Royal Vopak: 400 Years of Storing the World's Vital Products

I. Introduction & Episode Roadmap

Picture this: It's 1616, the Dutch Golden Age, and Amsterdam's harbor bustles with ships laden with exotic treasures from the East Indies. Among the chaos of merchants, dockworkers, and traders, a small group of warehouse masters begins a business that would outlast empires, survive world wars, and navigate the complete transformation of the global energy industry. Fast forward four centuries—those same warehouse masters have evolved into a company that stores enough oil, chemicals, and liquefied gas to power cities and supply factories across six continents.

Royal Vopak is the world's largest independent storage provider, with services ranging from the storage of chemicals, oils, gases and LNG to biofuels and vegoils. Today's Vopak, headquartered in Rotterdam, operates 77 terminals in 23 countries with a storage capacity of 35.4 million cubic meters.

The hook for any investor is deceptively simple: how did a company founded to weigh tea and spices for the Dutch East India Company become the indispensable infrastructure backbone of global energy and chemical flows? The answer lies in understanding something that Vopak's leadership has mastered across generations—the economics of strategic location, the power of switching costs, and the unusual dynamics of an industry where your assets become more valuable as they age, not less.

Proportional revenues were EUR 1,918 million for FY 2024, though this was down from 2023 partly after adjusting for divestment impacts of EUR 155 million and negative currency translation effects. The company now trades at a market capitalization of approximately €4.5 billion, having completed a share buyback program of EUR 300 million in 2024, repurchasing 7,924,438 ordinary shares, 6.30% of the company's outstanding shares, at an average price of EUR 37.86 per share.

The essential themes we'll explore tell the story of a company that understands three fundamental truths about infrastructure investing: First, location creates an almost unbreakable moat. HAL Investments B.V. is the largest shareholder with approximately 50% of shares outstanding, implying they have majority interest control of the future of the company. Second, the energy transition isn't a threat to tank storage—it's an opportunity. And third, the best capital allocators know when to say no. Vopak has increased its ambition to grow in gas and industrial infrastructure by an additional EUR 1 billion, reaching a total of EUR 2 billion of which EUR 1 billion has already been committed.

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II. The Golden Age Origins: Dutch Maritime Dominance (1616–1880s)

In the summer of 1616, while Shakespeare lay dying in Stratford and Galileo faced the Inquisition in Rome, Amsterdam was becoming the undisputed commercial capital of the world. Ships of the Vereenigde Oostindische Compagnie—the Dutch East India Company—returned from Java and the Spice Islands laden with pepper, cinnamon, and nutmeg worth fortunes. But bringing these treasures to Europe was only half the problem. Someone needed to weigh them, sort them, store them, and prepare them for redistribution.

Blauwhoed ("Blue Hat"), a storage and transportation company, was formed in 1616. The name came from the distinctive blue hats worn by the warehouse workers who handled goods along Amsterdam's canals. These "pakhuismeesters" (warehouse masters) occupied a position of extraordinary trust—they were the neutral parties who verified weights, assessed quality, and guaranteed that what arrived in Amsterdam could be stored safely and fairly traded throughout Europe.

Two centuries later, as Rotterdam emerged as the dominant gateway to continental Europe, Pakhuismeesteren ("warehouse masters") was created in 1818 to load and unload ships. Rotterdam's geography was simply better suited to the era of larger vessels and deeper drafts. The Rhine-Maas delta offered direct access to the industrial heartland of Germany and beyond. What began in Amsterdam would find its permanent home on the Maas River.

Van Ommeren, a shipping agent, was launched in 1839. Founded by Philippus van Ommeren, this concern initially focused on forwarding and agency services for cargo ships. But Van Ommeren possessed something that would prove crucial to Vopak's eventual formation: a shipping man's understanding of what goods needed to be stored, where, and why.

The Dutch dominance in global trade during this era wasn't accidental. The Netherlands had developed institutions—commercial law, insurance, banking, warehousing—that reduced the friction of moving goods around the world. The warehouse masters of Amsterdam and Rotterdam were essentially early versions of logistics infrastructure providers, their reputation for honesty and efficiency making them trusted intermediaries in global trade. This DNA of being an essential middleman, a facilitator rather than a principal in trade, would carry through to Vopak's modern business model.

The connection to today's Vopak is surprisingly direct. When you examine why Rotterdam remains Europe's largest port, why Vopak's ARA (Amsterdam-Rotterdam-Antwerp) terminals command premium pricing, and why customers sign long-term contracts for storage capacity in these locations, you're seeing the accumulated advantages of 400 years of infrastructure development and commercial trust.

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III. The Oil Revolution: Becoming a Tank Storage Pioneer (1888–1940s)

The late 19th century brought a transformation that would fundamentally reshape the warehouse masters' business. In 1886, Karl Benz patented the first automobile. Within two years, the implications for storage were becoming clear—the world would need massive quantities of petroleum, and someone would need to store it.

Pakhuismeesteren began offering bulk tank storage facilities in 1888. This was a pivotal moment. The company that had cut its teeth on coffee, tea, and spices was now entering an industry that would define the 20th century. They constructed the first dedicated oil storage tanks in the Port of Rotterdam—a bet on a technology and a fuel source that many considered unproven.

The Van Ommeren side of the eventual merger pursued tank storage through a more circuitous route. Philippus van Ommeren had developed a close friendship with Henri Deterding, the man who would become the driving force behind Royal Dutch Shell. This relationship proved instrumental. Van Ommeren founded the Matex tank storage company in 1910, but with an important constraint—Royal Dutch insisted that this new venture could not store petroleum or its derivatives until 1957. The oil majors wanted to control their own storage destiny.

