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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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Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
Thursday, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
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- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Planning Commission, India
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Australian Coal Association
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
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