Ardmore Shipping Corporation owns and operates product and chemical tankers worldwide, engaging in spot trading, time charters and commercial management. CCO Gernot Ruppelt told Hannah Barnett how the company has developed into a responsible and successful business since it was founded in 2010.
According to Ardmore Shipping CCO
Gernot Ruppelt: “If you think shortterm in this business, you've already lost.” There is no doubt the company is dedicated to long-term investment and growth. This means investment in the products and services it offers, but it also means the people and the culture that keep Ardmore going.
Company milestones
Ardmore is based in Cork, Ireland, and controls roughly 30 product and chemical tankers. The average age of the fleet is not much more than eight years. “Most of them we own directly, some we have time chartered in, some we have commercial management responsibility for on behalf of another owner,” said Mr Ruppelt. But the company culture seeks to measure success in a more nuanced way than numbers alone.
That is not to say there are not some key, identifiable, milestones that brought the company to where it is. For example, Ardmore has been public on the New York Stock Exchange since 2013. “It enabled us to grow into a different tier of company,” Mr Ruppelt reflected.
In 2015, Ardmore entered the spot market which provided the company more exposure. That led to a globally connected team and, within a year, the establishment of regional offices in Singapore and Houston.
“But that was just step one,” continued Mr Ruppelt. “From there, we had to build, refine, strategise. You have to set up communication and intel sharing, marketing plans, infrastructure. But most importantly, it is about culture. What sort of culture do you want to create? ‘Culture eats strategy for breakfast,’ as Peter Drucker said. It's an easy tagline to post on LinkedIn, but social media posts are cheap. Walking the talk is something different. Creating the right culture requires effort and hard work sometimes. It requires attention; culture is key.”
The final milestone in defining the culture of the company came in 2021, with the formal announcement of the Ardmore Energy Transition Plan. With the intention to play a pivotal role in the industry’s goal to reach net-zero emissions, the ETP focuses on three key areas: transition technologies, transition projects and transition cargos.
“It’s at the core of who we are,” said Mr Ruppelt. “I think for the industry, the urgency around energy transition has been more recent. But for us, trying to build a company that is very energy efficient and very progressive has been part of our DNA since 2010.”
Shrewd investment
With a $61 million net profit reported for the third quarter of 2022, Ardmore is certainly doing something right. The spot earnings for its MR Tankers were $47,026 a day in the same quarter, while chemical tankers earned $31,536 a day.
“We executed on a large refinancing,” said Mr Ruppelt. “A lot of the free cash flow generated was used to pay down debt and optimise our cost structure on the capital side, but also for selective vessel upgrades.
We announced a new dividend policy as part of our long-standing capital allocation policy. That means reducing leverage and smart reinvestment in the business. Plus redistributing a significant portion of our earnings back to shareholders.”
The company’s approach to growth is ‘more nuanced than some of our competitors,’ said Mr Ruppelt. He emphasised the benefits of patience and the company et hos of purchasing ‘the right ships, at the right price, at the right time’, and was keen to highlight that Ardmore is not interested in pursuing growth for the sake of growth alone.
“If we wanted to run the company to just captivate markets or industry peers, we could buy a lot of ships and do big M&A deals,” Mr Ruppelt continued.
“That’s great for the headlines, but we're not convinced that it necessarily builds value. There's a lot of mistakes you can make when you simply pursue growth.
“I think for the industry, the urgency around energy transition has been more recent. But for us, trying to build a company that is very energy efficient, and very progressive, has been part of our DNA since 2010”
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“Companies take on too much debt, they overpay, they buy the wrong assets at the wrong time. And worst, and maybe the most common, they lose themselves along the way. Their strategic focus gets diluted, and their culture gets lost.
“And ultimately, we believe that our strong performance speaks for itself.”
Partnerships that pay off
When Ardmore makes an investment or partnership, it is done to add substantial and honest value: to contribute to company culture, rather than take away from it.
A clear example is a joint venture with ship management company Anglo-Eastern in 2016. “The best of both worlds,” as Mr Ruppelt put it. “Because
Anglo-Eastern is an extremely respected and high-performing organisation. It provides a tremendous amount of expe rience, legacy, staff and access to infrastructure that we cannot replicate on our own.”
Another valuable partnership was announced at the end of 2022, when Ardmore placed an order for Value Maritime’s emissions-reducing Filtree system. The technology is designed to clean both air and water on ships and includes integrated ‘plug & play’ carbon capture and closed loop features.
“Value Maritime was a great opportunity for a more forward-looking scrubber option. Strategically, we believe that becoming more exposed to chemical, nonpetroleum cargoes is in line with who we are as a com-
pany, and in terms of the long-term direction of our industry, it just makes the most business sense,” explained Mr Ruppelt.
The future is today
The Ardmore 2022 Progress Report is a coherent, current distillation of the company’s culture and values. It is called a progress report not only to emphasise the progressive nature of the company, but also to hold its actions to account.
The report expresses Ardmore’s commitment to a sustainable and realistic energy transition and decarbonisation process. “The key takeaway from the report is that the future is today,” explained Mr Ruppelt. “There is uncertainty, the rules aren't completely clear yet on what the IMO, or the European Union and particular regional jurisdictions are going to do in the legislative environment. But it is our belief that most of our customers will eventually reward or incentivise fuel-efficient fleets.”
This progressive outlook is fuelled by the people who run the company. Mr Ruppelt was enthusiastic at the potential held by Ardmore’s seafarers. The company has introduced a comprehensive and innova -
tive 3D training programme for staff, with the purpose of maintaining highest safety standards onboard Ardmore’s ships. But more than that, it is about allowing the development of workforce potential to positively impact the company culture.
“Seafarer education and engagement are very close to our hearts,” Mr Ruppelt enthused. “Ultimately, everything we do commercially will have an impact on the people on our ships. And vice versa: as a company, we believe strongly in the progression and education of our staff onboard and ashore. It all comes back down to culture. You can focus on your hardware, your steel and machinery, and you can write endless SOPs, but ultimately, it is about the people who operate the hardware: and they need the mentality that matches the culture you want to create.”
