Thursday, 21 April 2016 00:05

Kotug and Boskalis (Smit) start European joint-venture

Photo courtesy Richard Telder| Photo courtesy Richard Telder|

KOTUG International B.V. (KOTUG) and Royal Boskalis Westminster N.V. (Boskalis) have announced that they have successfully formalized a joint venture for their European harbour towage operations. The joint operations are transferred to a 50/50 joint venture, combining the European harbour towage activities of KOTUG and Boskalis' subsidiary SMIT. In order to retain both strong brand names and to benefit from the already well established brand recognition in Europe, the merged operations will operate under the entity 'KOTUG SMIT TOWAGE'. The operational integration will start on April 7th, 2016. With a fleet of 65 tugboats, KOTUG SMIT TOWAGE will be a leading provider of harbour towage services in northwestern Europe, operating in 11 ports in Belgium, Germany, the Netherlands and United Kingdom. The geographical footprint of both KOTUG and SMIT is complementary. Activities of both partners in other parts of the world are excluded from this cooperation. KOTUG SMIT TOWAGE stands for high quality towage with a strong focus on tailor made services. The joint venture will achieve synergies, mainly from economies of scale benefits as well as opportunities for smarter operations– e.g. improved tug utilisation. As the operations are further integrated, sharing of joint experience, expertise and best practices will generate additional value. KOTUG's CEO Ard-Jan Kooren commented: "The combined operation allows us to meet the increasing demands of the maritime industry in order to supply our clients with an even higher level of efficiency and port call optimization in Europe." "By drawing on a combined track record over 350 years of experience and knowledge in the maritime industry and with a passionate workforce, the joint venture will further strengthen its high quality towage services. In this consolidating market KOTUG SMIT TOWAGE is able to offer competitive services against the highest operational and safety standards within the industry."
(Press Release, taken from Tugs Towing & Offshore Newsletter/Hans van der Ster)

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KOTUG SMIT Towage.
A new name in Europe.  Kotug and Smit are now working together in northwest Europe. 
Royal Boskalis Westminster N.V. and KOTUG International B.V have announced that the previously reported planned merger of their European harbour towage operations has been completed. The process of completing customary conditions, including due diligence and approval from regulatory agencies in respective countries involved and of course in cooperation with their works councils started in December 2014 when Kotug announced it had signed a memorandum of understanding (MOU) with Boskalis to merge their European harbour towage operations. It was a year later that an agreement on the merger was announced with the MOU being formalised and financial close aiming for the first quarter of 2016 followed by the operational integration. The final step has now been completed with the new company known as KOTUG SMIT Towage becoming operational on 7 April. Both Smit (a Boskalis subsidiary) and Kotug operate on a global basis with their headquarters in Papendrecht and Rotterdam respectively and the 50/50 JV concerns their operations in northwest Europe. The agreement involves 11 ports in Belgium, Germany, the Netherlands and UK with a fleet of 65 tugs resulting in operational synergies and a combined total revenue of approximately €150m. Activities of both partners in other parts of the world are excluded from the arrangement. At financial close, Boskalis refinanced its contribution to the JV, as a consequence freeing up and receiving €90m in cash.The selection of the name for the new venture is perhaps predictable but intended to retain both companies' strong brand names and to benefit from well-established brand recognition. The forming of partnerships such as this is not uncommon now as established towage operators expand into other regions where local knowledge and connections are important in establishing business and gaining confidence of customers.For Boskalis this strategy is an established part of its business model, Saam Smit Towage (Americas), Smit Lamnalco and Keppel Smit Towage (Singapore) being three examples of regional cooperation arrangements. Kotug is a family owned company also increasing its global presence with similar cooperation arrangements but are equally known for its innovative and forward-thinking activities including the well-known Rotortug and development of hybrid tugs.For Kotug, CEO, Ard-Jan Kooren commented: "The combined operation allows us to meet the increasing demands of the maritime industry in order to supply our clients with an even higher level of efficiency and port call optimization in Europe. By drawing on a combined track record over 350 years of experience and knowledge in the maritime industry and with a passionate workforce, the joint venture will further strengthen its high quality towage services. In this consolidating market KOTUG SMIT TOWAGE is able to offer competitive services against the highest operational and safety standards within the industry.
Source: By Peter Barker, Maasmond maritime journal Piet Sinke 56