Entrepreneur, Innovator and Visionary
Over the course of an extraordinary career spanning more than half a century, Jacob Stolt-Nielsen built from the ground up three companies that led the way in dynamic and emerging industries. He invented the modern parcel tanker, built a leading offshore services company and pioneered the aquaculture industry. His gift for sizing up risks led to numerous triumphs, along with the occasional near disaster. But his businesses invariably persevered and prospered. In the industries on which he focused, the Stolt-Nielsen name is today synonymous with innovation and leadership.
Stolt-Nielsen demonstrated his potential as both an entrepreneur and natural salesman early. Born in 1931 in Haugesund, Norway, into the family of a third-generation shipowner, Jacob collected herring that fell to the docks as the fishing boats were unloading and peddled them door to door as a boy. During the war, with all kinds of shortages, including children’s Christmas toys, he negotiated with a local merchant to sell lead soldiers that Jacob made from moulds at home.
By the time he was in commercial school, Jacob had a more ambitious scheme for filling a niche market: the design, manufacture, sales and distribution of kitchen exhaust fans. His mother needed one, especially when herring was on the menu. After finding none available, Jacob took his ideas to a tinsmith who fabricated a fan that was the envy of all his mother’s friends. They all placed orders and Jacob soon had a workshop and payroll of eight.
Life in Pictures
Though his parents worried that he was not interested in the family shipping business, Jacob’s vision was clear. Watching the ships and boats from his bedroom window overlooking the harbour at Haugesund, he knew he would someday become a shipowner. Haugesund owed its very existence to the sea. It was a town built on herring bones. Its vital fishing and shipping industries were the foundation of its economy. Jacob fully intended to be shipowner, just like his father and both grandfathers. But he would need to go abroad to do it.
Jacob began his career in shipping at age 23 in London, learning the ins and outs of ship chartering and charming his way into the prestigious Baltic Mercantile and Shipping Exchange. He quickly realised that in the tanker business, the potential for profit was far greater in shipping chemical solvents and vegetable oils than crude oil. He also recognised that New York City, not London, was the centre of that market.
In 1954, Jacob finally landed in New York. Though he had done his homework and knew precisely which brokers to target for a job, opportunities were scarce. Through persistence, one finally relented and granted him a phone and a desk, but no salary. It wasn’t much, but it was far better than what he had been doing: riding the subway to the beach to spend the day eating carrots and French bread and reading newspapers salvaged from the trash!
Being a successful entrepreneur is about having the right idea, in the right place, at the right time. Jacob was certain there was a viable and valuable niche in the emerging petrochemicals market. He found himself in New York at precisely the time that the petrochemical industry was beginning to boom. There was a sudden need for secure transport of its products and a related increase in demand for shipment of vegetable oils, lard and tallow.
But the ships of the day were simply not up to the task. Piping to the tanks ran horizontally along the bottom of the ship and tended to leak, especially at the bulkheads. A better solution was needed. Jacob hit upon it while reading an article in Life magazine that talked about the use of submersible pumps to draw water up from deep beneath the desert in the American West. The same principle, Jacob saw, could be used to discharge the tanks on a ship. Being able to load and unload from the top of the tank eliminated the leaks that occurred when pipes entered a tank from the sides or the bottom.
The M/T Freddy was the ship on which Jacob realised his vision. No plans, no nautical designers or engineers were hired, and no contract was signed with a shipyard. Jacob alone, 24 years old, pointed and explained and the yard did the work, while two partners provided financing. Under Jacob’s supervision, the Freddy’s old pipes, fittings and pumps were wrenched out and a new system installed. It worked. The M/T Freddy was 13,500 tons of leak-proof compartments accessed via 16 deep-well submersible pumps. The ship was an immediate success and proved profitable far beyond expectations, earning Jacob the nickname ‘Jackpot Nielsen.’
Several years later, when he knew it was time to start his own company, Jacob proved he was as skilled at business as he was at building tankers. Negotiating with a prominent Norwegian shipbroker, and despite his own limited funds, Jacob came out on the majority end of a 60/40 deal. His first ship was christened Stolt Avance, inspired by the name of his grandfather’s first ship.
Jacob was a hands-on shipowner, who could often be found chipping rust and cleaning tanks alongside his employees. He earned a reputation as a fair and caring shipowner – one who had a completely ecumenical view of the labour force at all levels, without prejudice or preferences. To those who worked hard—those whose talent and dedication he respected—Jacob was very loyal. And that loyalty was reciprocated in equal measure by those with whom he worked—many of them choosing to spend their entire careers with him.
He also had a reputation for toughness, for being a shrewd negotiator, and for being intolerant of laziness – mental or physical. And he could be an intimidating presence, especially when dealing with those who failed to share his vision of the future.
That future, in fact, was bright during the Company’s first decade. Ten years after starting the business with two other employees and the Stolt Avance, the Company had grown to 11 owned ships, 21 on time charter and 150 employees.
His energy and inventiveness propelled him onward. He impressed both his competitors and shipbrokers with his innovative ideas, unique management methods and his complete command of technical requirements and potential markets.
Jacob became a one-man technical department, overseeing construction of the industry’s first real purpose-built parcel tankers, which became the model for the new international safety regulations.
Today, Stolt Tankers operates the world’s largest and most sophisticated fleet of chemical and parcel tankers – a total of more than 150 vessels. With 60 deep-sea ships – fully integrated with regional fleets in Europe, Asia, the Caribbean, coastal fleets in Asia, and inland barging services in Europe and the US Gulf – Stolt Tankers safely and reliably meets the exacting requirements of its customers, the premier manufacturers and users of liquid chemicals around the globe.
