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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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Monday, 19 November 12
IHS MCCLOSKEY ASIA PACIFIC COAL OUTLOOK CONFERENCE 2012
With the current global oversupply of thermal coal showing no signs of abating and spot prices falling to a two-year low, concerns are growing that ...
Sunday, 18 November 12
INDONESIAN SUB BITUMINOUS COAL SWAPS FOR JANUARY 2013 DELIVERY GAINS 1.29 PERCENT WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 1.29 percent WoW and 0.25 percent DoD on Friday, 16 Novembe ...
Saturday, 17 November 12
THE SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA ARE EXPECTED TO BE UP NEXT WEEK - VISTAAR
COALspot.com - This week market sentiments ended positive with all the segments ending higher except for handy size which was almost at same levels ...
Saturday, 17 November 12
RECORD DEMOLITION ACTIVITY SEEKS TO CURB TONNAGE OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
This year will prove to be another record-breaker in terms of scrapping of older vessels across all shipping segments, as the equally feverish pace ...
Friday, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
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- Central Electricity Authority - India
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- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- The University of Queensland
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Mercuria Energy - Indonesia
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- Semirara Mining Corp, Philippines
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- Mercator Lines Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
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- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
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