Norwegian shipping veteran Dan Odfjell has been casting his eye back over the deals that shaped chemical tanker owner Odfjell, formed 110 years ago this month.
The former chief executive, now 86 and a third-generation owner, settled down for a fireside chat at the Bergen headquarters with Stig Tenold, NHH Professor of Economic History.
The first Odfjell-owned company, AS DS Birk, was formally registered on 17 November 1914.
In 1915, the Odfjell brothers, Fredrik and Abraham Odfjell, incorporated AS Rederiet Odfjell.
Odfjell was asked how Bergen has become the chemical tanker capital of the world.
He said the key was buying John Fredriksen’s chemical fleet in the late 1980s — a dozen ships for NOK 1.3bn, which today is $117m.
“That was a big deal,” Odfjell told Tenold. “I [then] bought the Gotas-Larsen fleet and suddenly we were the biggest. And it was a goal to beat the hell out of the competition.”
Odfjell was at that time bigger than major rival Stolt-Nielsen, and subsequently listed in Oslo.
The company then raised money in international capital markets to buy out partner Wesftal-Larsen.
“You know, I didn’t get along with one of the brothers. And I wanted to have a divorce. It was too heavy on me,” Odfjell said.
Angling for a split
“I was the managing director of the joint company,” he recalled.
“And when I bought out John Fredriksen, the next day the Westfal-Larsen brother — I will not mention names — came to my office and asked me, in whose name did you buy the Fredriksen ships?” Odfjell said.
“And there was a devil in me because I sat across the table [and said]: ‘I put it in my name, of course.’ And the brother said, ‘what’? Because, you know, we have a joint venture. And that would have been a tremendous breach of the fiduciary duties,” he remembered.
“So I said, take it easy, take it easy. I bought it in our joint name. But, I said, if you don’t want your 50%, I will take the whole thing,” Odfjell added.
“Those were big words. And, of course, I was sure he would take his part because it was a big deal. It was a good deal,” he added.
Odfjell then diversified by buying reefers.
“I started to do things that demonstrated to the Westfal-Larsen side, look, I’m not going to be held back by you,” he told the interviewer.
And he told his partners: “If you are not going to pull with me, I’m not going to pull with you. I am going to continue to do the job, but I will have my side business. It was a way to force a divorce.”
Soon after, Odfjell bought out Westfal-Larsen and cooperated with NCC in Saudi Arabia instead.
“The Saudis, they liked me. I’m sorry, this is bragging, if you like, but they told me, Dan, you are the only businessman from the West that arrived in Riyadh in economy class,” the veteran owner remembered.
