Pacific Basin looks to expand its fleet
Mar-28-2013 By : agxadmin
The dry bulk operator Pacific Basin Shipping is planning to expand its fleet, even though the dry bulk market is likely to remain challenging in 2013, according to Chief Executive Mats Berglund. The firm, which has USD753 million for vessel acquisitions, has already spent USD122 million since September to acquire eight dry bulk ships. These comprise seven second-hand Handysize and Handymax vessels and a new Handysize which was sold by a shipyard after the original owner failed to take delivery. Berglund said the firm’s two key objectives were to buy “more Handysize and Handymax ships at attractive prices” and expand its customer and cargo base. He confirmed that the company has sold its 45% interest in a cargo terminal in Nanjing, which it bought for USD16 million in 2007, as part of a continuing disposal of non-core assets. Executive Director Wang Chunlin, who was recruited to develop the ports business, will step down at the annual meeting in April. Berglund said Pacific Basin, one of the world’s biggest operators of Handysize and Handymax vessels, with 172 owned and chartered ships, outperformed the Baltic Handysize index by 44% last year, thanks to higher charter earnings particularly on return voyages, its large fleet and strong links with charterers. However, overall daily charter rates were still down, by 22% to 23% last year, which reflected continued weakness in the dry bulk market, Berglund said. He added the firm was also expanding its towage business in Australia, with the launch of harbor towage operations in Newcastle later this year using tugs redeployed from the Middle East. Pacific Basin was also “well positioned to win more business” on Australia’s liquefied natural gas projects, where the firm is providing construction support and towage on the Gorgon project and is eyeing Chevron’s Wheatstone LNG development. Overall, the firm reported a USD158.5 million net loss last year from a USD32 million net profit in 2011. This included a USD199 million write-down on its ferry business, the South China Morning Post reports.
YPSN: Maritime industry needs future direction in Hong Kong
By : agxadmin
A blueprint setting out the future direction of Hong Kong’s maritime industry should be prepared and the government should then commit to implementing the plan if Hong Kong is to stave-off competition from other regional shipping sectors. The proposal, which includes signing more double tax agreements with potential trading partners, tax incentives for companies planning to incorporate in Hong Kong, and subsidized training, was made by the directors of the Young Professionals in Shipping Network (YPSN). “The government needs to first commit to a plan for the industry,” said Su Yin Anand, one of the group’s three Directors. “After that, an independent Ministry for Transport covering maritime, logistics, and aviation should be set up to focus on developing these industries. Anand said increasing costs and lack of talent were among the challenges facing Hong Kong’s maritime sector. Another was lack of government support in promoting the city as a transport hub, resulting in Hong Kong being eclipsed by Singapore, Shenzhen and Shanghai. Co-founder Tabitha Logan said the government had recently begun to take note of the maritime sector in Hong Kong. The group’s third Director, Marija Pospisil said that to attract and retain the best talents to the sector, both locally and from abroad, more effort should be made to promote shipping as one of the pillars of Hong Kong’s economy. Hong Kong owners, operators and managers control about 10% of the world’s merchant tonnage, while the Hong Kong shipping register is the world’s fourth-largest with ships totaling 80 million gross tons flying the Hong Kong flag. Reports are expected on ways to develop Hong Kong as an international maritime center, a Hong Kong 2030 port master plan, and on Hong Kong’s role as a regional distribution center, all by consultant BMT Asia Pacific. The maritime center report was already submitted to the Transport and Housing Bureau while the other two are expected to be lodged with the Port Development Council and Trade Development Council later this year. The young professionals said it was too early to say if there had been a change in the government’s attitude to the maritime sector since Leung Chun-ying became Chief Executive “though there have been positive indications”.