As a result, Matex initially focused on vegetable oils and fats. This limitation, frustrating at the time, would ultimately prove beneficial. It forced Van Ommeren's storage business to develop expertise in handling a wide variety of products, building the multi-product capability that remains central to Vopak's competitive advantage today. When the restriction finally lifted, Van Ommeren had decades of experience in terminal operations that could be immediately applied to petroleum storage.

World War II brought destruction and transformation. Rotterdam, strategically positioned as Europe's gateway, became a target. In September 1944, as the Allies recaptured the port of Antwerp, Berlin ordered the destruction of port facilities in the Netherlands. Tank terminals, jetties, and storage capacity were demolished in the retreating German forces' scorched-earth campaign.

The post-war rebuild would establish Rotterdam's modern significance. American Marshall Plan funds flowed into port reconstruction. The massive Europoort complex, designed to handle supertankers, began development. Rotterdam emerged not just restored but transformed—positioned as the primary entry point for oil flowing to the industrial economies of Western Europe. The warehouse masters' descendants found themselves controlling irreplaceable infrastructure in the most strategically significant port in continental Europe.

For investors, this history illuminates a crucial characteristic of the tank storage business: geographic and regulatory barriers to entry compound over time. The permits, land access, and customer relationships developed over decades in Rotterdam cannot be replicated by a competitor with capital alone. Time itself becomes part of the moat.

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IV. Building the Global Empire: Pakhoed, Van Ommeren & Expansion (1960s–1998)

The post-war decades brought consolidation and global expansion. Blauwhoed and Pakhuismeesteren merged to form Pakhoed in 1967. The combination created a diversified logistics company with significant tank storage operations, but also activities in transport, shipping, and chemical distribution. This conglomerate structure would persist for decades before eventually proving problematic.

Across the Atlantic, a parallel thread of the Vopak story was developing. Van Waters & Rogers, a Seattle-based brokerage for the Pacific Coast, was founded in 1924. On August 8, 1924, George Van Waters and Nat Rogers opened a small firm in Seattle, Washington, buying and selling naval supplies, paint, raw materials and cotton linters. When Van Waters & Rogers entered the laundry supply business, it paved the way for the company's future in chemicals.

This American company would grow into Univar, becoming a major force in chemical distribution. Pakhoed acquired 35 percent of Van Waters & Rogers/Univar in 1986. Pakhoed acquired full control of Univar in 1996. This acquisition brought together European tank storage expertise with North American chemical distribution—a combination that seemed logical at the time but would eventually prove unwieldy.

Throughout this era, both Pakhoed and Van Ommeren expanded their tank storage footprints internationally. Van Ommeren built up deep-sea shipping and inland barging fleets while becoming one of the Netherlands' leading stevedoring and distribution companies. The industry logic favored scale—larger customers wanted storage partners with global reach, and the capital intensity of tank storage operations created advantages for well-financed players.

By the 1990s, consolidation among the oil majors and chemical companies was accelerating. Customers that once operated in single regions were becoming truly global enterprises. They wanted storage partners who could offer capacity in Rotterdam and Singapore, in Houston and Fujairah. The strategic logic for a Van Ommeren-Pakhoed combination was becoming irresistible—but executing the merger would prove challenging.

The conglomerate era of the 1960s-1980s created companies that looked impressive on organizational charts but often lacked operational focus. Pakhoed's activities spanned shipping, distribution, and storage—but the synergies between these businesses were less compelling than they appeared. Van Ommeren faced similar challenges with its diverse portfolio of shipping and logistics activities. Both companies needed focus, but neither could achieve it alone.

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V. The Birth of Vopak: A Merger of Equals (1998–2002)

The first attempt to merge Van Ommeren and Pakhoed in 1998 ended in failure—and the story of that failure reveals much about how infrastructure deals can go wrong.

The European Commission ruled that the merger would give the combined company too much market power in storage services in the Antwerp-Rotterdam-Amsterdam (ARA) area. The EC ruled this as insufficient and the merger was canceled. Renewed negotiations resulted in the combination selling the Pakhoed terminals in Pernis and Botlek as well as Van Ommeren selling their stake in Gamatex in the Port of Antwerp.

The ARA region represents the most valuable tank storage real estate in Europe—the chokepoint through which a massive share of the continent's oil and chemical imports must pass. Regulators correctly identified that a combined Van Ommeren-Pakhoed would have unprecedented market power in this critical corridor.

Before Van Ommeren and Pakhoed finally merged in 1999, several previous merger talks had amounted to nothing. Although they agreed that it would be a logical move to have the two Rotterdam companies reinforce each other worldwide rather than compete with each other, they failed to reach an agreement.

The personal dynamics between executives also proved challenging. They had talks several times in the 1990s and came particularly close to a merger in 1998. However, because executives Van den Driest and Westdijk could not agree on which terminal they would hive off to meet Brussels' competition rules, the talks halted. Another factor that played out in the background was that Pakhoed's harbor men and Van Ommeren's shipowners especially had an eye for the differences.

When the companies finally completed their merger in 1999, adopting the name Royal Vopak, they inherited a problem: the business made less sense combined than it did separate. The new combined company Vopak has a difficult start: there is only very limited synergy to be found in the storage services and the chemical distribution services and the company lacks the funds to realize her growth strategy.

