South American towage powerhouse plans to expand in Latin America, grow terminal operations and invest in green tugs
SAAM Towage is integrating its operations, maintenance, procurement and planning into one company-wide system and bolstering its terminal tug activities through green vessel investments.
This comes after SAAM’s US$194M investment in 2019 to acquire the full interest in its operations in Brazil, Mexico, Panama and Canada. The SAAM Smit Towage joint venture was dissolved to generate a regional powerhouse ready to expand and invest.
Recently appointed SAAM Towage managing director Hernán Gómez exclusively explains to Tug Technology & Business the company’s growth strategy and how it has overcome the latest business and operational challenges.
TTB: What has SAAM Towage achieved in 2020?
“This year, we will expand our operations when we close the acquisition of 70% of Intertug, a towage operator in Colombia, Mexico and Central America. Through which we will enter the former and reinforce our leading position in the latter markets.
“In 2020, we have advanced our strategy, while continuing to deliver a healthy cash compensation to our shareholders and implementing a new operational model that has prepared us for further growth.”
What are the business and operational challenges facing SAAM Towage?
“Given our latest acquisitions and the upcoming inorganic growth, our focus has been on the complete integration into our operating model, while continuing to deliver a reliable service.
We are also always looking for the right growth opportunity. Following our investment in Intertug, we will explore the Caribbean, actively evaluating the market for the right time to expand. We will pay special attention to terminal towing in this region.
“A recurrent challenge is customer consolidation in the liner segment, with the resulting pressure on prices, which we need to face through a continued search for diversification in our sources of revenue. Towage service providers must be able to serve larger vessels, which increases capital needs and safety requirements across our operations.”
How has SAAM Towage overcome these challenges?
“With respect to Covid-19, we have built our plan around safety for our crews and operational continuity for our customers, both of which we have been able to maintain.
“When talking about the structural challenges of our industry, our focus is to bring our operations closer together to share best practices to our corporate centre, in order to accrue the benefits of fleet coverage, standard processes and a common commercial approach. All of these combined translate into an improved value proposition for our customers.”
What is the business plan going forward over the next three years?
“The business plan is to optimise and grow. We must strive to consolidate our market position; retain and increase our volumes through safe and cost-competitive service; generate cash to fuel our potential growth; and be able to take on new operations. We will strengthen our coverage along the west coast of South America, expand into the Caribbean and increase our share of terminal towing – a segment where we are unrepresented compared to our benchmark peers. These are part of the strategic elements for the coming years.”
How will SAAM achieve these strategic plans?
“Firstly, we will continue to consolidate our operational model. We are implementing a new systems’ strategy, where we will go for one system and process solution for the core elements of our value chain – maintenance, procurement and operations. This will be fully implemented in 2021.
“Commercially, we will look to combine our current activities with an increasing share in our portfolio of long-term contracts to better balance our risk/return and duration.
“Finally, we will take a mid- to long-term view in our fleet planning, to make disciplined and selective investments to upgrade in places where we might have fallen behind.
“Overall, we have an adequate asset base to support our business, but we are always mindful of potential needs in our fleet to take on new projects or increases in volume.”
What are the upcoming towage requirements for new and expanding terminals in the Americas?
“Although Covid-19 has presented challenges and might produce changes to the maritime industry constraints, ports are requesting high-propulsion power on relatively short-length and versatile tugboats.
“We are currently focused in satisfying these needs for sustaining the growth of our clients. At the same time, we are prepared to deliver high-quality and properly equipped tugboats to specialised terminals where safe escorting operations are required and valued.”
What are the technical requirements and crew training needs for this?
“We see that lenders and operators of large projects are showing a growing concern for high safety standards overall. With this in mind, we are focusing our efforts in reinforcing our crews’ proficiency with permanently revised training procedures under our own traceable processes, supported by shore-based operations simulators.
“In technical requirement terms, we expect ‘greener’ requirements, environmental protection and emissions control as more than a trend, but something that needs to be embedded in the way we operate, and in a long-term commitment with the environment and the communities we conduct our business in.”
Are new requirements coming for greener tugs? How will these be achieved?
“Greener tugs will enter the industry as fleets gradually renew. We include these considerations in our newbuild and tugboat procurement strategy. For example, we have a very positive experience with Tsimshian Warrior in Canada, our first tug with IMO Tier III certification, since it meets requirements to operate in emission control areas.
“SAAM Towage has declared in its values a strong environmental commitment, which we are materialising through a clear set of goals for the next three years in terms of emissions, carbon footprint measurements and process certifications. This allows us to identify and implement actions to make our operations more sustainable, a process supported by ABS.”
Intertug merges to consolidate Colombian port and offshore operations
Intertug has completed a merger of four companies to consolidate its operations in Colombia. The corporate deal sees the merger of International Tug with Panamanian companies Panama Tugs, Atlantic & Pacific Supply Services and Intertug Investments Holding.
Following this merger, Intertug will operate a fleet of tugboats and offshore assets in Latin America and the Caribbean.
Corporate arrangements were concluded after approval from Colombia’s Delegation of Ports of the Superintendency of Transport (Supertransporte) in August.
The multi-company deal was needed to unify port services and operations in Colombia at a time when the Colombian State’s guaranteed legal security attracts more foreign investment to the country.
Intertug operates tug fleets built from 2001 to 2015 for harbour and ocean towing, ship mooring, escorting, pollution control and fire-fighting operations.