In 1971, Jacob acquired the first bulk-liquid storage terminal, thus paving the way for what is today Stolthaven Terminals. His vision of an integrated tanker/terminal service that sought synergies in the combined strengths of both Stolt Tankers and Stolthaven Terminals led to the Owner’s Berth concept aimed at increasing berth efficiency and reducing ship turnaround times. Today, Stolthaven Terminals operates a global network of 20 owned and joint-venture state-of-the-art bulk-liquid terminals around the world, with a total storage capacity of nearly 4.4 million cbm.
The discovery of oil in the North Sea rekindled Jacob’s entrepreneurial spirit. He moved quickly to capitalise on the opportunities, developing his own fleet of supply and support ships, helicopter companies, drilling rigs and an offshore base. In 1973, he created Stolt-Nielsen Seaway A/S to provide innovative diving services to the offshore oil and gas industry in the North Sea, an operation that later evolved into Stolt Offshore, a billion dollar company, which was divested in 2005 and is now part of Subsea 7.
In 1982, he founded Stolt Tank Containers, once again pioneering a transportation mode that was in its infancy – a mode that he saw as a natural complement to the Stolt Tankers business. Today, STC is one of the world’s largest providers of door-to-door transportation services for bulk-liquid chemicals and food-grade products. STC’s fleet of more than 34,000 tank containers is supported and maintained by a global network of 15 owned and joint venture depots – a unique competitive advantage that gives STC direct control over the handling, cleaning and maintenance of its fleet, ensuring unrivalled quality, reliability and performance that customers can count on.
Jacob’s entrepreneurial ways also drove the development of Stolt Sea Farm in the early 1970s. He put into practice with yet more patient capital what he had preached for years: that the world is hungry, its population is increasing, fish stocks are decreasing and nutritionists are touting the value of seafood in the diet. Hence, “we must farm the sea.”
Jacob was no stranger to the fisheries industry. He ran the family herring business in Haugesund when he was 18, having worked in all phases of it since childhood. But when Jacob started implementing his visionary aquaculture ideas in the early 1970s, there were no salmon pens along the Norwegian coast. Having begun with salmon, Stolt Sea Farm subsequently pioneered the development of biologically challenging species, namely sole, turbot and sturgeon for caviar. SSF is today a leader in high-tech aquaculture, and its innovative land-based farms are recognised for their environmental friendliness and performance.
Jacob had a history of friendship with Filipino seafarers. Even before he came to the Philippines in the 70s, the Company had been employing Filipino officers and crew. He made every Filipino seafarer proud by being the first ship owner to fully "entrust the wealth of (his) company" in the hands of a full-Filipino crew.
His long friendship with Capt. Gregorio Oca led to the creation of the Philippines' largest union of seafarers and the continuing and extensive training of Filipino seafarers in chemical tankers owned by Stolt-Nielsen that continues up to now. Classrooms and medical/hospital facilities were also donated by Stolt-Nielsen for Filipino seafarers and their families. More than 2,000 Filipino officers and ratings are currently employed by Stolt Tankers.
More than providing employment to thousands of Filipino seafarers, Stolt-Nielsen also opened doors of opportunity to countless Filipino youths dreaming to become seafarers by sponsoring them to maritime and technical schools with full support allowances/packages and by providing free world-class training to the seagoing staff. Filipino seafarers' families are also benefiting from Stolt-Nielsen’s support of hospitals clinics providing medical and healthcare services to seafarers and their families.
From early in 2003 to late 2007, Stolt-Nielsen engaged in a legal battle with the U.S. Department, which alleged that the Company had violated conditions of amnesty granted in an antitrust case. A U.S. court ultimately dismissed the indictments brought by the Department of Justice, which subsequently announced that it would not appeal the ruling. While Stolt-Nielsen won its case, Jacob characterized it as “the worst episode in the history” of the Company.
Over the course of his career, Jacob received recognition from numerous organisations: The Connecticut Maritime Association (CMA) presented him with the Commodore Award in 1991. In 1993 he received the Norwegian-American Chamber of Commerce (NACC) Achievement Award and was inaugurated by Babson College as a member of the Academy of Distinguished Entrepreneurs. The Louisiana Chapter of NACC honoured him with their Image Award in 2001 and, in 2002, he was inducted into the International Maritime Hall of Fame. In 2006, his contribution to the introduction of Filipino seafarers to the chemical tanker trade was recognized by the Philippines Government with their Outstanding Shipping Executive Award. Two years later, the John B. Lacson Foundation Maritime University conferred an honorary Doctor of Maritime Science degree in recognition of his long and productive experience, as well as exceptional and pioneering achievements, in international shipping.
On December 1, 2000, Jacob relinquished the day-to-day leadership of the Company to his son, Niels G. Stolt-Nielsen, who was appointed Chief Executive Officer. Jacob remained Chairman of the Board, and his sons – both Niels and Jacob B. Stolt-Nielsen – serve as Directors.
On December 15, 2009, 50 years to the day after he founded the Company in 1959, Jacob stepped down as Chairman of the Stolt-Nielsen Board of Directors, though he remained a Director. In announcing his decision, he said, “It has been my privilege to lead this Company and its people for the last 50 years. I step down as Chairman with sadness, but at the same time with an extraordinary sense of satisfaction and confidence, knowing that Mr. Olsson as Chairman, and Niels G. Stolt-Nielsen, the Chief Executive Officer, and his management team will continue to capably operate the Company going forward. I anticipate this transition with the peace of mind that comes from knowing that SNSA is in good hands and in good order.”
Precisely five years later, on December 15, 2014, Jacob Stolt-Nielsen retired from the SNL Board of Directors, thus formally concluding his career at the Company, 55 years to the date of its founding. He continued as Honorary Chairman.
"Jacob Stolt-Nielsen, an entrepreneur," a biography by Kristian Ilner, is available at www.vigmostadbjorke.no