Early in 2002 the CEO Ton Spoor left with immediate effect, officially because of 'personal reasons', but it was rumored that the break of trust between him and the company was caused by the €150 million write-off in 2001 caused by a failed attempt to introduce a pan-European IT system. Spoor was succeeded by Gary Pruitt.

The decision to spin off Univar in 2002 became the transformation that defined Vopak's future. When Pakhoed and Van Ommeren merged to become Vopak in 1999, they decided to focus on tank storage and divest all other activities. For this reason, they took leave of Univar in 2002, which became independent and is still successful.

In 2002, Univar split off from Royal Vopak as an independent company and world leader in chemical distribution. In 2007, Univar purchased a leading competitor, CHEMCENTRAL and became a privately held company.

The Univar spin-off represents one of those inflection points that looks obvious in retrospect but required genuine courage at the time. Chemical distribution is a good business, but it's fundamentally different from tank storage. Distribution involves buying and selling products—taking price risk, managing inventory, competing on service and relationships. Tank storage is infrastructure—providing the physical capacity that others need regardless of market prices, earning fees for the security and efficiency of storing products safely.

By choosing pure-play tank storage, Vopak's leadership made a bet on the infrastructure business model. They accepted that the company would be smaller (measured by revenue) but more focused, more defensible, and more valuable per dollar of invested capital. History has vindicated this choice—Univar has traded hands multiple times, and was acquired in August 2023 by funds controlled by Apollo Global Management, while Vopak has steadily expanded its terminal network and deepened its competitive moat.

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VI. The Growth Era: Global Expansion & Asian Pivot (2002–2013)

With the Univar spin-off complete, Vopak emerged as a pure-play tank storage company with a clear strategic mandate: build the world's leading network of terminals at critical nodes in global trade. By 2002, the company operated 32 terminals across 14 countries with total storage capacity of approximately 21 million cubic meters—large but far from dominant.

The company listed publicly on Euronext Amsterdam in 2004, providing the currency and discipline of public markets to fund its expansion. The timing proved fortuitous—global trade was about to accelerate dramatically as China's manufacturing miracle reshaped supply chains.

In 2010, Vopak reported revenue of approximately €1.2 billion with net profit of €271 million, a significant recovery from the 2008 financial crisis when revenue had dipped to around €1.09 billion. The increase was attributed to higher demand for storage services, particularly in emerging markets where industrial development was creating massive new needs for fuel, chemicals, and feedstocks.

Asia became the primary growth vector. Vopak invested aggressively in China, Singapore, and other rapidly industrializing economies. By 2015, storage capacity had grown to approximately 24.8 million cubic meters—a nearly 20% increase from 2002 levels. The strategy was straightforward: follow the customers. As chemical producers built plants in the Middle East and Asia, as refiners sought access to growth markets, Vopak built the terminals that connected supply with demand.

The LNG Bet:

The most significant capital commitment of this era involved not oil or chemicals but liquefied natural gas. Together with Dutch company N.V. Nederlandse Gasunie, Vopak built the first LNG terminal in Rotterdam. Building commenced in 2008 and on 23 September 2011 the terminal was opened by the Queen and since then it is in full production.

The terminal was founded by Gasunie and Vopak, who both have a 50 percent stake, and facilitates the storage of liquefied gas. This allows both companies to anticipate both Dutch and European energy policies, which assume that the Netherlands, when its gas fields will be depleted, will become an importer of gas. The construction of the Gate terminal is an essential part of the efforts of the Dutch government to become the gas hub of Europe.

The Gate terminal (Gas Access To Europe) required total investment of approximately €800 million—an enormous bet on the future of European gas imports. The LNG terminal consists of 3 tanks with a combined storage capacity of 540,000 m³ liquefied gas, equivalent to a throughput of 12 billion m³ gas per year. The total investment was approximately 800 million Euro. The joint-venture has several multi-year contracts with energy producers like E.ON and Essent.

This investment in LNG infrastructure revealed Vopak's willingness to commit significant capital to long-duration assets with predictable returns. LNG terminals require massive upfront investment but generate decades of stable cash flows under take-or-pay contracts. The Gate terminal would prove prescient—though not immediately appreciated—when Europe's energy security became paramount in the early 2020s.

For investors, this growth era demonstrated Vopak's capital allocation philosophy: build capacity where structural demand is rising, secure long-term customer commitments before committing capital, and prioritize locations with natural advantages that competitors cannot replicate. The strategy generated growth but also brought challenges. Not every terminal investment worked equally well, and the company would eventually need to confront the question of portfolio optimization.

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VII. INFLECTION POINT: The 2014 Strategic Reset

By 2013, warning signs were emerging. Vopak had expanded rapidly, but not every terminal was earning acceptable returns. The company's financial outlook no longer fully aligned with its growth ambitions. In July 2014, management announced a fundamental shift in strategy—one that would reshape the portfolio over the following decade.

The core insight was deceptively simple: not all tank terminals are created equal. Some terminals—those at major trading hubs with limited capacity for new construction—enjoy structural competitive advantages that translate into pricing power and high utilization. Other terminals—smaller facilities in competitive markets—face constant pressure on rates and utilization.

Management defined clear portfolio criteria for the first time:

Strategic Hubs: These include the ARA region (Amsterdam-Rotterdam-Antwerp), Fujairah in the Middle East, Houston in the US, and Singapore in Asia. These terminals represent prime real estate where new building is often impossible or where Vopak holds privileged positions through private jetties and deeper drafts.

