Zeeland Seaports and Port of Ghent merger successful
On 8 December, the Port of Ghent and Zeeland Seaports officially signed their long-anticipated merger and announced the new name and logo for the combined ports: North Sea Port. Through the merger, North Sea Port automatically ranks among the top European ports: number three for added value, and number ten for sea transhipment. We asked Jan lagasse and Daan schalck, CEOs of North Sea Port, to discuss the merger and its consequences for the region.
The CEOs of North Sea Port: Mr Lagasse, left and Mr Schalck, right.
After an extremely busy year of negotiations, how do you reflect on the merger process?
Mr Schalck: “One development that was fantastic to see was how the positive approach of stakeholders and companies involved continued to grow during the merger process. We gained broad public support, not just from the Municipal Council of Ghent, but also from the Flemish Parliament: both the majority and opposition became increasingly enthusiastic. I did not expect such a broad consensus on the matter. You’d need a magnifying glass to find anyone still opposed.”
Mr Lagasse: “Many parties involved at first had their reservations. It was very promising to see how communication, teamwork and trust between employees of both companies developed throughout the last year. I have seen that work out very differently with other mergers in the past.”
Mr Schalck: “I think the merger protocol and the merger agreement were very solid documents to start with. The merger agreement remained uncontested from the start, no fundamental questions were raised. A few additions were necessary, to clearly set out agreements in particular cases – Thermphos is a well-known example.”
Mr Lagasse: “With most parties involved, the focus remained on the higher purpose, which is ultimately good. This ensured the desire to find solutions.”
Mr Schalck: “There was ample praise for the transparency and decency with which we conducted the process. We took a lot of time to keep everybody informed: our stakeholders, members of the Dutch and Flemish parliaments, companies involved, our employees, ministers, governments and so on. We wanted to ensure that everyone who wanted to, could follow the negotiations and developments.”
Mr Lagasse: “We also created a focus group with business contacts, whom we consulted on several occasions to build support with, and receive input from.”
How did you decide on North Sea Port, the new name of the combined port area?
Mr Lagasse: “We engaged the services of a specialised bureau. First, they conducted a brainstorming session with us and our communication specialists. What do you want to be as a company, how do you want to come across? They came up with a list of suggestions, ranging from conservative to artistic. We decided upon a shortlist of three names, and proposed those to our stakeholders.”
Mr Schalck: “The stakeholders also gave us input beforehand. They helped us decide on what the new name should embrace and represent. The stakeholders expressed a preference for something equally representing both countries, with an international ring to it. Ports often have a geographical aspect to their name. Out of 100 ports, 99 are named after a city, a region, a province. This was something we wished to continue.”
Mr Lagasse: “That desire was expressed unanimously by both stakeholders and businesses involved. But it wasn’t an easy task. Ghent has an international image, as does the English term Flushing. Finding a term with an international appeal that covered the entire region, however, was not as simple. By choosing North Sea Port, we give the new port a unique place in the heart of Europe. Its geographical connotation is globally recognised, making it a strong brand in terms of marketing.”
Let’s take a look at the future. What are the next steps after finalising the merger?
Mr Lagasse: “From now on, we will introduce ourselves as North Sea Port. One company, with one commercial team and one strategy. We will internationally profile ourselves at trade fairs and congresses as a unity.”
Mr Schalck: “In 2018, no one should be able to notice that we were once two separate companies. One company is what we will be communicating to the external world in every possible way.”
Mr Lagasse: “As of 1 January, we will operate as one company, with one joint Management Team. The holding will initially be set up as a subsidiary of the two existing companies, as it can only become the parent company of the two companies after the Flemish Harbour Decree has been adapted. The Flemish Parliament is expected to vote on this decree during the spring of 2018, which is merely a formality. The merger has already been approved by the Dutch Government, the Flemish Parliament, the Flemish Harbour Commission, the Flemish Mobility Council, and the Inspection of Finances. After adaptation of the decree, we can realise the final merger structure. All stakeholders of both Port of Ghent and Zeeland Seaports will then receive their stakes of the holding, based on the agreed percentages. Apart from these developments, we have set up a Post-Merger Integration Workgroup, consisting of both Zeeland Seaports and Port of Ghent employees. It even includes a Dutch employee of Port of Ghent, as well as a Flemish Zeeland Seaports employee. They will guide and guard the integration process, find synergies and make propositions in regard to cultural aspects.”
Both Port of Ghent and Zeeland Seaports had strategical masterplans for the upcoming years. What is the strategical masterplan for North Sea Port?
Mr Schalck: “The merger protocol already came with a first draft of the new strategic masterplan. It basically combines the two previous ones, as they weren’t all that different to begin with. Specialised ports of a fairly similar scale have the same outlook on the future. The strategic masterplan for North Sea Port is based on three pillars:
- Economically: North Sea Port aims to offer companies in its region every opportunity to realise their potential and by doing so, adding to the prospects for the port in our combined future, which relies heavily on the added value of employment opportunities.
