Singapore: Rounding out our week celebrating 200 interviews on Maritime CEO we bring our normal Friday focus to the top of the maritime food chain, the shipowner. Every Friday readers of this site are guaranteed a profile of a shipowner. Below are 10 of the picks from the past quarter.
Harry Banga graced the cover of the debut issue of Maritime CEO magazine two months ago, in what has been one of the shipping exclusives of the year. The former deputy head of the Noble Group is pumping $1bn into a new firm, Caravel Group, created with his sons, Guneet and Angad, that will concentrate on investment management activities, strategic asset ownership and the movement and storage of dry bulk raw materials. The company officially launches today with a big cocktail reception at the Four Seasons in Hong Kong.
Caravel is based on three pillars of business. The first is in investments – an asset management and private equity platform, the second is putting all of Caravel’s logistics operations – such as shipowning and shipmanagement – under one umbrella, while the final part is in commodities.
On shipowning, Banga said Caravel will look at the second hand market as well as readying a raft of newbuild contracts which are expected to be signed soon. A letter of intent on a new shipbuilding program has been signed, and is expected to become reality very shortly.
Staying in Hong Kong, the chairman of the BW Group, Dr Helmut Sohmen did not mince his words when interviewed by Maritime CEO.
“The markets are terrible,” the Austrian national said. “There’s more and more owners hoping against hope.”
Sohmen reckoned that the current doldrums will stretch for another “two to three years”. Overcapacity is his main worry.
Not helping the overcapacity is the sudden rush of orders, noted another Hong Kong resident, Jack Hsu, managing director of Oak Maritime.
“Owners are coming into the market and putting their orders in at this pricing,” he noted. “Yes, there is an argument that pricing has bottomed and that is obviously the cause for owners to come in but from an economic cash flow sustainability perspective I don't think it has hit the right numbers yet.”
On the likelihood of obsolescence hitting the market, Hsu was forthright, saying it is less about technology, but more about economics.
“It is all about pulling out a pencil and paper with a ruler and just calculating what makes sense economically,” he said.
Among many scoops by this site, a couple of months ago we interviewed the largest shipowner in the Middle East.
Saleh Al-Jasser, ceo of Bahri, described how the fleet mix of Bahri (also known as the National Shipping Company of Saudi Arabia) has been changing dramatically, and not just because of the merger with fellow Saudi shipowner Vela 11 months ago.
Bahri’s current fleet consists of 17 VLCCs, 23 chemical tankers and four general cargo ships. On order is a large chemical tanker, three general cargo ships and five bulkers, the first time Bahri has entered the dry bulk game.
A number of older general cargo vessels have been sold this year to be replaced by new multipurpose ships.
“The company’s first dry bulk vessel will come on stream from November 2013,” said Al-Jasser, adding: “In the last two years we have almost doubled the size of our chemical tankers fleet.”
Using his experience from the Middle East in a new climate is Nicholas Fisher. The new ceo of Singapore’s Masterbulk intends to diversify the company just like he did while in charge of Oman Shipping Company.
“Diversification in dry bulk activities will be key for the Masterbulk’s business going forward,” Fisher told Maritime CEO. Plans for the medium term include strengthening the company’s position in the forest products market.â€¨ Masterbulk owns 20 open hatch gantry crane vessels
Any shipowner roundup would not be complete without a trip to Greece. The remarkable turnaround in fortunes in Greece’s Star Bulk Carriers Corp is set to unleash a period of fleet expansion. Led by Spyros Capralos, the New York-listed firm has undergone debt restructuring and is now raising capital. Its market cap has gone from a low of just $30m to its current healthy standing of $200m, a figure that is likely to rise if the current nascent capesize bullrun continues, something Capralos is cautiously confident it will.
“The cape rally came faster than people expected,” Capralos admitted at end September, cautioning however that this ship segment is notoriously volatile.
The fundamentals of the sector are better, he reckoned. “Oversupply is over and demand continues to be healthy. The fundamentals are there for a healthy market but there is a risk owners will start ordering,” he said.
Maritime CEO spent a lot of time in the past few months in the Norwegian capital canvassing leading names in shipping.
Whoever said shipping is dead failed to look at announcements coming out of Oslo of late. The Oslo Bourse has been busy, the BW Group moved to list its LPG division, the floating assets of Hoegh LNG were also put up for an IPO, while Western Bulk jumped ahead of the queue a launch on the bourse. Western Bulk ceo Jens Ismar said: “The market is levelling out, touching the bottom, and we see a gradual improvement. The demand side is holding up reasonably well.”
In terms of taking on new ships, Ismar said now is a “good time”.
“Prices are low from a historic perspective. We will not see the boom from 2006 and 2007, but there is room for sensible growth,” he reckoned.
Elsewhere, Norwegian Car Carriers (NOCC) is hunting down tonnage, the head of the Oslo-listed company told Maritime CEO recently.
Engebret Dahm, ceo of NOCC, revealed: “We are on a continuous basis considering new acquisitions to continue the ongoing renewal of our fleet.”
Unlike other shipping sectors Dahm reckoned the car carrier segment is “fairly balanced”.
“Tonnage redelivered by Korean charters in May/June was quickly absorbed in the market,” he noted, adding: “Important drivers in the car carrier market ahead in time are amongst others the development in the European economy and European car imports and secondly the effect of the weaker Yen on Japanese car exports”
When in Norway, it’s mandatory to see what Frontline is up to and we paid a call on Fredriksen stalwart Jens Martin Jensen to check out what new vehicle Frontline 2012 is up to.
“We have invested in the product, LPG and dry bulk market,” Jensen told Maritime CEO.
“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,” said Jensen.
In the space of just 20 months Frontline 2012 has invested in excess of $2.2bn.
“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.
Finally, in our Oslo get together we caught up with one of Scandinavia’s richest men, Arne Blystad, a grand name in Norwegian shipping that has learnt from previous downturns how to get through tough times.
“This downturn,” he said, “has taught us that it is important to have control over your own destiny without too much debt.”
Wise words for fellow owners. [01/11/13]