Industrial Terminals: Connected by pipeline to customer facilities, these terminals benefit from very long-term contracts and switching costs that make customer relationships extremely stable. The customer's own manufacturing facility depends on reliable feedstock supply—they cannot easily switch storage providers.

Import-Export Terminals: These have the smallest moat among terminal types but benefit from Vopak's global customer relationships and the increasing imbalances between production and consumption of bulk liquids.

The company launched a divestment program targeting approximately 15 smaller terminals that contributed only around 4% of EBITDA. This wasn't retrenchment—it was focus. By selling terminals with limited competitive advantages, Vopak could redeploy capital to locations where incremental investment earned higher returns.

The strategy also emphasized a shift from growth for growth's sake to free cash flow generation. This represented a maturation of the investment thesis—recognition that value creation comes from returns on invested capital, not merely from expanding the asset base.

Why did this matter? Investors should recognize when management demonstrates the discipline to say no. Many infrastructure companies succumb to the temptation of growth—building terminals because they can, not because they should. The 2014 reset showed that Vopak's leadership understood the difference between activity and value creation. They were willing to shrink the company's footprint to improve its quality.

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VIII. Portfolio Transformation: The Art of Capital Allocation (2017–2023)

The strategic reset announced in 2014 translated into concrete action over the following years. Between 2017 and 2019, Vopak executed a portfolio transformation involving €700 million in divestments and €1 billion in growth investments—essentially reshaping the company while maintaining operational continuity.

The Divestment Program:

In October 2019, Vopak sold its Amsterdam and Hamburg terminals to First State Investments. In December 2019, Vopak completed its divestment of the joint venture Yangpu oil terminal in Hainan, China. In January 2020, Vopak completed its divestment of oil terminal in Algeciras to First State Investments.

These divestments followed a pattern. The assets sold were typically oil-focused terminals in markets where Vopak lacked competitive advantages—either facing significant local competition or serving markets with limited growth potential. First State Investments (now IFM Investors) acquired multiple terminals, suggesting that Vopak achieved fair prices for assets that no longer fit its strategic priorities.

Vopak completed the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven) to Infracapital for a total purchase price of EUR 407 million including a conditional deferred payment of EUR 19.5 million. Total cash receipt net of transaction costs and net debt items at closing is EUR 372 million. The combined operational capacity of the three terminals is 1.4 million cbm.

The Rotterdam chemical terminal sales in 2023 were particularly notable. Rotterdam is Vopak's home market—selling 1.4 million cubic meters of capacity there signaled that even geographic proximity wouldn't save assets that lacked strategic fit. These terminals faced oversupply in the European chemical storage market, and management chose to exit rather than accept subpar returns.

Strategic Acquisitions:

The flip side of divestment was targeted acquisition and development. In December 2020, Vopak and BlackRock's Global Energy & Power Infrastructure Fund (GEPIF) successfully acquired three industrial terminals from DOW on the U.S. Gulf Coast.

In November 2019, Vopak announced its selection by Gulf Coast Growth Ventures (GCGV) to design, build, own, and operate new industrial terminal in Corpus Christi, on the U.S. Gulf Coast.

The US Gulf Coast represented an attractive market—proximity to shale gas resources was driving massive new petrochemical investment, and industrial terminals serving these complexes offered long-term contracts with creditworthy counterparties.

India emerged as another priority. The joint venture with Aegis Logistics created Aegis Vopak Terminals Limited (AVTL), providing exposure to one of the world's fastest-growing energy markets. AVTL, established as a joint venture of Aegis Logistics Limited and Vopak India BV, is the largest Indian third-party owner and operator of tank storage terminals for liquified petroleum gas and liquid products in terms of storage capacity, as of December 31, 2024.

The portfolio transformation demonstrates what good capital allocation looks like in practice. Vopak wasn't simply buying and selling assets—it was reshaping the portfolio to concentrate resources in markets and asset types where returns on invested capital could exceed the cost of capital. This discipline, sustained over nearly a decade, explains much of the company's current valuation.

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IX. INFLECTION POINT: The Energy Transition & New Energies Strategy (2020–Present)

Russia's invasion of Ukraine in February 2022 transformed European energy policy overnight. Suddenly, the LNG infrastructure that Vopak had been building for a decade was no longer a nice-to-have—it was essential to energy security.

EemsEnergyTerminal: The LNG terminal in Eemshaven was developed in 2022 to increase energy security and reduce dependency on Russian natural gas. The terminal went from plan to completion in a record time of only six months. EemsEnergyTerminal has been operational since September 2022.

Gasunie developed this new floating LNG terminal in the Eemshaven area in response to gas supply insecurities and a desire to reduce the dependency on Russian gas. The LNG terminal has been operational since 15 September 2022 and has a regas capacity of 8 billion cubic meters per year.

Vopak completed the principle agreement announced in April 2023 and became a 50% shareholder in EemsEnergyTerminal, an LNG import terminal of 8 billion cubic meter (bcm) per year located in the Eemshaven in the Netherlands. This terminal has been operational since September 2022.

The speed of the EemsEnergyTerminal development was extraordinary—six months from concept to operation, compared to years for typical LNG projects. This demonstrated what urgency and government support can accomplish when energy security is at stake. Vopak's decision to acquire 50% ownership for just above EUR 80 million gave it exposure to critical infrastructure at a fraction of development cost.

In August 2023, Gate terminal and its shareholders Gasunie and Vopak took final investment decision to expand Gate terminal's storage and regasification capacity. The expansion consists of a new LNG storage tank of 180,000 cubic meters and additional regasification capacity of 4 BCM per year. The new capacity is already rented out under long term commercial agreements and is expected to be ready for operation by the second half of 2026.

