Kaptanoglu Holding: Is the current supply/demand imbalance the new normal?

Istanbul: Is the current supply/demand imbalance across many shipping sectors the new normal? That’s the question posed by Sadan Kaptanoglu, Turkey’s most famous woman in shipping, in today’s Maritime CEO interview. A board member at the eponymous family conglomerate, Kaptanoglu says of the current dry bulk market that recovery expectations have failed so far and no strong development is expected.

“Maybe this is the new normal,” she muses, before noting optimistically that the demand side just passed the supply side in dry bulk for the first time in six years so there is, she says, “a possibility of a small window of a better market until the new orders start to be delivered in 2016”.

Tankers, meanwhile, are moving up “slowly but steadily”. Kaptanoglu is optimistic about aframaxes and the chemical market.

While the chemical tanker fleet is expected to increase from 41m dwt to 59m dwt in the coming 18 months, the total chemical trades are expected to jump from 151m tons to 215m tons by the end of next year, she says. Similarly the product tanker fleet will grow around 50% in the same time frame but demand should grow more.

The diverse Kaptanoglu fleet is made up of two kamsarmaxes and one handysize on the dry bulk front while in tankers it has two aframaxes, one MR tanker and three other differing sized product tankers plus three chemical tankers.

“We see very volatile markets and we have always be known as conservative traditional shipowner,” says Kaptanoglu, herself the fourth generation of the family at the helm of this famous name in Turkish shipping. “At one point we will invest but since the money we will invest is solely ours we will be very careful about it.”

She thinks the demand side of the equation is okay but is worried about the supply side.

“As our fellow shipowners and investors continue to order there will be no continuous improvements in the market and, if this is the new normal, then except the asset players, there will be not enough windows for healthy returns,” she warns.

As well as being a shipowner the Kaptanoglu group has a couple of shipyards, one for yachts and one for commercial shipbuilding and repair. The latter, called Desan, is one of the best known repair yards in Turkey, which has in the past year also returned to shipbuilding, constructing a platform supply vessel for a Norwegian owner.

“We are now expending in Tuzla, the main area for yards around Istanbul, so that our ship repair services will not be affected,” Kaptanoglu says.

Turkey’s yards scene is currently flourishing after years of stagnation.

“Turkey is the address for vessels who do not want to do the Far East,” Kaptanoglu concludes.  [15/08/14]