveinformation on traffic flow on differentquays in order to prevent traffic jams, andthey derive information needed for thecentralised port fee system. Another high-tech example is the ECT containerterminal, where automated cranes andcomputerised, driverless lorries handlecontainers with a minimum of humanintervention.

Port of Rotterdam -

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Kristin HaugenLub oil, Gas, chemicals and

welding, Forwarding

Port of Rotterdam - Facts

Total cargo throughput: 314 million tons Dry bulk throughput: 90 million tonsLiquid bulk throughput: 144 million tonsGeneral cargo throughput: 81 million tonsVessel arrivals: 250,000Total quay length: 77 kilometersTotal port related employment: 60,500 peoplePort authority employment: 1,130 peopleForwarding agent companies: 272Warehousing and distribution companies: 200

The Gateway to Europe

Incoming and outgoing cargo The Port of Rotterdam


Stein Eriksen

Manager

Kai Ertsland (KHE)

Superintendents

Höegh Minerva/MirandaSaga Challenger/Höegh Morus

Ole J. Rolland (OJR) Höegh Marlin/MascotHöegh Merit/Merchant/Musketeer

Trym O. Sjølie (TOS)

JonE.Thurmann (JOT) Hual Tracer/TrapperHual Traveller/Trotter

Hual TransitaHual Tribute/Hual Trident/Trooper

Vegard Hellekleiv (VEH) Höegh Marlin/MascotHöegh Merit/Merchant/Musketeer

Svein Ausland (SVA) Hual TransporterHual Trader/Carib Star

Karl Helge Røyter

Manager

Ole Fjærgård (OLF)

Superintendents

Crystal Pride/PrincePrivilege/Primadonna

Svein Pedersen (SVP) Ivory Dawn/Spring BrideSummer Flower

Jan Toth (JAT)

Nils B. Reite (NBR) Jedforest/LauderdaleRickmers Tianjin/Houston

Summer WindMeadow/Breeze

Roar Habberstad (RRH) Norman LadyHöegh Gandria

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GROUP 1 - AUTO LINERS/OPEN HATCH

GROUP 2 - REEFERS/BULK/LINER/GAS

The Superintendent plays a very important role in the shipmanagement operation. He is the first contact in all matters,bridging the gap between the vessel and the organisationashore.

He is the one who has to be available at any time to answerquestions, to give advice and to solve problems, large andsmall alike. The Superintendent is acting on behalf of theFleet Manager, and has in this capacity been givenresponsibility and authority in accordance with theSuperintendent function plan.

The Superintendent has the full responsibility for the vesselin all ship management matters, he supervises the vessel interms of technical standard and maintenance costmanagement, purchasing of spares and consumables.

The Superintendent must be familiar with the condition of thevessel:- he must know the technical situation with respect to

repairs and maintenance.- he must know the situation about the Flag-State and

Classification matters.- he is responsible for the manning of the vessel, ensuring

that the vessel at all time is adequately manned in number and quality of officers and ratings.

- he is responsible for safety matters relating to technical operation, and that general safety awareness onboard is in accordance with the company standard.

- he is responsible that all requirements laid down in the Onboard Quality Assurance System / Ship Management System, ISM and STCW and other national and international requirements are adhered to onboard at all time.

To be able to carry out these tasks, the Superintendent mustvisit the vessel on a regular basis to monitor the complianceto regulations and the technical situation onboard. It is veryimportant for him to get acquainted with the crew on board,in order to give them all necessary support and help.TheSuperintendent should make the effort to create the bestpossible human understanding, and to ensure good results inall ship management matters.

Superintendents

Karl Helge Røyter

Bernhard Næss (BEN) Höegh Mistral/Mystic LadyAuto (Hual) Champ

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Ole Fjærgård has been in LHC since 1968, and is hence one ofthe senior superintendents in the company. He finds the jobvery interesting and rewarding in spite - or maybe because -the intensity and complexity of the superintendents job. Healso adds that times are changing in their trade, and manychanges have improved their everyday life. Especially the newcommunication technology allows the superintendents to be offar better assistance to the vessels than in earlier days.

-Not long ago we wrote a telex message by hand, we had a secretarytype it, then it came back for proof reading, and finally it was forwardedto the text-center for transmitting, Ole Fjærgård recalls. -Now we havelaptop computers and mobile telephones enabling us to reach the shipsfrom anywhere by e-mail. Actually, the current e-mail system works verywell, and almost all communication is now via PC. The reportingschedules to and from the vessels are also done by e-mail. This has ledto far less paper flow between land and sea - but of course it requiresimproved computer knowledge and skills from both parties.