The total investment is approximately EUR 350 million. Once all envisaged projects at Gate terminal have been completed, the terminal will have a total regas capacity of 20 billion cubic meters per year.

Beyond LNG: The New Energies Push

Vopak's energy transition strategy extends well beyond natural gas. Vopak increases its ambition to grow in gas and industrial infrastructure by an additional EUR 1 billion, reaching a total of EUR 2 billion of which EUR 1 billion has already been committed. Vopak confirms its ambition to allocate EUR 1 billion in energy transition infrastructure.

Together with partners and customers, Vopak is accelerating the development of infrastructure solutions for hydrogen, ammonia, CO₂, battery energy storage, and low-carbon fuels & feedstocks – paving the way to a more sustainable future.

The battery energy storage initiative represents Vopak's most dramatic diversification. With over four centuries of history in storing virtually every conceivable commodity, Vopak has now made its first move into the electricity storage sector. Vopak Energy Storage Texas, a joint venture between Vopak North America and Sable Power & Gas, is officially operational—marking Vopak's global debut in energy storage. Located on a two-acre site in Damon, Texas, VEST consists of two energy storage systems with a combined capacity of 15 MWh.

In the Netherlands, on 10 April 2025, Vopak acquired a 100% share in a battery development company in Groningen. This company holds land, a 300 MW grid connection and all required permits, with which Vopak aims to construct a utility scale Li-ion Battery Energy Storage System. This is the second battery energy project for Vopak in the Netherlands.

Japan and Ammonia:

Signed joint development agreement with IHI Corporation to establish a joint venture for the development and operation of an ammonia terminal in Japan. In India, our joint venture AVTL is now publicly listed, which is unlocking its value and providing funds for future growth such as the recently announced development of India's first independent ammonia terminal.

This expansion into Japan—a market Vopak had never previously operated in—demonstrates the growth potential of ammonia as a hydrogen carrier and low-carbon fuel. Japan's aggressive decarbonization targets create structural demand for imported clean energy in liquid form, and Vopak is positioning itself to capture this opportunity.

For investors, the energy transition creates both risks and opportunities for tank storage companies. The risks are obvious—declining demand for fossil fuel storage as electrification proceeds. The opportunities are less appreciated: LNG infrastructure becomes critical for energy security, ammonia emerges as a hydrogen carrier, and battery storage represents an entirely new business line. Vopak's diversified approach—gas infrastructure today, energy transition infrastructure tomorrow—appears designed to navigate this uncertainty.

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X. Digital Transformation: The Hidden Competitive Advantage

In 2014, when Leo Brand joined Vopak as Chief Information Officer, he kickstarted an ambitious and successful digital transformation. Vopak has now become the poster child for digital transformation in the Netherlands, and for its industry globally.

The company aggressively rolled out Industrial IoT, automated its port operations with bespoke robot and drone designs, infused its processes with end-to-end data gathering and processing capabilities, and significantly altered the ways it sourced, produced and serviced IT and operational technology.

The transformation began with repositioning IT within the organization. The decision to change the reporting line of the CIO to the COO and the board took three months – at the time, IT was reporting to the CFO and located in the basement, underground and almost invisible.

Therefore, Vopak made the bold decision to phase out the industry standard enterprise resource planning (ERP) system, JD Edwards, and developed its own software on a rapid application development (RAD) platform from Outsystems for processes where they differentiate their services from competitors. This was not easy, but the architecture has been conducive to their commercial success and competitive differentiation over the last few years.

The decision to build rather than buy is unusual in an industry where most players rely on off-the-shelf solutions. Vopak's reasoning: the processes that create competitive differentiation—customer-facing services, operational optimization, safety systems—deserve custom solutions that competitors cannot simply purchase.

After we built our in-house infrastructure, I got offers from other companies in the sector. They wanted to buy the software applications that we developed ourselves, but we refused because those products and services are key to our competitive differentiation.

Between 2017-2019 Vopak invested approximately €100 million in technology, IT and innovation. This investment funded everything from IoT sensors to digital twins—complete virtual replicas of physical terminals that enable real-time monitoring and optimization.

Together with TWTG, Vopak developed an extra layer of technology in their digital transformation journey to turn smart industrial terminals truly into reality. The partnership with TWTG, a Dutch IoT company, involved deploying sensors on valves throughout Vopak terminals—TWTG will work on fitting dedicated I-IoT sensors on existing valves of large pipes. This will bring a greater certainty on the status of the infrastructure (i.e. spillage prevention) and therefore increase the safety for Vopak's workforce.

Vopak also created a corporate venture capital function. Leo Brand is the founder and chair of the Vopak Venture Board, through which the company makes strategic investments in startups. Vopak Ventures is investing in Energy Dome, a provider of large scale and long duration energy storage. Energy Dome enables the utilization of renewable energy by rendering solar and wind power dispatchable through CO2 Battery.

The digital transformation serves multiple strategic purposes. First, it improves safety—sensors detect problems before they become incidents. Second, it increases efficiency—automated processes reduce costs and errors. Third, it creates customer value—clients get better visibility into their inventory and operations. Fourth, it builds competitive moats—custom technology cannot be purchased by competitors.

