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Monday, 17 December 12
SHIP PRICES TO BOTTOM OUT IN 2013 SAYS GEORGE D. GOURDOMICHALIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 Ship values especially in older tonnage, or even modern vessels with poor quality are expected to fall further during 2013, with the market as a whole predicted to bottom-out next year, creating the ground for a rebound later on. In an exclusive interview with Hellenic Shipping News Worldwide, Mr. George D. Gourdomichalis, Managing Director of G. Bros Maritime S.A. talks about the dry bulk market's potential in 2013, which ship types appear to have the best value-for-money and debates the effectiveness of the new breed of "Eco-Carriers".
The Gourdomichalis family commenced their own shipowning activities in the London shipping market in 1950's. Since then have enjoyed a very high reputation in the shipping industry. Members of the family have kept high positions in various Boards of Directors and other Official Organizations such as being President of the Union of Greek Shipowners. In 1974 the firm's offices moved to Piraeus, Hellas while still maintaining a presence in London. Since 1990, the family's involvement in shipping has also included a joint venture with the Romanian State Company (Petromin). The Gourdomichalis brothers first independent foray into shipowning and shipmanagement activities was with the family sponsored Joint Venture with the Russian State owned Baltic Shipping Co. which operated under the flag of Baltmed Shipping Co.
In 1996, after having wound up Baltmed Shipping Co., the J.V. with Baltic Shipping Co., George and Stathis Gourdomichalis established Gourdomichalis Naftiki Eteria S.A. The establishment of the company manifested the younger generation's strong drive to succeed using its own means and skills. Since its inception in 1996 it has managed a total of six dry cargo ships including Freedom and Handy type vessels. The company has also managed a repossessed vessel on behalf of a bank.
In 2004 all their activities were consolidated into a holding company FREESEAS INC. and managed by Free Bulkers S.A. Freeseas Inc was listed on NASDAQ on December 2005. George Gourdomichalis held the position of President and Chairman and Stathis Gourdomichalis was the Treasurer and Chief Financial Officer. The two principals controlled about 48% of the listed company. In January 2007 they sold their shareholding in both Freeseas Inc. and Free Bulkers S.A. to entities controlled by the Restis group.
This development allowed George and Stathis to once again grow their "private - family" shipping activities. A new structure was put into operation under the name G Bros Maritime S.A. They employ a total of sixteen shore-based staff including a Port Captain, Engineer Superintendent, Accountants, Secretarial and Administrative Executive staff. The company occupies approximately 300 sq. meters of office space in prime area on Akti Miaouli, Piraeus, at the heart of the worlds largest shipping center.
This year's performance of the dry bulk market has been less than memorable, in fact quite the opposite. Why did this happen, especially after a satisfying 2011, at least in terms of freight rates?
The softness of the dry bulk market is clearly a function of the imbalance of tonnage supply and demand, world GDP growth slowdown experienced over the past couple of years and the lack of finance. We fail to see any satisfaction in 2011 in freight rates and values and would suggest that the dry bulk market downturn we are experiencing essentially since end 2008, with a short breather in the spring of 2010, is a prolonged down run of the market.
Do you expect 2013 to be just as challenging, or could conditions improve, as a result of an improvement of the supply/demand current imbalance, a product of heavy new building ordering of the past few years?
As stated above there are three basic reasons pressuring freight rates and values down, whereas the supply/demand balance is slowly starting to look better, there is still significant danger of continued oversupply of tonnage on the back of the very strong marketing of the supposedly “eco-ships” by yards lacking utilization. The coming year will be as challenging as 2012, but will also see the market bottom out thus creating the opportunity for purchases and positioning for a upturn.
What strategy did your company follow, in order to cope with these adverse market conditions?
We, as many others, restructured our fleet by retiring older tonnage and restructuring financial arrangements, as well as disposing of vessels with heavier than acceptable debt. In reality, we exercised a stop-loss strategy allowing us to weather the down market.
Do you thinks that ships' values are close to bottoming-out, or is there still room for lower prices?
