BW Group: Stop ordering new ships

BW Group: Stop ordering new ships

Hong Kong: Few opinions in shipping are more keenly sought than Dr Helmut Sohmen’s, the chairman of the BW Group, and one of the most powerful and best respected names in the industry. That being the case, then we had better brace ourselves for more troubled times.

“The markets are terrible,” the Austrian national says from his Hong Kong island office. “There’s more and more owners hoping against hope.”

Sohmen reckons that the current doldrums will stretch for another “two to three years”. Overcapacity is his main worry.

Despite temptingly low prices on offer BW Group has by and large avoided the newbuild market, Sohmen says, dealing more in the second hand market such as its decision to buy out the Maersk LNG fleet or its offloading of a number of crude carriers.

“We are not adding to the existing tonnage,” Sohmen says, before adding pointedly, “We are not financially stretched like some of our competitors.”

Sohmen, 73, has been through enough shipping cycles to know when and when not to order new ships, and the lure of much touted eco-ships today will not force him to bring out his cheque book.

“Technology is moving so fast, catapulting ahead,” he says, “ so that when better times come a few years from now, today’s eco-ships might not be as fuel efficient as we think in three years time. Ships being built today might look a little elderly more quickly.”

Sohmen is clearly aghast at all the recent ordering of ships and surprised at banks’ willingness to fund this additional overcapacity.

“Banks seem to be willing to finance newbuild orders when knowing there is overcapacity in the market, he says in a surprised tone. “Either they don’t have the right market information or perhaps they’re trying to protect their books,” he adds. Either way they’re unlikely to see too much of BW in the coming months.

 

NEED TO KNOW:   BW Group

Operates a fleet of 94 owned, part-owned or controlled vessels including tankers, LNG and LPG carriers, and FPSOs. World-Wide, founded in 1955 in Hong Kong by Sir Y.K. Pao, became the world’s largest shipowner by 1979. Helmut Sohmen became chairman in 1986 and took over Norway’s Bergesen in 2003 and rebranded firm as BW. Son Andreas Sohmen-Pao is ceo.

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