Exclusive interview with outgoing chairman of the board :
Former chairman of the board still believes in golden future

Hanstholm Port has become a municipal port from January 1st after a turbulent year with three board chairmen. The last board chairman during the time as a self-governing port was appointed to save the port and create a profit from an ailing economy, but the rescue plan ended up being different from the first draft. Thisted Municipality ended up returning to municipal administration. But the story began in the spring of 2022.

It was quite an offer that Michael Svane received when the phone rang one day in April 2022. On the other end of the line was Thisted's mayor Niels Jørgen Pedersen (V), who offered Michael Svane the position of chairman of Hanstholm Port's board. The position was about to become vacant after former top politician Kristian Jensen (V) resigned to become director of Green Power Denmark.

As a former industry director in DI Transport and now a professional board member on the board of the Port of Rønne, among other things, Svane was already familiar with the port world.

The industry knowledge also gave him the knowledge that the offer was of such a nature that Michael Svane had to take time to think about it. The autonomous port had a debt of 630 million DKK and an overdraft of 63 million DKK, along with a long-term operating deficit.

- It has been known for many years that Hanstholm has been a problem port, among other things due to a large turnover in the port's management. This kind of thing creates unrest, and it is not good for a port, says Michael Svane today.

Within the last decade, the Port of Hanstholm has had no fewer than seven directors. But there was still something about the task that appealed to me.

- There is a lot of potential in the port, and I really like the area and the region, says Michael Svane.

That is why Michael Svane ended up saying yes and becoming the seventh chairman of the port's board since 2013.

"Prunes on the counter"

As the newly appointed chairman, one of Michael Svane's first tasks was to say goodbye to the port's director, Nils Skeby, who had shortly before been recommended for dismissal by the outgoing chairman Kristian Jensen. The port then appointed the previous operations manager Søren Zohnesen as director.

- My assessment was that there was a need for calm. It was also a signal to the local area, explains Michael Svane about the election of the acting director.

With operations on track, he began a review of the port's finances.

- We had a financial statement prepared, because we had to know where we stood. That was the cherry on the cake, says Michael Svane.

The review ended with a worse result than expected.

- My immediate thought was that it looked difficult, but the problems ran deeper. Operations in recent years had been covered by the credit. In 2015, there was a turnover of 30 million. DKK before the port expansion, and in 2021 it was 33 million. DKK. In the meantime, it had risen to 36 million. DKK. But for it to make sense to repay the 630 million. DKK debt, the turnover would have had to have been 55-70 million. DKK, says Michael Svane.

Income opportunities here and now

Michael Svane took up the task with enthusiasm.

- I reviewed all activities that could help generate income. Fishing and Hanstholm are connected, but fishing has been challenged due to Brexit and climate challenges. Even though you get large quotas for cod, and fish prices were very high in 2022, fishing cannot provide the port with the necessary million-dollar income, says Svane.

Aquaculture with fish farming is another area, but here it is only rental income from port area that can feed the port's economy.

- It is not an area that can sufficiently lift the port, he concludes.

A small success was quickly achieved in one area.

- We managed to get freight traffic going, but that cannot lift operations sufficiently either, says Svane.

Other areas are the energy cluster, which Nils Skeby during his time as director signed a letter of intent with European Energi. And there is also the possibility of offshore wind farms close to the port.

- The six planned wind turbines on the port area would provide income from renting out the port area, and also a variable income from electricity production. That is high income, and it is a good project. The offshore wind projects are a long-term perspective. But there is nothing to indicate that it would contribute to operations before 2027, says Michael Svane about the potential as a service port for future wind farms.

Dispatching offshore wind turbines?

While there are good opportunities to become a service port for wind farms, it is further away from becoming a shipping port.

- Everything is here to become a service port for wind farms. Although the port is already a port of entry for wind turbines for the Østerild Test Center, there is a long way to go before it becomes a professional shipping port. This requires high loading capacity on the quay and port depth, and this cannot be done without resources, explains Michael Svane.

He already knows from his position on the board of the Port of Rønne how that port has built up a business with the shipping of wind turbines over a period of about ten years.

Norway has been part of Hanstholm's history, but it has been partly forgotten. Previously, there have been several ferry routes to Norway from Hanstholm, but they all disappeared in the autumn of 2008.

- The hardest thing is probably getting ferries back, although it should not be ruled out. But we have started the freight route to Norway, reminds Michael Svane.

Although there have been three ferry routes to Norway and a catamaran to Kristiansand, the short distance to Norway has been forgotten along the way, the former chairman believes.

- They have clearly neglected to expand cooperation with Norway. The port is closer to the planned Norwegian wind farms than the Norwegian ports. This has been neglected, emphasizes Michael Svane.

The autumn's conclusion

Although Michael Svane lives in North Zealand, it has not been a chairman's position at all, where he could only work up to the board meetings.

- I have been in Hanstholm one to two days almost every week, he says.

Despite the hard work, a realization was clear in October 2022.

- We would need money, and the municipality as the owner did not want to invest more in the port. Therefore, we investigated the possibility of converting the port into an A/S. But if you are a limited company, you cannot get credit in Kommunekredit. At the same time, you had an exemption from the Port Act to have an overdraft of 70 million. DKK, says Michael Svane.

But the prospects were even worse, because it was no longer about creating growth and earnings in the long term.

- The bank wanted income here and now, and we had weekly meetings with the bank.   It was about the bank wanting to balance its operations as quickly as possible. Therefore, the demand came for a short-term solution that brought new and increased income to the port. We could not solve that in the short time, he says.

In the end, the options were exhausted.

- I ended up recommending that the municipality take back the port. The basis for the decision was, among other things, that they looked into a negative liquidity in the period 2021 to 2044. The municipality wanted to have the exemption for the overdraft extended. But it made no sense to continue, it would have been irresponsible. The conclusion was: You have to take the port back so you can make a slower solution, said the chairman of the board.

Still a huge potential in the port

Michael Svane takes a break from the report from deep inside the engine room for the port's turnaround. One thing that is really important to him is to tell about the economic storm that the Port of Hanstholm is in.

- Several people have asked me: 'How could you do that?' I could, because there is a very large potential in the Port of Hanstholm. It still is. But it requires investments, and when the eternal unrest stops, there is a golden future. The port can then either become a self-governing port or a limited company again later, says Michael Svane.

And here it is the long experience and knowledge from the transport industry that provides evidence.

- There will be a critical shortage of port infrastructure in connection with the expansion of offshore wind. But it is too far in the future to be profitable now, concludes Michael Svane.

His belief in the potential of Hanstholm Port is certainly still fully present.