Oslo: In December 2011 shipping’s most famous man, John Fredriksen, cannily played with his assets to create a new firm to ride out the downturn. Frontline 2012 was born with Fredriksen stalwart Jens Martin Jensen taking the reins. As a pure asset play Frontline 2012 has not hung around, taking low prices on offer to snap up bargains in various sectors.
“We have invested in the product, LPG and dry bulk market,” Jensen tells Maritime CEO. In dry bulk the focus has been on capesizes as most recently evidenced this week with a pair of 205,000 dwt bulkers ordered at Bohai Shipbuilding for a very competitive $49m per ship.
“We have already seen the product market firming up and now the VLGC market is strengthening as well and we hope by end 2014 we will see a more balanced capebulk market when our first ship is arriving,” says Jensen.
In the space of just 18 months Frontline 2012 has invested in excess of $2bn.
“The company is currently in the process of concluding one of the most aggressive newbuilding programs ever executed,” Frontline 2012 said in its annual results statement this March. Most of the new carriers will be profitable at rates where “existing tonnage barely covers operating costs,” it said. Some 60 ships are now on order, with fuel efficiency to the fore in terms of design. Fredriksen and his partners including Jensen are betting on a shipping recovery by around 2015 at which point the new owning vehicle, Frontline 2012, should be well placed to reap rewards.
Looking at the ship mix his company has plumped for Jensen says: “I think we have spread ourselves out quite well.”
In terms of which countries Jensen sees growth coming from he picks out the world’s two largest economies, citing product and gas exports out of the US while China will continue to grow at an “impressive” albeit sloer rate.
The demise of a number of Asian shipping companies, especially in China and Korea, could open up opportunities for others, Jensen maintains.
Jensen has been ceo of Frontline Management since 2008, having joined the firm in 2004. Prior to that he was a partner in Island Shipbrokers in Singapore. He started out his career in shipping with the AP Moller Group. [05/07/13]
NEED TO KNOW: Frontline 2012
Founded in December 2011 as both a means to offload unprofitable ships from its parent this John Fredriksen-led shipping vehicle has ordered around 60 ships during the downturn, a tally it is likely to add to in the coming months.