-Another matter that has improved significantly over the past few yearsis the manning situation, Fjærgård continues. -We have seen newnationalities among our sailors, and there has been a steady flow of newnames and people for us to relate to. But recently, and especially sincethe establishment of the HFS-Philippines office, crews are much morestable. This is a great help to the superintendents.

Travelling is of course a key activity in the life of a superintendent. They have to be ready to go on short notice when something goeswrong, although most of the time everything runs smoothly. Thesuperintendents also try to join the vessel for a shorter crossing eachyear.

-Sum this up, and you cross quite a few time zones in a year, Fjærgårdsays, recalling every time they have to work without settling down fromjet-lag, having day and night all mixed up.

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CRYSTAL PRIDE had a minor accident inTurkey towards the end of 1999. The bowwas damaged when hitting the quay.

The damage was temporarily repaired inTurkey in order to keep the schedual.

Later the damage was permanently repairedin a shipyard.

A non-scheduled superintendent task:

Superintendent OleFjærgård way backin his ChiefEngineering days

Visit from HFS Philippines


LHC in Oslo has in the period 16 - 20 January 2000 had the pleasure of welcoming 7 employees from HFS-Philippines.

The visit is part of a development program designedto introduce all 27 employees in Manila to our companyculture and identity. Everyone of the Manila staff who hasnot yet been to Norway will be offered this trip.According to the first delegation Höegh Dialogue metwith, this is a success, and all participants enjoyed theintroduction to both Norwegian- and company-culture.

From left front: Rhinna Carmencita Miranda, Maria Victora Antisoda, Jessica Villand.From left back: Danilo Duero, Jesus Belgrado, Rosana Alvaniz, Lorenzo Somosot, Terje Lorentzen

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Officers` Conference

From left: Johannes Tvedte, Dante Zenarosa, Romeo Dionio,Ronaldo Calinawan, Dionisio Jonos, Eleuterio Lumocso and

Sebjørn Dahl.

The officers’ conference 9903 was conducted 8-12November at Holiday Inn, Clarkfield, Pampanga. A 2 hourdrive North of Manila. Around 35 senior officers attendedthe 5-day conference. In addition around 20 wives joinedthe officers for a-day-and-a-half program.

Teambuilding, leadership and crisis management was thetheme for the conference. An informal team buildingactivity set the correct atmosphere for the conference.

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A continuing focus on improvement of leadership and crisismanagement filled the following two days for the seniors.

Bergen Hull Club representatives guided a group of officersin a role-play emergency drill where several aspects of crisis

management were addressed

The conference was finalised with an official dinner andpresentation of awards for more than 5 years

of service with HFS. ▼


Wold economy andworld tradeThe outlook for world economicgrowth has improved over the pastfew months and is now forecast togrow by 3.4% this year, comparedwith the 2.8% growth experienced in1999. Some shipping markets couldsuffer a slowdown during the firstmonths of the year, however, as thevarious Y2K inventories are drawn.

The Car Carrier MarketGlobal light vehicle sales reached 55 mill.units in 1999, a 5.9% increase from theprevious year. The yen strengthenedduring the year and Japanese exports fellslightly, whereas Korean exportsincreased. Preliminary data indicate thatworldwide shipments of vehicles incl. high& heavy rolling stock in 1999 remained ataround the previous year’s level.

A total of 28 new PCCs were deliveredduring 1999 and a further 32 new vesselsare scheduled for delivery this year. Oldervessels having received their redeliverynotices and now seeking new employmentcould have difficulties in securingemployment. A 1974-built PCC was soldfor demolition in December 1999.

The Reefer Market

During the low season in the summer of1999 a record number of reefer vesselswere laid up. In addition, increasedscrapping of old and inefficient vessels ledto a 2% annual decline in the specialisedreefer vessel fleet.

By early autumn the activities in thevarious reefer trades picked up, leading toan improvement in spot rate levels. Due tocontinued excess capacity, however, therewas no improvement in the 12 months’timecharter market.

The competition from containerships withreefer capacity in several of the traditionalreefer trades is still intense, but the currentimprovement in the containership marketcould alleviate this situation somewhat.

The Liner/Open Hatch MarketThe demand for multipurpose liner vesselspicked up in 1999, especially in the intra-Asian market, which is a major employer ofthese vessels. In addition, the recovery inthe Asian economies brought an increasein import volumes into this region fromEurope and the USA. The imbalance inthese trades is continuing, however, as USimport growth is still surpassing exportgrowth.

