APM takeover gets competition board green light

Dalgaard speaks out on implications for staff RAY SMUTS DANISH SHIPPING company A.P Møller-Maersk is about to rocket from the starting blocks after the South African competition tribunal last week granted it the right to take over P&O Nedlloyd, thereby finally clearing the way for a new, forceful ocean carrier, Maersk Line. As was to be anticipated, the South African tribunal ruled that the deal could proceed provided P&O Nedlloyd divest itself (as of the end of February, 2006) of total participation in the service between South Africa and UK/Northwest Continent (SAECS), currently shared by Maersk Sealand, Safmarine, P&O Nedlloyd and Deutsche Afrika-Linien (DAL). Flemming Dalgaard, MD of Maersk Sealand in South Africa, tells FTW the South African competition authorities stipulated other pre-conditions, the first related to a smaller trade between Maersk Sealand and P&O Nedlloyd which he is not inclined to discuss at this stage. The other is related to the integration of the P&O staff complement. “We are very pleased with the ruling and hope the blending of Maersk Sealand and P&O Nedlloyd will hold great benefits for our customers, our staff and, of course, for South Africa,” says a clearly pleased Dalgaard. Now begins the serious business of bringing together the two staff complements, some 1 500 people in total. Job losses AP Moller-Maersk has estimated about 5% of global staff will lose their jobs as a result of the merger but Dalgaard is not yet in a position to elucidate on the South African outcome. “Our main aim is no job losses but some will be tantamount to duplication so we will just have to wait and see.” An important question; what happens in the case of two MDs, himself and P&O Nedlloyd’s Bert Muys? Dalgaard responds matter-of-factly: “For every employee, from the top to bottom, it will be a case of the best person for the job and that review will be done soon. It might not even be Bert or myself for this job.” Given the much larger workforce, Maersk Line will vacate its offices in Safmarine House, Cape Town, to take over four floors at the new BOE building on the Victoria and Alfred Waterfront from March 2006. One of the most intriguing aspects of P&O Nedlloyd’s divestiture from SAECS (it holds a 30% stake in the service) is who will take up the reins and at what cost? No one is saying who or how much but this correspondent is aware of several carriers - one source has it at more than 20 - who may (or have already) knocked at the door, including MSC, CMA CGM and DAL (which already holds a 16% stake in SAECS). P&O newbuilds The two new Safmarine containerships in SAECS are wholly owned as are the one apiece from Maersk Sealand and Deutsche Afrika-Linien (DAL) but the P&O Nedlloyd newbuilds are on long-term charter. Dalgaard says whoever acquires the P&O Nedlloyd SAECS stake will have the right to buy those charters, a number of containers and so forth. He points to a misconception many fail to comprehend, that the P&O Nedlloyd stake does not amount to 30% of market share between South Africa and Europe but rather 30% of SAECS itself. It’s interesting to note that a number of former P&O Nedlloyd executives have found their way into top positions in the new Maersk Line set-up. These include Nigel Pusey, former MD for P&O Nedlloyd in South Africa, who assumes responsibility for eight of the group’s 17 areas, including the Middle East, Oceania and the Eastern Mediterranean. Flemming Dalgaard … ‘For every employee, from the top to bottom, it will be a case of the best person for the job and that review will be done soon.’ “The results of the performance measurement of the WB-TKC were benchmarked against both the Durban and Port Elizabeth corridors to obtain an understanding of the potential benefits of the WB-TKC for the automotive industry,” said Viljoen.