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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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Friday, 16 November 12
HANDY : IRON ORE WAS QUIET AND RATES FROM INDIA TO CHINA AROUND USD 5500
Handy
The Atlantic was weak with more supply of ships. Rates from Continent/ Feast at USD 9000 and from USG/China at USD 15k. The Pacific market re ...
Wednesday, 14 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 11.14 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,100,686 MT of thermal and coking coal for week ended – 0700 hours 12 November 2012, Ne ...
Tuesday, 13 November 12
INITIAL COAL PRODUCTION AT KATINGAN RIA ON TRACK FOR 2013 FOLLOWING GRANTING OF 'IN PRINCIPLE' FORESTRY PERMIT, INDONESIA
Realm Resources Ltd (“Realm” or the “Company” - ASX: RRP) has announced that its application to upgrade its exploration fore ...
Tuesday, 13 November 12
BULK PORTS & TECHNOLOGY ASIA 2013
Press Release - TOC Events are pleased to announce a new addition to our global portfolio with the launch of the inaugural Bulk Ports & Technolo ...
Monday, 12 November 12
THE ESTABLISHMENT OF NORTH KALIMANTAN AS A NEW PROVINCE WILL NOT AFFECT THE LOCAL MINING COMPANIES
The government of Indonesia has ensured that the establishment of North Kalimantan as a new province will not affect the local mining companies ...
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- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- The University of Queensland
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
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