In the second half of the year the openhatch bulk carrier market enjoyed arecovery in the global trade in severalminor bulk commodities, especially inagribulks, steel products and forestproducts. Pricing of pulp and papercontinued to strengthen, buoyed by lowglobal inventories. However, there is stillsome excess capacity in the open hatchbulk carrier fleet and the improvement inthe fleet capacity utilization rate in thissegment was therefore more modest thanin the conventional handysize/handymaxfleet.

The forestry industry will benefit from theimproved economic outlook both for Asia,Latin America and Europe in 2000.

The LNG Market

The LNG trade enjoyed a significantexpansion in 1999 when several newsupply projects came on stream, such asshipments from Trinidad, Nigeria and newtrains in Qatar.

The quantity of LNG sold as spot cargoesor on short-term contracts also increasedin 1999, particularly in the US market.These cargoes originated in Qatar,Australia, Malaysia and Abu Dhabi.

The Dry Bulk Market

The economic recovery in the Asianmarkets was the key factor behind theturnaround in the dry bulk market in 1999.Steel production in the region increasedagain, which led to a strong growth in rawmaterial imports. In particular, iron oreimports into China and Korea rosesubstantially. The Asian recovery led alsoto increased steel imports into the regionfrom Japan. Combined with a modestincrease in domestic demand, this led to arebound in Japanese steel production.European steel production recovered inthe third quarter of the year. There wasalso a large increase in Japanese andAsian steam coal imports in 1999 and theglobal grain trade increased again after1998's decline.

All the major dry bulk trades are projectedto show solid growth in 2000. The numberof newbuildings scheduled for delivery isquite large, however, and the fleetutilization rate is therefore likely to risemodestly in 2000.

The Tanker Market

Crude oil tanker demand fell by more than3% in 1999, due to a substantial decline inboth long-haul and short-haul crude oilexports. OPEC’s decision to cut outputhas resulted in a large stockdraw of globaloil inventories, which at year-end wereapproaching their 1996 lows used as abarometer by many in OPEC.

The depressed freight market and highbunker prices during most of the yearencouraged owners of older tankertonnage to take the demolition option. 36VLCCs were scrapped in 1999, and oneunit was converted to an FPSO. 27Aframaxes and 24 Suezmaxes were soldfor demolition. Despite a large number ofnewbuildings, the growth in the tanker fleetwas thus limited to 1.2% in 1999. Theactivities in the tanker market picked uptowards the end of 1999. A recovery in2000 depends to a large extent on OPEC’sstrategy.

By Mona Boug Kristiansen

Market outlook

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HFS Fleet personnel on Board 20 January 2000


