The top bunk

ElbOil is a new yet thriving company. Its business is bunker trading and broking, working with first class suppliers to make fuel available to clients across the world. Harro Booth started ElbOil in March 2011, growing out of his experiences as part of OW Bunker Group. Since its foundation, the company has had extraordinary growth as a result of a keen yet ambitious approach to business and has expanded from its founder to include a further three traders – Salvatore Somma, Jesper Jensen and Felix Pilz – as well as additional office staff.

“By the end of 2011 we were able to look back and be very thankful for the support and success we had,” states Harro. “This can be seen in our trading of about 100,000 tonnes of bunker fuel and turnover of nearly $60 million in a short start-up year of just ten months. We began with two fixed vessels in March 2011 and by the end of December had more than 50 fixed vessels in our portfolio with no claims on quality or product quantity. This really highlights the quality of our first class supplier network.”

ElbOil’s clients come from throughout the marine industry and include mid-sized owners and operators of container vessels, bulk carriers, tankers and offshore vessels. At the other end of the chain it works with a large number of fuel providers to ensure these clients have access to fuel no matter what part of the world they are in. For both rosters, the company has strict quality policies that potential partners must meet before ElbOil will work with them. For clients this means a reliable company able to meet its financial obligations as well as be open about its finances – though ElbOil nonetheless maintains counter party risk insurance with Euler Hermes – whilst suppliers must be able to provide comprehensive downstream services. A supplier that owns its own fuel, stores it, and transports it with its own barges is what ElbOil describes as a first class supplier.

As the middleman between these two parties ElbOil has proven itself to be a strong, knowledgeable and reliable company. In addition to an excellent network of suppliers and strong financial backing from banks and insurers, the team itself possesses considerable skill developed through years within and without the fuel bunkering sector. Harro, for example, has spent time working for Lukoil and OW Bunker Group including successfully managing a bunker branch in Dubai whilst – before working in bunkering – Salvatore worked in the raw coffee trading industry. In addition to this, because the team comprises international individuals, a wide range of languages is to hand including English, Italian, Spanish, French, German and Danish. Given ElbOil’s very international business, this provides a major advantage.

Comfortable in its strengths, ElbOil is able to offer clients a unique approach to bunkering. “We take care of our business partners and treat them as we would treat ourselves. Bunkering today is extremely important considering the percentage share of running costs of a vessel,” Harro says. “We work with midsized companies, talk to them in order to optimise their purchase of bunkers, and exchange the different market views and news on a daily basis even without any enquiry. We don’t need to increase our volumes immediately so, for example, if we know a competitor of ours has a better price and position then we will direct our clients toward them. ElbOil’s aim is to support our clients with the best service that we can. We are not too greedy and that gives us a personal touch that our customers approve of.”

Having had a reassuring first year up to the end of 2011, 2012 has seen the company’s success continue. “We are doing an average of about 20,000 tonnes per month since the beginning of the year,” details Harro. Nonetheless, the company operates in an industry that hasn’t yet climbed out of its downward cycle.

“We are definitely in a rough environment and of course the whole economy remains bad because of Europe as a whole. Further deliveries of newbuildings ordered during the boom time and less appetite of investments will keep further pressure to the shipping industry. Mergers, new structured and fully new set up companies will change the industry to a certain extent. When we first began to start our company up we were fully aware of these challenges but because we believe in the ‘anti-cyclical’ approach to investment. This means we are investing whilst the market is depressed to be in a good position when it returns. One of our key strategies in this respect is that we look at clients on a company-by-company basis rather than dismissing a company because it belongs to a struggling sector.”

Harro goes on to conclude that the young company has big ambitions that it will pursue with a cautious but open attitude: “ElbOil will increase its share capital. We did during 2011, increasing our initial 250,000 euro share capital by 100 per cent and this has given us very good cash flow management and allows us to take a few more risks. In the long-term we hope to invest this money into offering our clients more options. For example, strategic partnerships that give us the opportunity to own or actually part own physical supplies.

“ElbOil is convinced about a paradigm shift in fuelling vessels from Fuel Oil to LNG in future due to environmental issues and standards from IMO and authorities but also due to price. Already existing strategic partnerships with LNG distributors, negotiations with port authorities and terminal operators and a currently accruing feasibility study testifies to ElbOil’s engagement in the LNG sector is it expands to a point where bunkering is viable. We are also looking at long-term contracts with clients. Apart from these, in general we just want to maintain our customer and supplier relations, to be a first choice partner in the bunkering business.”

Bunker trade start-up firm
Impressive first year performance
Experienced, skilled traders