- Spatially: we want to optimise the infrastructure and spatial planning of North Sea Port in such a way, that companies can exploit their growth possibilities.
- Sustainably: we want to accelerate the achievement of sustainability objectives. Both port authorities had already set ambitious sustainability targets. As we can now realise a cross-border approach, we could create synergy between industrial players much quicker.
There are two important conditions. The first is: the merger needs to succeed. This also means that the integration within the company must work, as you will not achieve added value with a segregated mindset. The second condition concerns the company’s financial health, which we need to enhance as soon as possible to realise the investments in North Sea Port and our ambitions for the future.”
Mr Lagasse: “In Zeeland Seaports’ masterplan Winning Combinations, it says: ‘Collaboration with other ports therefore offers good opportunities for Zeeland Seaports. On a project basis, operational collaboration can somewhat reduce vulnerability. Extensive collaboration can reduce the vulnerability of Zeeland Seaports further and also increase the clout needed to achieve strategic goals and even strengthen the competitive edge. In order to add extensive collaboration in to the equation, the Port Authority has laid down a number of clear criteria and quantifiers. The strategic masterplan offers a framework in which discussions with interested ports can be set up.’ In other words this merger is the execution of our current masterplan.”
Mr Schalck: “In the Port of Ghent masterplan, cooperation was one of the strategic objectives as well. This merger was the realisation of two separate interests, so it came about rather naturally.”
What will change for the customers of the ports, and for companies in their vicinity?
Mr Schalck: “I think customers of both ports will see at least three major advantages. First of all, by being organised more competitively, in due time we’ll be able to lower certain rates, or keep them steady, regardless of inflation. I think customers will see their expenses lowered by the unity of the ports.”
Mr Lagasse: “We’ll share the synergies that benefit us with our customers.”
Mr Schalck: “The second advantage also has to do with synergy. Customers that are only familiar with one part of North Sea Port can discover synergies that are currently unavailable, or unfamiliar. An example would be the Steel2Chemicals project of ArcelorMittal and Dow Chemicals. Having one port manager, instead of two, can make a big difference in heattransition projects like these. From now on, you can always consider these matters cross-border. The third advantage lies in transport: combining cargo volumes. We can create greater inland shipping possibilities, as well as freight train products. We have already conducted collective railroad studies, and customers should commercially benefit from this, too. Brandnew options will soon be available. Inland shipping is both a customer and a player for other customers, as is the railroad sector. I see giant leaps in the near future in this respect.”
Mr Lagasse: “An added benefit is that since we will be a larger organisation, we will have more critical mass. This means we can provide better services to companies, as employees can specialise in certain issues, whereas in a smaller organisation, one person often has to deal with many different subjects.”
Mr Schalck: “It might be less tangible for customers, but while announcing the merger, I have already become aware of the branding created by this European port top 10 ranking. I’m convinced that aspects like trade shows will become a completely different experience for us. It will enable us to forward ideas, leads, potential shipping companies, and new services to our customers. It’s hard to quantify all of this, but I firmly believe in this.”
The official merger documents, moments after being signed.
North Sea Port’s head office will be located in Sas van Gent. Can you tell us more?
Mr Lagasse: “General meetings and Management Team and Supervisory Body meetings will all take place in the new Sas van Gent office. It will also be a meeting point for the various company teams.”
Mr Schalck: “It’s an internal affair. Customer contact and external relations will remain at the Mariahoeve, at the office in Terneuzen, and at our monumental harbour building at the Graslei in Ghent.”
Mr Lagasse: “For daily ins and outs, the customer will not need to travel any further than before. North Sea Port remains close to its customers.”
How will the two regions within North Sea Port relate to each other?
Mr Schalck: “One aspect that we cannot emphasise enough, is that all stakeholders, Flemish and Dutch, want to make the most out of this cooperation. Not merely in the Canal region, but also north of the Western Scheldt, creating employment opportunities, and attracting new businesses. It is the combination of the north and the Canal region that makes this portfolio so grand. There’s a different draught, another focus, no lock, a good railroad connection. Management would be quite foolish not to exploit the different opportunities of all parts of North Sea Port.”
Mr Lagasse: “The added value lies in the combination of the Canal zone and the Port of Vlissingen. This value surpasses that of the Canal region alone. Another thing we must bear in mind is cultural differences between ourselves, and between the Dutch, Flemish, and even Belgian federal government. If Chinese lived on the other side of the border, you would notice cultural differences at all times. But when you speak a virtually identical language, have similar appearances, and spend your free time in each other’s countries, you may not realise there are still cultural differences. We don’t want to turn someone from Ghent into someone from Zeeland, or vice versa. These differences will mainly surface within the merger combination, but cultural differences could be expressed towards a customer or stakeholder too. We will try to ensure that these differences will not just be managed within the company, but in external communication as well.”