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XI. The Business Model Deep Dive

Koninklijke Vopak N.V., an independent tank storage company, stores and handles liquid chemicals, gases, and oil products to the energy and manufacturing markets worldwide. It operates gas, industrial, chemical, and oil terminals; and owns and operates facilities consisting of tanks, jetties, truck loading stations, and pipelines. The company also stores and handles chemicals, such as methanol, xylenes, styrene, alpha olefins, and mono-ethylene glycol; gas, including liquefied natural gas, liquid petroleum gas, ethylene, butadiene, and ammonia; oil products consisting of crude oil, fuel oil, diesel, jet fuel, gasoline, and naphtha; and vegoils and biofuels comprising ethanol, biodiesel, and sustainable aviation fuel. In addition, it is involved in the development of infrastructure solutions for low-carbon and renewable hydrogen, CO2, battery energy storage, and sustainable fuels and feedstocks.

Revenue Model:

Vopak generates revenue primarily through storage fees—customers pay for the right to store products in Vopak's tanks for defined periods. Additional revenue comes from throughput fees (charges based on volumes moved through the terminal), handling services (loading/unloading ships and trucks), and value-added services (blending, heating, quality testing).

The contract structures matter enormously. Long-term contracts—common for industrial terminals connected to customer facilities—provide revenue visibility extending years into the future. Shorter-term contracts at hub terminals offer flexibility to capture pricing upside when markets tighten.

Key Success Factors:

1. Location Quality: Terminals at major trading hubs (Rotterdam, Singapore, Fujairah, Houston) command premium pricing because customers have limited alternatives. New construction is either impossible (land constraints) or prohibitively expensive.

2. Customer Relationships: Oil majors, chemical companies, and trading houses value reliability above all else. A storage provider that handles their products safely for decades earns trust that new entrants cannot easily replicate.

3. Operational Excellence: Tank storage involves hazardous materials—a single incident can cause regulatory shutdown, environmental damage, and reputational harm. Companies with strong safety records maintain their operating licenses and customer trust.

4. Capital Efficiency: The business requires substantial upfront investment but generates stable cash flows for decades. Companies that deploy capital wisely—building in the right locations with long-term customer commitments—earn returns well above their cost of capital.

Competitive Position:

Based on total capacity, the biggest players are located in China with Sinopec, CNPC and PetroChina, followed by US with Kinder Morgan, Buckeye, Marathon, Enterprise and Magellan and Europe with Vopak and Oiltanking. In Europe, the top 3 biggest players are 1) Vopak, 2) Oiltanking and 3) CLH. These companies are also publicly owned and have a broad international coverage which means they have a global storage footprint.

Vopak is an independent storage player with a long history dating back to the early 16th century. Independent means it does not own the oil products it stores. It therefore holds an independent position in the market unlike for instance Sinopec and CNPC.

This independence creates a competitive advantage. Oil companies and traders can use Vopak facilities without worrying about conflicts of interest—their storage provider isn't competing with them in product markets.

Other significant European independent operators of tank terminals are Oiltanking (owned by Marquard & Bahls) and VTTI (owned by Vitol: 45%, IFM Investors: 45%, and the Abu Dhabi National Oil Company (ADNOC): 10%).

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XII. Leadership Profile: Dick Richelle

The Supervisory Board of Royal Vopak announced the upcoming succession of Eelco Hoekstra after having served 11 years as Chairman of the Executive Board and CEO of Royal Vopak. The Supervisory Board nominated Dick Richelle to become Chairman of the Executive Board and take over as CEO as per 1 January 2022.

Dick Richelle was appointed Chairman of the Executive Board & CEO of Royal Vopak in Rotterdam as per the 1st of January 2022. Dick has over 25 years of experience and in-depth knowledge of the industry. He started his career with Royal Vopak in 1995 as a management trainee and served in a variety of management and leadership roles across all continents. In the past 12 years, he was successively President of the divisions Americas, Asia & Middle East and Global Commercial and Business Development. In these capacities, prior to his appointment as Chairman of the Executive Board, Dick has already been a member of the Strategic Committee of Royal Vopak since 2009. Dick holds a degree in Business Economics from Erasmus University, Rotterdam, The Netherlands.

Richelle represents the quintessential company lifer who earned the top job through demonstrated performance across geographies and functions. His tenure leading the Asia & Middle East division gave him firsthand experience of growth markets, while his time heading Global Commercial & Business Development exposed him to customer relationships and strategic opportunities worldwide.

Dick has shown strong leadership and people skills in his current and former roles. His extensive experience in nearly all geographies in a variety of functions at Royal Vopak will enable him to be an effective CEO leading Royal Vopak in the coming periods.

Since taking the helm, Richelle has maintained strategic continuity while accelerating execution. CEO Dick Richelle stated: "Building on our proven track record of strategic execution, we have delivered an improved cash return and committed EUR 1 billion capex target to grow in industrial and gas terminals, reaching our target ahead of schedule. This positions Vopak with confidence to capture additional growth opportunities in gas and industrial infrastructure as well as infrastructure for the energy transition. Our resilient business model, driven by our 'Improve, Grow, Accelerate' strategy, provides a strong foundation for future growth."

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XIII. Shareholder Structure & Corporate Governance

The ownership structure of Vopak is dominated by a single shareholder whose patience and long-term orientation have shaped company strategy.

Looking at our data, we can see that the largest shareholder is HAL Investments B.V. with 52% of shares outstanding. This implies that they have majority interest control of the future of the company.

Vopak is listed on the Euronext stock exchange in Amsterdam (value of HAL's ownership interest at the end of 2024: €2,573 million).

HAL Trust is itself a Dutch holding company with a focus on long-term value creation through strategic investments. The firm owns stakes in roughly 30 companies, spanning various industries, with a particular emphasis on maritime (sea-related) services. The two flagship companies in HAL's portfolio are: Boskalis specializes in dredging and offshore energy.

