“TALLINK GRUPP HAS A GREAT AMBITION FOR GLOBAL EXPANSION”

Name: Paavo Nõgene

Position: CEO, Tallink Grupp

Age: 39

Zodiac sign: Pisces

Civil status and family: Single

Place of birth: Tartu, Estonia

Could you briefly introduce yourself to our readers?

I am the CEO of Tallink Grupp, with a strong ambition to expand the company beyond the shipping sector and the Baltic region. Besides a passion for all things relating to shipping and the local region, I am a big supporter and promoter of Estonian arts and culture.

Prior to joining Tallink Grupp, you held various positions in the cultural sector. What has your experience in shipping so far been like? Has it been a challenge?

It has not been as big a challenge as everyone seems to think. Ultimately, it is all about leadership – leading people, giving them a clear vision and focus for the future. In this regard, there is no difference between managing arts and culture development in the public sector and leading a multi-million-euro private sector organisation. It makes no tangible difference whether your goals are set by a government minister or by the owners of a private sector company.

Freight carrying remains the bread and butter for the majority of ferry operators in Europe. But Tallink Grupp adopts a different model, especially on the routes to Sweden. You rely mainly on passenger revenues. Do you think the passenger market is now saturated or is there still room for growth?

I definitely don’t think the passenger market is saturated yet. As we have seen in the last few years alone, there is increased interest in maritime tourism in the Baltic, with the numbers of Asian, Western European, American, and Russian passengers rising year on year. I think there is still potential for growth here. However, the growth will depend on our ability to continue developing the products, both in terms of modern vessels and innovative services.

In recent years Tallink Grupp has further expanded its non-shipping activities, primarily in the Baltic countries. What’s the strategy behind this move?

Tallink Grupp’s core business is and always will be shipping. This is our heritage and expertise. Over the last 30 years, Tallink Grupp has also garnered lots of expertise and experience in other areas, such as travel retail, food, and beverage. It is therefore natural for us to broaden our reach to different business and geographic segments. This is part of a normal strategy to mitigate risks. Tallink Grupp has a great ambition for global expansion.

Tallink Grupp recently opened an office in Singapore. What was the reason for this move and how are things progressing?

The establishment of our Singapore base is related to our travel retail ambitions and work in this area is ongoing. How business is conducted in different parts of the world varies greatly. We have found that doing business in Asia is definitely easier when we have a local base.

For more than two decades, you have been carrying Asian passengers in ever-larger numbers. Do you expect further growths in this market segment?

Tallink Grupp’s Asian passenger numbers have indeed been increasing year on year. Our cooperation with partners like Finnair has yielded good results. The numbers are big enough now for us to adapt our services to meet the needs of this clientele segment. We have employed Asian customer hosts, provided signs and information on board our vessels in a number of Asian languages, etc. We expect to see further growth in Asian passenger numbers as we continue to work closely with organisations and tour operators in that region.

During the last quarter of 2019, Tallink Grupp’s freight carrying shrank. Competition has intensified, especially on the Tallinn-Helsinki corridor. Was competition the only factor causing this shrinkage?

Competition has certainly intensified on the Estonia-Finland routes in recent years. This was certainly a factor. There was also an overall cooling of the global and regional economies. We are working hard on the pricing strategy, service improvement, and other measures in an effort to reverse this trend in 2020.

Could you give us a sneak peek of MyStar? What lessons have been learned from building and operating the Megastar?

There haven’t actually been any significant lessons learned from Megastar, which is still the most innovative, green, and modern ship operating in the Baltic today. Technology has moved on since 2016; you will see new features on MyStar. We are looking at even more innovative and modern solutions for the passenger areas. We are already working in partnership with TalTech University here in Estonia to implement Smart Car Deck solutions on board.

Following the implementation of the global 0.5% sulphur emission cap, LSF prices have surged. Has Tallink Grupp prepared for this? Would you consider a scrubber or LNG retrofit? 

The Baltic has been a sulphur emission control area since 1 January 2015. We have been using low-sulphur fuels for five years and have factored in the costs. We are not considering the scrubber or LNG retrofits. We have also decided that all future newbuilds will be LNG-powered.

What do you love most about your job?

The people. Tallink Grupp has over 7,000 employees in six countries. All of them have different characters, experiences, views, ideas, and passions. It is what makes Tallink Grupp the best company to work for.

What was your childhood dream job?

Like most children, I had many, depending on the mood and what seemed exciting at one time or another.

What are your favourite pastime activities?

I enjoy going to the theatre and listening to good music.

What is your idea of a perfect holiday?

Since we live in a colder climate, I like to recharge my batteries in the sun, wherever it shines. In the summer, the perfect holiday is definitely the one spent on the Baltic Sea.