China Merchants Group sees no end yet to slack in dry bulk cargo
By : agxadmin
The business woes of dry bulk cargo shippers are unlikely to end this year because of excess capacity, according to the Chairman of the China Merchants Group, Fu Yuning. “The dry bulk cargo shipping sector will still be under pressure,” Fu said. “I don’t expect the problem of excess capacity to improve this year.” Excess capacity has put pressure on freight rates, hurting shipping companies’ profits. He said China Merchants, a state-owned conglomerate which has operations in shipping, ports and property, had no plans to expand its shipping fleet any further this year. But its capacity would continue to increase, because some ships ordered earlier had still to actually join the company’s fleet, he said. Fu said he expected volumes on Pacific routes to improve this year as the European economy had stabilized. “Once global trade picks up slightly, shipping companies should take the chance to rearrange their capacity,” he said, but he added that fuel costs would stay high because of high oil prices. He said he expected China’s exports to increase from last year but achieving 8% growth in foreign trade would not be easy, as uncertainty over the European debt crisis remained.
Weak Western growth to hit cargo demand
By : agxadmin
Shipping executive says despite higher container rates, 2013 will be as difficult as last year. Anaemic growth in the U.S. and little improvement in Europe’s economic conditions will make 2013 as “challenging” as last year for Orient Overseas Container Line (OOCL), Ken Cambie, Chief Financial Officer of Orient Overseas (International) (OOIL), said. First-quarter cargo demand was as difficult as 2012 although container rates were higher than this time last year. He said OOCL was looking to increase rates in the coming months as cargo contracts are renewed with freight owners on transpacific and Asia-Europe trades and general rate rises are implemented. Asked if there was concern cargo owners could resist rate rises, Cambie said OOCL was seeing a typically seasonal pattern with a weak January and this was expected to be followed by a stronger spring and summer. Cambie said Søren Skou, Chief Executive of Maersk Line, the world’s largest container shipping company, expected freight rates will be higher in 2013 than last year. Cambie confirmed that the average load factor on OOCL’s fleet of 98 ships fell to 73%, down 3 percentage point compared with 2011. But the firm was “quite happy to take 73% and be profitable rather than 90% and be losing money,” he said. OOIL’s net profit climbed 63% to USD296.4 million last year, up from USD181.6 million in 2011. Revenue climbed to USD6.46 billion, up from USD6 billion in 2011. Net profit at OOCL more than doubled to USD197.2 million last year compared with USD86 million in 2011. OOCL posted a second half operating profit of USD111 million against a USD38.3 million operating loss in the second half of 2011.
Hutchison acquires container terminal from DP World
By : agxadmin
Hutchison Port Holdings Trust acquired Asia Container Terminal from DP World and a unit of PSA International for HKD3.2 billion in cash. The purchase will help Hutchison Port boost capacity at Hong Kong after container volumes gained in the past two years, according to Karen Li, Analyst at JPMorgan Chase & Co. DP World is selling its assets in the city as it seeks funds needed for expansion in other markets and shore up its capital. Li Ka-Shing’s Hutchison Whampoa, the world’s second-biggest container port operator, owns 28% of Hutchison Port Holdings. Hutchison Port handled 22.9 million TEU last year at its facilities in Hong Kong and Shenzhen, 5% more than a year earlier. DP World, the world’s third-largest container port operator, sold a 55.2% stake in Asia Container Terminals to Hutchison Port for USD279 million. It also offloaded 75% of its stake in CSX World Terminals Hong Kong and ATL Logistics Center Hong Kong to Goodman Hong Kong Logistics Fund for USD463 million. DP World said it will form a strategic partnership with Goodman Hong Kong to manage Kwai Chung Container Terminal and the ATL Logistics Center, and will continue to manage port operations with completion of the transaction expected at the end of the first half. DP World said it expects to make a net capital gain of USD151 million from the transactions, the Shanghai Daily reports. The deal will enable Hutchison Port Holdings to combine operations at CT8 (West) and CT8 (East), which it already owns through Cosco-HIT. It also agreed to pay HKD750 million to repay existing debt owed by the ACT Holdings group to the affiliates of DP World and PSA. The company is financing the deal from a HKD4 billion term loan agreement. CT8 West has two container berths totaling 740 meters that handled 1 million TEU last year against total handling capacity of 1.4 million TEU. Cosco-HIT’s CT8 East has two berths with a total quay length of 640 m, with a further sea frontage of 448 m for barges.
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