Vopak, another key holding, is the world's largest independent terminal owner, strategically located in major ports like Rotterdam, Los Angeles, and Shanghai. Focus: Stores oil, gas, chemicals, and new energy solutions like LNG and CO2. Profitability: Delivers very high net profit margins of over 30%.

The HAL ownership creates an unusual governance dynamic. With majority control in private hands, Vopak can pursue long-term strategies without pressure from activist shareholders focused on near-term returns. The flip side: minority shareholders have limited ability to influence major decisions if they disagree with management or the controlling shareholder.

As a result of shares purchased by Vopak during the first half year of 2024 (€191 million), HAL's effective ownership interest in Vopak increased from 48.15% to 50.25% on June 30, 2024.

The share buyback programs that Vopak has pursued effectively concentrate ownership—as the company retires shares, HAL's proportional stake increases. This alignment between the controlling shareholder's interests and the company's capital allocation decisions is notable.

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XIV. Recent Performance & India IPO (2025)

The most significant recent development involved Vopak's Indian joint venture. AVTL has successfully completed its IPO. The issue price for the IPO was INR 235 per share which is at the top end of the previously announced price band. The size of the primary equity issue is INR 2,800 crore (approximately EUR 290 million).

The board of AVTL issued an equivalent of 10.75% of new equity shares. As a result of the issuance of new shares, Vopak's shareholding reduced from 47.31% to 42.23%. AVTL commenced trading on Monday 2 June 2025, at the National Stock Exchange of India Limited and BSE Limited.

The IPO successfully crystallizes value for Vopak shareholders and strongly supports Vopak's strategy of expanding our portfolio of gas and industrial terminals. The transaction resulted in an exceptional dilution gain for Vopak of approximately EUR 110 million to be recorded in Q2 2025 financials.

In India, our joint venture AVTL is now publicly listed, which is unlocking its value and providing funds for future growth such as the recently announced development of India's first independent ammonia terminal. Capacity expansions in India, with LPG capacity commissioned in multiple locations underscores the need for our infrastructure in a growing market.

The AVTL IPO demonstrates a sophisticated approach to capital recycling. Rather than selling the stake outright, Vopak maintained significant ownership while unlocking value through the public markets. The €110 million dilution gain and AVTL's access to public market capital for growth both benefit Vopak shareholders.

Financial Performance:

Revenues remained stable year-on-year at EUR 973 million YTD Q3 2025 (YTD Q3 2024: EUR 979 million) supported by healthy demand for storage infrastructure across different geographies and markets underpinned by a continued strong occupancy rate of 91%.

Net profit attributable to holders of ordinary shares increased by EUR 95 million to EUR 407 million YTD Q3 2025 compared to EUR 312 million YTD Q3 2024. A dilution gain of EUR 113 million reported in Other operating income as a result of the listing of our AVTL joint venture was mainly driving the year-on-year increase. Earnings Per Share (EPS) YTD Q3 2025 was EUR 3.51 compared to EUR 2.56 YTD Q3 2024, reflecting higher net profit and a lower number of shares following the cancellation of shares after the completion of the share buyback programs of 2024 and 2025.

2025 share buyback program of up to EUR 100 million announced on 19 February 2025, was completed on 28 July 2025. A total of 2,551,949 ordinary shares, 2.17% of the company's outstanding shares, were repurchased, at an average price of EUR 39.19 per share.

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XV. Competitive Analysis & Industry Dynamics

Porter's Five Forces Analysis:

Threat of New Entrants: LOW Building new tank terminals requires massive capital investment, environmental permits that take years to obtain, and customer relationships that incumbents have cultivated for decades. In established port areas like Rotterdam and Singapore, available land is essentially non-existent. New entrants face an almost insurmountable challenge.

Bargaining Power of Suppliers: LOW Tank terminals purchase commodity inputs—steel, concrete, equipment. Multiple suppliers compete for these contracts. Labor is the most significant cost, and terminal operators don't face the kind of skilled labor constraints that affect some infrastructure businesses.

Bargaining Power of Buyers: MODERATE Large oil companies and chemical producers have some negotiating power, particularly at locations where multiple storage providers compete. However, at hub locations with limited capacity, customers have little choice—they must accept market pricing to secure space.

Threat of Substitutes: LOW There is no substitute for tank storage. Products must be stored somewhere between production and consumption. The only "substitute" would be customers building their own storage—but this requires expertise and capital most prefer to outsource.

Competitive Rivalry: MODERATE Competition varies by location. Hub terminals face limited competition due to capacity constraints. Import/export terminals in competitive markets face more pressure on pricing and utilization.

Hamilton Helmer's 7 Powers Framework:

Scale Economies: Tank storage exhibits modest scale economies. Larger terminals spread fixed costs across more capacity, but the advantages are limited—this isn't a winner-take-all business.

Network Effects: Limited direct network effects, but a global terminal network creates value for customers who need storage across multiple locations.

Counter-Positioning: Vopak's independence (not owning products) positions it differently from integrated oil companies—traders and producers can use Vopak without competitive conflict.

Switching Costs: High for industrial terminals (pipelines connect to customer facilities). Moderate for hub terminals (customers can shift storage but face transaction costs and relationship risks).

Branding: Vopak's 400-year history creates trust that new entrants cannot replicate. Safety records and operational reliability build reputation over decades.

Cornered Resource: Prime locations in Rotterdam, Singapore, and other strategic ports represent genuinely scarce resources that Vopak controls.

