Bergen: One of the leading players in the open hatch segment, Bergen-based Grieg Star, a part of the Grieg Group, is well positioned in the event of a market recovery.
Camilla Grieg, group ceo, has a positive outlook on both dry bulk and the open hatch segment long-term.
“The sectors we are doing business in are exciting,” she tells Maritime CEO. “We have done well in bulk for a long time, although in the past we preferred to operate, rather than owning ships. For a player of our size we are definitely entering this market in a big way with six supramaxes and purchase options on some vessels on period charter.”
Two supramaxes hit the water last year while Grieg Star will take delivery of four more vessels in 2015.
Camilla is group ceo while her sister Elisabeth fronts Grieg International, a private equity (PE) division within the diverse group.
“We are into other segments than our operative business and there’s been massive interest in private equity. Investment companies are seeing no slow down among private equity players’ hunger for shipping”, she laughs, while explaining, “It might be stirring some frustration for more long term players, as now everyone wants to go into dry bulk.”
As for the open hatch business, a sector Grieg Star is a leading player in, Grieg says this area is very competitive and has been for some time.
She says open hatches are a “niche market”, but when Korea’s STX Pan Ocean (now rebranded back to its original name, Pan Ocean) ordered 20 open hatch vessels to carry cargo for Brazil’s Fibria Celulose, this changed the balance in the sector.
Fortunately for Grieg Star, and others, the debt ridden Korean company had to restructure and only five of the 57,000 dwt open hatch ships hit the water. Gearbulk is the biggest player in the segment, followed by Grieg Star, Saga and Westfal Larsen – all Northern European firms which dominate the highly competitive South American wood pulp transportation market.
The Grieg Group delivered positive results for 2013, despite continued weak freight rates. In a market darkened by overcapacity and fierce competition, the group was boosted from its seafood division where salmon prices skyrocketed to an all-time high. Grieg Star contributed positively to group results last year too, with a pre-tax profit of $22m.
Grieg Star’s fleet is in the middle of its biggest ever newbuilding program, investing a total of $650m. Owning a total fleet of 34 modern ships and operating another 15 to 20 ships on an annual basis, the company is increasingly moving to fix its ships for long-term contracts of affreightment. So far, 12 of 16 newbuildings are delivered. In addition, the group has purchase options on four additional vessels.
Grieg Group has a handful of companies under its umbrella including property and marine logistics. In the latter section focus in recent years has been on developing ship services and logistics activities, and expanding operations in the Norwegian port of Narvik. The group is celebrating 130 years in business this year. [09/05/14]
NEED TO KNOW: Grieg Group
Turning 130 this year, one of the blue chip names in Norway maritime. Grieg is a shipowner plus is involved in shipbroking, maritime services, port operations, seafood, investments and finance.