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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, 13 September 12
FUEL EFFICIENT SHIPS MAY BE MORE EXPENSIVE, BUT THEY MAKE FINANCIAL SENSE SAYS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest trend in shipbuilding is the so called "Eco" ship, i.e. ships which offer much better fuel consumption and are more cost-effect ...
Wednesday, 12 September 12
INDIAS COALGATE: TIME FOR A ROOT CANAL
A recent report from India’s Comptroller and Auditor General (CAG) pertaining to the allocation of coal blocks has created a political storm i ...
Tuesday, 11 September 12
CLOUDY AND POLICY RISK INDONESIAN COAL INDUSTRY
COALspot.com - Bahana Securities in its latest coal outlook, commented on the Indonesian coal market, with economic slowdown in the four largest coa ...
Tuesday, 11 September 12
SHIP OWNERS KEEN ON SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With most ship owners back from their summer rest, things are starting to pick up again in the second hand vessel market, with more and more deals b ...
Monday, 10 September 12
TNPL, AN INDIAN PAPER MAKER IS SEEKING FOR 300K MT OF IMPORTED NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 6 Shipments about 50,0 ...
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- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Petron Corporation, Philippines
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