Process Power: Digital transformation and operational excellence create efficiency advantages that take years for competitors to replicate.

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XVI. Key Risks & Investment Considerations

MYTH VS. REALITY: Energy Transition Threat

Myth: The shift away from fossil fuels will destroy demand for tank storage.

Reality: The energy transition creates winners and losers within the tank storage sector. LNG infrastructure becomes more valuable as countries seek to diversify energy supplies. Ammonia storage gains importance as a hydrogen carrier. Battery storage represents an entirely new business line. Oil storage at trading hubs maintains value because hydrocarbons remain essential for decades. The companies at greatest risk are those with single-product exposure in declining markets—not diversified operators like Vopak.

Key Risks:

1. Concentration Risk: HAL Investments B.V. is the largest shareholder with approximately 50% of shares outstanding. This implies they have majority interest control of the future of the company. Minority shareholders have limited voice.

2. Execution Risk on Energy Transition: Vopak's €1 billion commitment to energy transition infrastructure involves new technologies and markets where the company lacks historical experience. Battery storage, hydrogen, and ammonia are different from traditional liquid storage.

3. Regulatory Risk: Tank terminals store hazardous materials. Environmental regulations can increase costs or restrict operations. The Groningen gas field shutdown in the Netherlands illustrates how political decisions can reshape energy infrastructure economics.

4. Currency Risk: With operations in 23 countries, Vopak faces significant currency translation effects. The company reports in euros but earns revenue in dollars, renminbi, and other currencies.

5. Customer Concentration: While Vopak serves diverse customers, major oil companies and traders represent significant revenue shares. Industry consolidation could reduce the number of potential customers.

Key KPIs to Track:

1. Proportional Operating Cash Return: This metric measures cash generation relative to capital employed. Management has targeted >13%. Vopak raised its operating cash return target to over 13%, up from the previous goal of above 12%. This adjustment follows a year-on-year improvement, with the metric reaching 15.1% in 2024. Sustained returns above 13% would validate capital allocation decisions.

2. Occupancy Rate: Proportional occupancy rate in YTD Q3 2025 remained at stable high levels of 91% (YTD Q3 2024: 92%) reflecting a continued strong demand for infrastructure services. High occupancy indicates pricing power; declining occupancy signals competitive pressure.

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XVII. Bull and Bear Cases

Bull Case:

The bull case rests on three pillars. First, Vopak's portfolio transformation has positioned the company to earn returns well above its cost of capital by concentrating in locations and asset types with structural competitive advantages. The 2014 strategic reset is paying dividends in financial performance.

Second, the energy transition creates more opportunity than risk. LNG infrastructure is essential for European energy security. Ammonia becomes a major hydrogen carrier. Battery storage represents a new €1 billion opportunity. Vopak's diversification across these areas hedges against uncertainty about which technologies will win.

Third, the company's digital transformation has created operational advantages that competitors cannot easily replicate. Custom software, IoT integration, and data analytics improve safety, efficiency, and customer service—translating into pricing power and customer retention.

At current valuations, investors receive a 3.5% dividend yield with a progressive dividend policy, share buyback support, and exposure to long-duration infrastructure assets with 400 years of operational heritage.

Bear Case:

The bear case emphasizes structural challenges and execution risks. First, the energy transition—while creating opportunities—also threatens Vopak's core oil storage business. If electrification proceeds faster than expected, demand for petroleum storage could decline more rapidly than new business lines grow.

Second, the controlling shareholder structure limits minority shareholder influence. HAL Trust's interests may not always align with public shareholders, and there's limited ability to force strategic changes.

Third, new energy investments involve technologies and markets where Vopak lacks historical competitive advantage. Battery storage is a different business from liquid storage; success isn't guaranteed. The €1 billion commitment represents significant capital at risk in unproven areas.

Finally, the stock has experienced volatility—VPK stock has fallen by −6.67% compared to the previous week, with a −9.79% decrease over the last year—suggesting the market may be questioning growth prospects or valuation.

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XVIII. Conclusion: A Company That Stores More Than Products

Royal Vopak stores something beyond oil, chemicals, and gas. It stores four centuries of institutional knowledge about how to occupy strategic positions in global trade and maintain them across technological revolutions.

From weighing tea and spices for the Dutch East India Company to building Europe's first LNG terminals, from storing petroleum in Rotterdam to developing battery storage in Texas, Vopak has demonstrated an unusual capacity for reinvention within a consistent framework. The framework: own essential infrastructure at strategic locations, serve customers as an independent partner rather than a competitor, and maintain the operational excellence that keeps hazardous materials safely contained.

The current strategic direction—"Improve, Grow, Accelerate"—captures this philosophy. Improve returns on existing assets through operational excellence and portfolio optimization. Grow in industrial and gas terminals where structural demand is rising. Accelerate into energy transition infrastructure where new opportunities are emerging.

For long-term investors, Vopak offers exposure to essential infrastructure with characteristics that are difficult to replicate: locations that took centuries to develop, customer relationships built on decades of reliable service, and operational capabilities refined across generations. The company won't double overnight, but neither will it disappear. In a world of rapid technological change and uncertain energy transitions, that stability has value.

The Dutch warehouse masters who began storing goods in 1616 could never have imagined LNG terminals or battery storage systems. But they understood something that remains true today: every ship that arrives in port, every factory that needs feedstocks, every trader who holds inventory, requires safe and reliable storage. That simple truth has sustained Vopak for 400 years. It seems likely to sustain the company for many more.