Vessel values are a function of earnings and replacement value and as such there are certain segments and age groups that may have further down side with overage tonnage in the larger sizes being the most prominent in that group. Having said that, older tonnage across the board has further downside as it is trading at scrap related values. We also believe that younger tonnage of questionable and inferior quality has considerable down side, being that in a buyer’s market one tends to cherry pick the best of the candidates.
Which ship types do you find the most attractive in today's market?
The answer depends on the driver behind purchases, i.e. is it a speculative asset play, or an operational longer term investment? In the case of the first, we would be inclined to look at the very large modern units, whereas in the case of the latter we would look at the modern high quality/high spec handy and handy-max segment.
Do you prefer newbuilding investments, or is it better to look for modern second hand tonnage in today's market environment?
We believe that quality of design and build is paramount these days and as such would rule out any new-building activity at inferior yards. Having said that, the discount to replacement cost found in today’s market leads us to believe that very attractive valuations can be found in top quality modern second hand vessels.
How different are today's conditions in shipping finance, compared to the pre-2009 period? Is it challenging to obtain financing for new vessel acquisitions?
Immensely!! There is practically no finance available except from very select institutions to very select borrowers either by virtue of being existing clients and/or by virtue of paying down existing facilities and thus opening up credit and to the larger corporate entities who are borrowing both on the strength of their balance sheets but also on the strength of their cash flows and cash in hand. Naturally, there are certain segments that are faring better than other in obtaining finance such as the LNG and offshore industries as well as the re-appearance of quasi financial institutions providing higher cost finance. In all though, margins are up, loan to value ratios are down and security is paramount to lenders.
Do you believe that the latest trend of the so-called "Eco Carriers", i.e. ships which promise lower fuel consumption will become dominant in the future, despite the premium prices they command? Are you considering investing in such vessels in the future?
The response of any educated and experienced shipping man is that the plethora of “eco-carrier” designs are untested and make claims that have not yet been put to the test and rigors of the real sea. A properly designed, maintained and operated existing ship can provide good competition to any of the new designs and we believe it is best to reserve judgment till these designs are put to the test.
One of the major concerns of the global shipping industry has also been piracy in various areas around the world. How do you protect your vessels? Which is the best solution in your opinion?
We, as others, have been forced to employ armed guards onboard our vessels transiting/trading in high risk areas. It is not a solution to the problem but is a necessary evil. The solution lies in the geopolitical balances that need to be juggled in Somalia and/or in West Africa and/or S.E. Asia. We hope, primarily for the safety of our crews and the free flow of trade that a final solution both on shore and at sea is found the soonest possible.
Source : Nikos Roussanoglou, Hellenic Shipping News Worldwide
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Tuesday, 18 December 12
NEWCASTLE PORT IN AUSTRALIA SHIPPED 20.19 PERCENT MORE COAL W/E 17 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 3,269,640 MT of thermal and coking coal for week ended 0700 hours 17 December 2012, Newc ...
Monday, 17 December 12
SYNERGISING WITH PIONEERS TO DEVELOP TOMORROW'S LATIN AMERICAN RAILWAYS
Press Release: Brazil being one of the largest country in South America has one of the most dynamic rail markets in the world. Rail transport in Bra ...
Sunday, 16 December 12
FREIGHT TREND SOFTENED THIS WEEK - VISTAAR
COALspot.com - The freight market further softened this week and closed at 784 points (down by 18.84 pct). The cape index had the biggest fall ...
Friday, 14 December 12
GMR GROUP OF INDIA TO IMPORT 100K MT OF 4800 GAR COAL
COALspot.com: GMR Group of India to invite bids for 100,000 Metric Tons of imported non coking coal to be delivered during January and February 2013 ...
Thursday, 13 December 12
HANDY : WCI-CHINA RATES AROUND $ 6000 AND ECI-CHINA AROUND $ 4000 - FEARNLEYS
Handy
Atlantic market remained unchanged. Rates from USG to Feast were around USD 18k and Black Sea to Feast about USD 10k. USG-Skaw-Passero rates ...
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- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- The University of Queensland
- White Energy Company Limited
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
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