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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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Thursday, 01 November 12
KOMIPO LOOKING FOR 440,000 MT OF 4600 KCAL/KG NAR COAL FOR BORYEONG POWER PLANT
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids from coal producers, marketing companies or traders to supply of 440,000 Metric ...
Thursday, 01 November 12
CAPESIZE RATES FALL, DRY BULK MARKET RETREATS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It was another lackluster session yesterday in the dry bulk markets, with the industry's benchmark, the BDI (Baltic Dry Index) retreating by 1.63 p ...
Thursday, 01 November 12
HANDY : WCI-CHINA RATES ARE AT AROUND USD 5,000 AND ECI-CHINA AROUND USD 4000 - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to a lack of cargoes and an increased supply of ships. Rates from the Continent to east Med were around ...
Tuesday, 30 October 12
COAL PRODUCTION TO RISE BY FIVE PERCENT IN 2013 - TEMPO INTERACTIVE
TEMPO Interactive reported that, Indonesian Coal Mining Association (APBI) chairman Bob Kamandanu has estimated that Indonesian coal production will ...
Tuesday, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
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- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Australian Coal Association
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- PTC India Limited - India
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- White Energy Company Limited
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
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