By: Forever Vagabond
NOL reported yesterday that it has replaced CEO LG (NS) Ng Yat Chung with Mr Nicolas Sartini.
NOL Chairman Kwa Chong Seng has also been replaced but will remain on NOL board as an independent director. LG (NS) Ng has been relegated to “special adviser” to the new chairman, Mr Rodolphe Saadé.
The changes came about after the Singapore state-owned, loss-making shipping line was taken over by the French group CMA CGM. CMA CGM said it plans to delist NOL if it manages to secure 90 per cent of the shares. It has already launched an all-cash voluntary conditional general offer for outstanding NOL shares at $1.30 apiece.
LG (NS) Ng: NOL slow and reluctant to change
In an interview with ST (http://www.straitstimes.com/
He said, “In this environment of extreme overcapacity and severe freight rate erosion, competition is based on cost.
“We have made good progress in that aspect, and every year we’ve managed to reduce our losses. Unfortunately, we haven’t been able to cut costs fast enough to offset the collapse in freight rates,” he added.
He further noted that NOL’s past successes were built on being a premium service line with “significantly higher” costs than its competitors.
“This was always the way for NOL, even before the 2008 financial crash, and it did well,” he lamented. “We didn’t have the right cost position in an industry that was becoming more and more commoditised.”
However, he did acknowledge that the company had been “a bit slow and reluctant to change”, even though he was the CEO for several years, calling the shots.
“It wasn’t easy because the business model has worked for us so far. There were arguments that when the cycle turns, things will be okay. Unfortunately, this time round, the down-cycle is probably as deep and as long as anyone can remember.”
NOL lost more than $1.5 billion in the last 4 years, under LG (NS) Ng, and finally Temasek was forced to sell NOL away to the French group.
And with regard to the sale of NOL, LG (NS) Ng has this to say, “Personally, it would be strange not to feel a little bit of regret, a tinge of this ‘sayang’ feeling.”
LG (NS) Ng was a former Chief of Defence Force of the SAF before joining Temasek and later, NOL as its chief in 2011. Prior to NOL, he has no shipping experience to begin with. Unlike LG (NS) Ng, the current new CEO, Mr Nicolas Sartini, has 25 years of shipping experience.
Netizens saddened by sale of national asset
NOL has been a national asset of Singapore since independence. It was started in 1968 as Singapore’s national shipping line.
Not surprisingly, netizens are saddened by the sale of an iconic national asset to a foreign group. Many blamed LG (NS) Ng.
One netizen said, “There goes our iconic NOL.”
“Outgoing NOL Group President & CEO, paper general, Ng Yat Chung talks rubbish,” he added. “It goes to show that paper generals are incapable of taking on global competition in a business like NOL.”
“Paper general, Desmond Kwek, CEO of SMRT must be counting his lucky stars running a domestic, captive business not subjected to global competition.”
LG (NS) Kwek is also a former Chief of Defence Force of the SAF before being roped in to run SMRT.
The netizen continued, “Anything untowards that happened and will continue to happen at SMRT, the tax-payers and the commuters has been bearing the brunt of it and will continue to do so. Nevermind the fatal accidents, the constant breakdowns….fares will increase and so will Desmond’s paychecks.”
Meanwhile, the PAP government continues to depend on these generals of the SAF to run Singapore’s state assets as well as the country.
