CEO Statement

Satisfactory result in a weak market

Despite relatively weak economic activity in Denmark and Sweden, CMP posts a satisfactory result for 2011. Sales were SEK 727 million (675) and the operating profit SEK 106 million (116). Earnings were hit by a decline of nearly 2 million tonnes in transit oil volumes, which was a 45 per cent drop on 2010. Political turmoil in the Arab world was a key factor behind the decline, resulting in sharply reduced global oil trading activity. A positive development was that goods loaded and unloaded increased by nearly 1 million tonnes compared with 2010. The strongest increases were seen in scrap metal, prefabricated concrete slabs and cars.

Expansion in car handling

Car handling has long been one of CMP’s most exciting growth areas. Malmö is today the largest import and distribution port for new cars in the Nordic region. In 2011 we consolidated this position. CMP’s car handling business handled about 419,000 vehicles, which is an increase by about 20 per cent on 2010. We concluded new partnership agreements with car manufacturers in 2011, tying further strong brands to our car handling business. This business has also expanded in terms of the area of land employed in Malmö. This became possible when several of our cargo terminals relocated to the Northern Harbour during the year, which freed up a further 14 hectares of space. This freed-up capacity will allow us to double our car handling activities in Malmö. We are currently engaged in discussions with new, large car manufacturers that are looking to establish logistics hubs for their car distribution activities in northern Europe.

Growth in cruise business

Another expanding area is cruise traffic in Copenhagen. Last year we received 363 cruise ships and welcomed a total of 822,000 passengers at our facilities. This is a new record and shows how popular Copenhagen has become as a cruise destination. In 2011 the Danish capital was also named Europe’s Leading Cruise Port. Copenhagen and CMP have previously received several awards for our cruise ship services and the strong concept and efficient handling which we offer.

To build on this success, a new 1,100 metre long cruise ship quay is currently being built in Copenhagen, where it is scheduled to open in time for the 2013 cruise season. The quay has been commissioned by Udviklingsselskabet By og Havn I/S, one of CMP’s owners. Work on the cruise ship quay will be concluded in 2014, when the three new 3,300 square metre terminal buildings will also be ready. At the new quay we will be able to handle 500 arrivals a year and have the capacity to receive 1 million passengers. Our environmental activities will also improve, as we will be able to receive wastewater from the cruise ships at permanent facilities on the quays. The new terminal buildings will be equipped with solar thermal collectors and will also have “green roofs” – living plants as roof coverings, which soak up noise and absorb and bind air pollutants.

Northern Harbour fully operational

Our largest investment by far in recent years is the Northern Harbour in Malmö, which was went into operation in 2011. Together with the City of Malmö and with support from the EU, nearly SEK 1 billion kronor has been invested in new infrastructure. The new RoRo, Container and Combi terminals will increase our capacity in Malmö fivefold. The new terminals were gradually taken into use during the course of 2011. Looking back, it is clear that the relocation has been successful. We can now offer our customers state-of-the art modern terminals with high availability. The improved availability will also reduce the environmental impact. The RoRo ferries and lorry traffic have been moved away from central Malmö, reducing noise and emissions while also improving access.

As the Northern Harbour has now been taken into operation, work is accelerating on increasing freight volumes in Malmö. We want to find global manufacturers that are interested in concentrating their distribution to regional hubs, from which products can be distributed to a wider geographic area, such as the Baltic Sea region. Companies like Toyota and the Spanish steelmaker Acerinox are already using Malmö and CMP as such a hub.

In the immediate vicinity of the port the City of Malmö will be establishing the Malmö Northern Harbour Business Park (www.mnhbp.com), where logistics operators and manufacturers can establish operations. The new area will initially comprise 200,000 square metres but in the longer term the business park will comprise some 950,000 square metres of space, opening up entirely new opportunities for Malmö while allowing CMP and our port business to develop and expand in and around the Northern Harbour area.

Together with the City of Malmö, CMP forms part of a business establishment group, which is working to establish partnerships with new businesses, with a particular focus on the Asian market. In 2011 we visited several companies in China and also received Chinese delegations in Copenhagen and Malmö.

Oil and bulk

CMP is also an important hub for handling of global transit oil shipments. Large areas of space at the oil port in Malmö are now being set aside for the building of additional transit stores for oil products. At Prøvestenen in Copenhagen the so-called UPS areas are ready to be taken into use. This will open up a further 18 hectares and 650 metres of quayside for dry bulk operations. The two first tenants will start operating in the new areas in spring 2012. In the longer term CMP’s investments at Prøvestenen are also expected to pave the way for an increase in oil handling volumes.

Internal improvement tool

Looking back at 2011, I would like to highlight M/S Progress, our internal leadership and development programme. M/S Progress has been running for two years and focuses on three areas – Results, Customers/Employees and Partnerships/Processes. Each month about 20 CMP departments set targets in these areas, which are then monitored. We can now see that we have become better at identifying improvement areas and at improving transparency and the exchange of information between different departments. M/S Progress has also become somewhat of a “cultural trip” that has helped to promote a shared view and increase commitment on a number of key issues.

A long-term approach and business development

CMP is delighted at being designated a Core Port under the EU’s Connecting Europe programme. In somewhat simplified terms, one could say that those ports which the EU views as being highest priority have been included in the programme. Five ports in Sweden and three in Denmark have been accorded this status. Both our ports form part of the programme, which will make it easier for CMP  to receive EU support for expansion and new investments. In 2011 we also concluded new concession agreements with our owners. These have secured CMP’s port operations in our two cities until 2035, providing a long-term foundation that will strengthen our partnerships with new and existing customers.

As I have emphasised on previous occasions, increased turnover and larger freight volumes are key objectives for CMP. The new facilities that have been taken into use will enable us to grow in several segments, and our striving for such broad-based growth is also a governing principle for our sales and marketing activities. For 2012 we also see a potential in the new organisation that has been established in Port and Terminal Operations. This will enable us to make more efficient use of CMP’s internal resources, which, coupled with growing volumes, should help to improve our profitability and raise the productivity of our operations.

Environmental activities and CSR

CMP takes a dedicated approach to environmental and CSR issues, as shown in several ways in the annual report. So, to conclude, I would like to highlight an important innovation in environmental technology. In 2011 CMP installed a fully automated oil boom in the Oil Port in Malmö. The technology is called autonomous surface vessel. An ASV is an electrically powered “torpedo” which is fired into the water, deploys a boom and then attaches itself to one of the docking stations in the harbour basin. Any spills can thus be sealed off rapidly and effectively. We have so far been spared any spills in the Oil Port, but this new technology, which CMP is the first in the world to introduce, will further improve our preparedness.

Johan Röstin

CEO, Copenhagen Malmö Port

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