Latvijas kuģniecība                             03.11.2005



Updated JSC Latvijas kuģniecība Strategy



Joint Stock Company Latvijas kuģniecība (Latvian Shipping Company – 

LASCO) Supervisory Council has received and considered updated 

version of the Group’s Strategy for 2005-2010.



Joint Stock Company Latvijas kuģniecība (Latvian Shipping Company – 

LASCO) updated Strategy for 2005-2010



Mission Statement



LASCO will be a competitive company in the world shipping industry 

with its activity in the long-term perspective focused on handy-size 

and middle-range tanker segment, providing to its customers highly 

qualified services in compliance with international safety standards.

LASCO’s core business is provision of marine transportation services 

using the fleet of vessels owned by the Company.



Strategic Goal



LASCO’s strategic goal is to increase the company’s return on 

shareholders’ equity in the long-term perspective, retaining the 

Group’s position among the world’s top ten handy-size and middle-

range tanker owners and at the same time preserving its leading 

position in the North European market. 

To achieve its strategic goal, LASCO needs to renew and efficiently 

use its fleet, as well as terminate all activities not related to 

the Group’s core business, thus optimising its administration costs.



Objectives



To achieve LASCO’s strategic goal, the following objectives must 

be achieved:

1. Renewal and modernization of LASCO’s fleet



As at 30 June 2005 LASCO’s fleet comprised 40 vessels, including 

32 tankers, 2 LPG carriers, 5 reefer vessels and 1 Ro-Ro/general 

cargo vessel. The average age of LASCO’s fleet is 18 years.



Ageing ships are the main reason to consider the prospects for the 

employment of LASCO’s existing fleet as unfavourable. Besides, the 

Group’s performance is considerably influenced by the requirements 

of the European Union and those of various international conventions 

like MARPOL, SOLAS, etc. (such as restrictions on the employment of 

single hull vessels). Therefore, LASCO’s main strategic objective 

is the renewal of the Group’s fleet. 



Considering that the Group’s Tanker Fleet ensures the largest 

turn-over and historically generates the major part of the Group’s 

profit, it should be viewed as a priority within the fleet renewal 

programme.



To comply with vessel safety standards, between 2005 and 2007 LASCO 

will have to phase out 7 tankers, as well as assess the economic 

expediency of several other vessels employment. For the Group not 

to lose its position in the shipping market and be able to ensure 

the existing tonnage to its customers, the phased-out tankers must 

be replaced with new ones. Therefore, 14 new double hull tankers 

built to ice class 1B will be added to LASCO’s fleet between 2006 

and 2010.  Ten of the above-mentioned vessels will be of 51,800 

deadweight tons and four – of 37,000 deadweight tons. They represent 

two series of newbuildings ordered at the same shipyards. This will 

enable not only to decrease the vessels price, but also to minimize 

their running costs. Besides, a special attention will be paid to 

maintaining the existing vessels in compliance with all international 

requirements, including, if required, modernization thereof.



Depending on the situation in the freight market LASCO’s fleet may 

be expanded also with modern second-hand tonnage and other newbuildings, 

as well as charter-in and reletting of other shipowners’ vessels may be 

considered.



LASCO Tanker Fleet Renewal Programme will be financed both through 

equity and debt finance. Such a model requires retaining of all LASCO’s 

profit in the medium term instead of distributing it in dividends.



To prevent the dependency of LASCO’s earnings on only one (tanker) 

fleet’s performance and to diversify the Group’s income structure 

for the purpose of risk management, a significant role in ensuring 

the Group’s successful performance is assigned also to the rest of 

LASCO’s fleet segments, namely LPG carriers and reefer vessels.



To ensure LASCO fleet’s activity, priority is assigned to the 

implementation of modern information systems enabling the efficient 

exchange of information required for the vessels operation and control, 

as well as to the compliance with safety standards and maintenance of 

the fleet in the required technical condition. 



To reduce the costs and increase LASCO’s competitiveness, the 

efficiency of the Group’s chartering activities and vessels 

technical management should be improved through less active 

use of intermediary services and more extensive involvement 

of its own structural units and subsidiaries.



2. Termination of activities not related to LASCO’s core business



Apart from the single vessel companies required for LASCO’s fleet 

administration and several companies providing supporting services, 

LASCO owns a number of subsidiaries whose activity is not related 

to LASCO’s core business.



To optimise LASCO’s performance, subsidiaries whose activities 

are not related to LASCO’s core business should be either sold 

or reorganised.



Taking into account that at present LASCO and its core business 

supporting subsidiaries are geographically located in a 

decentralized manner, the optimisation of the Company’s 

administration costs should be considered through merging LASCO 

Group’s administration and bringing it to a single location.







For detailed information:

Marita Ozolina-Tumanovska

Head of PR Departament

Phone: +371 7020120, 9287169

E-mail : ozolina@lsc.riga.lv