High Finance: This Man Ludwig

Most self-made men begin their impatient climb to wealth as teenagers; Daniel Keith Ludwig could not wait that long. As a nine-year-old in South Haven, Mich., he bought a sunken 26-ft. boat for $75, raised and repaired it, then chartered it for twice the price. He has not stopped since. Now a youthful-looking 66, D. K. Ludwig is the world’s biggest individual ship operator, commanding a tanker fleet that can carry 2,500,000 tons. As if that were not enough the lean, frugal and publicity-shy Ludwig mines salt in Mexico, refines oil in Panama, raises cattle in Venezuela. He is worth $350 million—give or take $100 million.

Last week word got out of yet another Ludwig enterprise. Quietly investing $100,500,000, he has bought 15% of California’s Union Oil, a $468 million-a-year giant that has oil, gas and petrochemical holdings from Louisiana to Australia and owns 33% of Maruzen Oil Co., Japan’s third largest refiner and marketer. Ludwig bought the stock from Phillips Petroleum, which had been blocked by U.S. trustbusters from absorbing Union Oil but happily gained a $46 million pretax profit on the sale. The deal makes Ludwig the largest single stockholder in Union Oil, and though he denies any immediate aim to ship its oil in his tankers, envious competitors note that the two interests make a handsome pair.

Novel Methods. Ludwig’s holdings usually mate in some way. His refinery in Panama—co-owned with Continental Oil, and probably the biggest investment there since the canal—processes oil from the tankers of his National Bulk Carriers and other Ludwig lines. Recently Ludwig planted 1,000,000 orange, lemon and lime trees in Panama; now he is carving out a port near the plantation, intends to freeze and can the juice right on board one of his ships. All these interests have naturally steered him into real estate, and he has property holdings from mid-Manhattan to Bermuda, where he is building a new hotel.

Despite his early start in business (he went only as far as the eighth grade in school, but studied math nights as a teen-ager), Ludwig did not succeed in a big way until he was close to 40. The Depression washed out what little he had made in the ’20s by buying war-surplus ships for charter, and a shipboard explosion left him with a painful back injury similar to President Kennedy’s (it was cured in a risky operation a decade ago). In the mid-1930s, as the shipping market grew stronger, Ludwig broke through with a novel financing plan: he persuaded Manhattan banks to back his purchase of dry-cargo ships, then converted them into tankers and chartered them to oil companies, using the charter contracts as collateral for the loans. Ludwig built his own ships in World War II, and in 1951 leased the

Imperial Japanese Navy shipyards at Kure at the incredible bargain rate of $8,400 a year, plus his promise to use Japanese steel and low-wage Japanese workers.

Wellhead to Pump. Always an innovator, Ludwig devised ways to spare dollars and swell loads by welding tankers instead of riveting them, launching them sideways, and using thinner decks. In all, Kure has built 2,200,000 tons of shipping for Ludwig, including the 114,500-ton supertanker Universe Apollo. When the tanker market became swamped, Ludwig last year subleased the yard, but Japanese aides still hold in awe the thrusting man who, as one says, “knew every detail and kept our brains spinning.”

Some observers reckon that Ludwig would like to fashion a fully integrated oil complex—wellheads, tankers, pumps. Doing things, not basking in the glow of achievement, seems to be his goal. Like Industrialist Howard Hughes, he is usually inaccessible, rarely interviewed, seldom seen even by his lawyer. His off-hours, like any suburbanite’s, are invested in fighting the crabgrass on the lawn of his modest home in Darien, Conn., where he lives with his second wife (he has one stepson). Early-morning commuters do not recognize this unobtrusive suburbanite for one of the world’s wealthiest men. About the only place that Ludwig’s wealth shows through is aboard his $2,000,000 yacht Danginn, on which he occasionally likes to entertain movie stars and other celebrities while he lingers over a mild drink or soberly sips buttermilk.