VESSEL MASTER CHIEF MATE CHIEF ENGINEERRICKMERS HOUSTON PATILANO, DOUGLAS ARANETA ESTOLAS, BENJAMIN MABUTAS HUFALAR, CARLITO OFIAZARICKMERS TIANJIN SORIANO, FRANCO LAPIDARIO TAGHAP, HERMENEGILDO JR. BET MASOCOL, EDWIN DENUMHÖEGH MARLIN BOLOTAOLO, ALEJANDRO ESTANO FERNANDEZ, FERDINAND MANALO DIAZ, THOMAS FRENCHMASCOT LUMA-AD, PIPO UY BERTUMEN, ROGELIO ROSTROLLO VENTULA, REYNALDO GANIRONHÖEGH MINERVA AMANO, AUTONOMO ABELLAR ASTILLO, FELIX LUENGO BATAC, VIRGILIO DAVIDHÖEGH MINERVA SOLATORIO, FRANCISCO JR JUANERHÖEGH MIRANDA SABADO, ALFREDO RIMANDO CAÑETE, ALBERT MENDOZA ARAGOZA, CRISOSTOMO ASPERHÖEGH MERCHANT AGUILA, ALBERTO BRIONES NEAR , EDUARDO JR VALLE RABARIA, PERICLES JR MALBASHÖEGH MERIT SIBYA, RAFAEL DIANSEN FLORESCA, LUCINO TIU ALEGRADO, SOCRATES REGIDORHÖEGH MERIT PALACA, FILOMENO JR. IDULSA TERAZONA, FRANK PENAFIELHÖEGH MUSKETEER AGMATA, RUBEN BALBUENA TUICO, DANILO T CRISTINO, MANUELO BERDOSHÖEGH MISTRAL DAROY, ADOLFO SUEZO. SY, RENATO JR PIOL PATUNGAN, ALFREDO BOQUIRINHÖEGH MISTRAL SEDONIO, JOEBERT VILLACENDASAGA CHALLENGER GALVE, ISMAEL SELAUSO BONDOC, BENITO PANGAN OCBINA, ISAGANI JALLORINAHÖEGH MORUS NAZ, ELMER DE JESUS ENGCOY, ETCHEL PEREZ PAGULAYAN, REYMUNDO BANGAYANHUAL ASIA CABARLES, RODRIGO JR DUMARAYHUAL TRACER ESPARTERO, VICENTE SR MAGTULIS CABALLES, RAYMUNDO MAGHANOY OZARAGA, MARIO GOMEZHUAL TRADER MANALAYSAY, CESAR DUQUE ROMERO, ARNALDO BUSTALINO NAPILOT, GILBERTO LARGAHUAL TRAPPER MANGOHIG, QUINTIN ABANGAN AGONIAS, ANTONIO MARANTAN SANTIAGO, ARNEL SR DEL VALLEHUAL TRANSITA LORENZO, JESSIE MAGDAUG CONCEPCION, ROLANDO VALEROSO CIRERA, LEOPOLDO AGPAWAHUAL TRANSPORTER LACSON, PACIFICO JR. DAGUIA NIEDO, JULIUS VINCA LALIM, CONRADO WONGHUAL TRAVELLER LICUDAN, EUSEBIO JULATON CLEMENTE, WILFREDO JAVIER NIEDO, ARCELIO JR VINCAHUAL TRIBUTE PILAPIL, ALBERTO SANORIA RIEGO, ANACLETO ROLLE YORO, RAMONITO JABASAHUAL TROTTER RIVERA, JORGE PARACEJAS JOSE, EDGARDO ABRIGO LEDESMA, RAMON JR P.HUAL TRIDENT SOMOSOT JEREMIAS C RIEGO, ANACLETO ROLLE CARAPATAN, ROLANDO SR. BATINHUAL TROOPER JONOS, DIONISIO COMPANERO GABAYNE, JOSEPH COLLADO CRUDO, RENATO ALARCONCARIB STAR SATIADA, ROBERTO CRUZ NGILAY, JIMMY MUSA MORALINA, ROMEO QUIROZAUTO CHAMP DELIARTE, BENITO ARROJADO REYES, JOSELITO DOLAR MAIQUEZ, MARIO ALVAROAUTO CHAMP ENCLONA , MARIO JR AGAOIVORY DAWN TORRES, ROBERTO OMPOC ARCAY, VERONICO FUDOTAN ROBIN, ALEXANDER SANCHEZIVORY DAWN ROLLO, EDGARDO OQUIZCRYSTAL PRIDE TAN, BERNARDO DIAMANTE ISULAT, LAURO JR MIRAN CHING, CHARLES BADONGCRYSTAL PRIMADONNA PALCES , NEFTALI JR CORRO CORTES, KIM PADOR GUIBONE, ILDEFONSO MAGHUYOPCRYSTAL PRINCE STA CRUZ, LUISITO ARGARI DEMEGILLO, BENHUR ABERDE PASADILLA, DIONE PELEGRINOCRYSTAL PRIVILEGE PARAGUYA, MIGUEL SILVA CATUBIG, ISMAEL ALBERT TIU UMEREZ, GABRIEL VILISANOSPRING BRIDE CORNELIO JR, ANANIAS CAGATIN PUNAY, FERNANDO MONTERDE CARPIO, EDWIN DOMINGOSUMMER BREEZE MISA, RICARDO DIAZ TENA, RADITO SURA BELTRAN, ALBERTO GOCOTANOSUMMER FLOWER HARE, JESSEL CALDEA BATAYOLA, JESSIE NECESARIO ABARINTOS JR, ALIPIO DOLORSUMMER MEADOW ALIVIADO, DANILO POBLETE BATOON, ELMER MARTILLANOSUMMER WIND MASNAYON, WILLARD PUNO PASAPORTE, HARLEY ZAYCO RABANG, EDGARDO GABOSUMMER WIN DEQUITO, GENEROSO PALOMO CATOLICO, ELY CIERVOJEDFOREST NG, CHOR KUEN CHIN, MAN CHEUNG WONG, HO YINLAUDERDALE YEUNG, HOK MING CHIU, AH HOI CHAU, WAN HINGHÔEGH GANDRIA HANSEN, LEIF STEINAR SPARRE KNUDSEN, SIMEN PAULSEN, TARJEINORMAN LADY SANDIK, INGE GRØTTING, KÅRE TORP, JOHNYMYSTIC LADY HANSEN, ØIVIND HANSEN, ROY

The GalleryPhotos from life at sea

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