Erria A/S is a Denmark-listed conglomerate involved in Shipping, Offshore & Logistic worldwide. Erria was founded in 1992 and the Company’s objective is to gain extensive expertise in niche areas and through this to obtain a favorable market position.
Repaying debt has long been a high priority at Erria, which back in 2011 was close to bankruptcy with large debts. Erria sold all 17 ships, and initiated a major turnaround, and repaid debt of about 1.1 billion leaving Erria with a debt of only 4 mio. today.
The company utilized the practical experience to handle many of the functions that maritime companies have chosen to outsource to third parties which include blue chip customers like Maersk Line, Orsted, SiemensGamesa, Vestas, Alcatel, Amazon, Noble Corporation & Vestas.
Today, Erria (Listed on Nasdaq Copenhagen) runs a healthy business been involved in shipping, offshore and logistic activities and Erria has adjusted its expectations upowards 4 times in 2022.
Erria is looking at further acquisitions, like the one they did with Cathay Seal Ltd. Earlier this year which was acquired with a nice double-digit million turnover and black numbers. In addition, Erria is looking towards the offshore wind segment, where the company is working to identify the most profitable step into the market, primarily in Asia.
Mr. Henrik Andersen, the company’s CEO shared with EUROPEAN BUSINESS his insights in a recent interview.
EUROPEAN BUSINESS: Erria is no doubt a conglomerate with a strong portfolio of businesses. We learnt Erria faced very serious situation during the financial crisis and went from heavily invested in ships to become asset light, tell us how you achieve a successful transformation?
Henrik Andersen: We sold our 7 ships and reduced our debt. That left us with a negative equity and a bank that promised to support the day-to-day operations but wouldn’t lend us money.
Our asset-light model works and makes us cost-effective, agile and flexible, and we are marginally affected by inflation and the energy crisis.
During recent years we have succeeded in buying 3 companies in Singapore & Vietnam and we now have a turnover of more than 140 million through fixed and long-term contracts and have stable customer relationships that extend over many years.
EUROPEAN BUSINESS: Erria is a European company with strong roots in north Europe, please tell us your outlook of the international market, in which markets do you see the greatest potential for Erria?
Henrik Andersen: In June, Erria won the company’s largest ever contract with the Danish wind energy company Orsted. The contract sum is estimated at approx. 450 million over a 5-year period and includes the transport of wood chips, wood pellets and other dry bulk to Power Plants in north Europe.
Due to the energy crises the activity has been greater than expected, which contributes to the upward adjustment of the company’s expectations for earnings in 2022.
One of Erria’s competencies is relocation of drilling rigs and the need for oil and gas will remain for many years to come. It is Erria’s ambition to contribute to ensuring that the oil is extracted as sustainably as possible by contributing to significant reductions in costs, time consumption and CO2 emissions.
Our Vietnamese companies (Erria Container Services & Mermaid Maritime Vietnam) benefits from the fact that Vietnam is back from Covid-19 with growth rates of 8% and inflation of less than 4%. Vietnam’s growth comes, among other things, due to the harsh and inflexible shutdowns in China. Companies’ productions are moving to Vietnam and a lot of global traffic now goes through Vietnamese ports, which benefits both ECS & Mermaid. We have been part of that growth journey and are now profiting from the early entry.
EUROPEAN BUSINESS: In Europe, we are facing inflation and the energy crisis, can you share some insights about the business outlook in Europe and international markets? What is the potential impact of the energy crises, inflation, or the war in Ukraine on your business?
Henrik Andersen: We have managed to create an international conglomerate which is not affected by either inflation, war or the energy crisis, on the contrary.
The need for our European services including internet, offshore wind and oil & gas will grow in the coming years. The same applies for South East Asia, where 29% of the world’s growing population resides and which faces a fantastic growth journey in the coming years.
EUROPEAN BUSINESS: We know you have many blue chip customers, tell us more about your expertise, the customers you serve and how do you add value for your customers?
Henrik Andersen: We add value by saving significant costs and by providing high quality and cost-effective services and avoiding accidents and injuries.
We have managed to grow the business by focusing on niche markets as well as diversifying our products and services:
- We have used our skills from been a shipowner to offer similar services to niche markets such as delivering qualified specialists to companies like Alcatel & Amazon laying internet cables at the seabed.
- We have focused on new market segments with similar needs and characteristics as our existing customers. Among other things, we have managed to offer our services from the Oil & Gas sector into renewables/Offshore wind servicing customers like Orsted, Vestas & SiemensGamesa.
EUROPEAN BUSINESS: Henrik, tell us about yourself, your personal experience and more about your role at Erria …what’s a typical day at work like? What sort of leadership and management style do you use to lead these companies within the conglomerate?
Henrik Andersen: I am educated Captain and had a sailing career in the Danish navy and the shipping company Maersk before I went ashore to do Quality & Human Resources. In 2003, I became a director and got the opportunity to establish the first foreign shipping company in Vietnam, which laid the foundation for the activities we have in Vietnam today, where we employ more than 200 people.
In 2005 I was offered the position of CEO in Erria and moved back to Denmark and the stocklisted company where I continue to be at the helm. I love working with people from different cultural backgrounds and that is probably also why I am fine with 140 travel days a year at the age of 56.
I have a Visionary leadership style with a strong ability to drive progress in times of change by inspiring people and the ability to gain employee trust in new ideas. I have managed to build trust among all stakeholders, which has ensured that we have “stayed one course” while navigating through economic storms.
This visionary style has proven useful for an organization experiencing transformations and corporate restructuring. We are now more than 300 employees and maybe it time for me to go back to school to update my management style.