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Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
 The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead Transport survey from global law firm Norton Rose Fulbright. China and India are the most popular jurisdictions for investment, followed by the US, with growth through consolidation viewed as the best investment opportunity currently. While confidence among respondents from the aviation and rail industries is high, owing to lower oil prices, the availability of funding and the impact of infrastructure improvements, the shipping industry remains the least optimistic as a result of overcapacity in many subsectors of the market.
Over half (52%) of all respondents to the Norton Rose Fulbright survey agree that a global recession poses the greatest threat to their industry. However, despite political uncertainty, most agree that the transport sector can expect to enjoy further growth over the next five years. Rising passenger numbers and freight volumes are anticipated (by 73%) and an increase in the number of routes and services is expected (52%).
Investment in technology is expected to rise, according to 67%, with low carbon technology and predictive analytics expected to represent the most significant driver of change in the transport sector over the next five years.
Infrastructure remains a key theme for the sector. After consolidation, infrastructure improvements are viewed as the best investment opportunity currently (by 19%), and infrastructure investment is seen as the most helpful form of government support (by 25%). For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries.
Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74% of respondents expect the availability of funds to stay the same, or even increase, over the next five years.
Harry Theochari, global head of transport at Norton Rose Fulbright, comments:
“The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.
“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.
“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.
“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.
“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”
Shipping
Shipping is the least optimistic industry within the transport sector, by a significant margin. Only 15% believe that current market conditions are positive, down from 33% in 2015 and 69% in 2014.
Overcapacity is the principal reason given for this lack of optimism (66%), followed, to a lesser extent, by economic uncertainty in key markets (27%).
Respondents are more optimistic when asked to consider the outlook for shipping over the next five years. Fares and freight costs will increase according to 67% and the same proportion anticipate an upturn in passenger numbers and freight volumes. The number of routes and services offered is also expected to rise, according to 35%. However, just 22% believe that funding will become more readily available and 64% think that the number of enforcement actions will increase as lenders seek to protect their positions and recover losses. Most (68%) expect fuel costs to rise.
Investment opportunities
Much of the shipping industry (58%) continues to favour Asia Pacific for investment opportunities over the next two to five years, followed, to a far lesser extent, by Europe (16%). China (17%) and India (16%) remain the most popular markets for investment.
A merger or acquisition is seen as the optimal investment opportunity (by 34%, up from 29% in 2015), while 13% favour joint ventures, alliances and pools (down from 28% in 2015).
Respondents expect consolidation to be at the centre of shipping businesses’ strategies over the next 12 months, either in the form of M&A (22%) or joint ventures (19%), while 22% expect a focus on the disposal of non-core assets. Almost three-quarters (72%) expect investment in technology to increase over the next five years, with low carbon technology expected to have the most significant impact on the industry during this period (by 33%), followed by predictive analytics (by 24%).
Regulation
Almost half (42%) believe that greater transparency in the application and enforcement of existing and proposed regulations would be the most helpful form of government support for the shipping industry, more so than fiscal incentives (32%) or investment in infrastructure (29%). Environmental regulation is seen as the regulation that has had the greatest impact on shipping over the past decade (by 49%), followed by trade and financial sanctions (by 25%).
Supply and demand imbalances are seen as the greatest challenge to the operational efficiency of the industry (by 47%), followed by a lack of qualified people (12%) and emission controls (9%). A global recession is seen as the greatest threat to the health of shipping over the next five years (by 68%). To a lesser extent, respondents are also concerned about the impact of enforcement by creditors on debt obligations (12%) and continued political and economic uncertainty in the Eurozone (8%).
Bank debt is once again expected to act as shipping’s primary source of funding over the next two years (22%), followed by shareholder support (18%) and private equity (16%).
Despite the problem of overcapacity in many sub-sectors of the industry, fuelled by new build vessels coming on to the market, 11% think that ECA funding will be the industry’s main
source of finance.
Source: Norton Rose Fulbright | Hellenic Shipping
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Thursday, 07 April 16
BIMCO AND GIIGNL PUBLISH A GROUNDBREAKING VOYAGE CHARTER PARTY FOR LNG TRADE
BIMCO and the International Group of Liquefied Natural Gas Importers (GIIGNL) have today jointly issued the first definitive voyage charter party & ...
Wednesday, 06 April 16
HOW LONG SHIPPING CRISIS WILL BE; WHEN SHOULD OWNERS EXPECT THE BULK CARRIERS TO BECOME PROFITABLE? - INTERMODAL
It is the consensus that dry bulk shipping has been in a crisis for quite some time now. Bulk carrier values are at historical low levels, therefor ...
Tuesday, 05 April 16
DRY BULK REVISITS 1980S LOWS AND FACES UNCERTAIN LONGER TERM OUTLOOK - MSI | HELLENIC SHIPPING NEWS
With the market near bottom, attention is turning to the length of the downturn, the effect on asset values and the impact of broader demand side c ...
Monday, 04 April 16
THE LOADING, AND SUBSEQUENT DISCHARGE, OF UNSAFE NICKEL ORE - ALL TIME TO 'COUNT' - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a recent, published, London arbitration award the English tribunal has held that all time lost as a result of loading, ...
Monday, 04 April 16
INDONESIA CS57 COAL INDEX SLIDES SLIGHTLY WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.07 percent week over week to averaging $38.88 per ton on this past Friday, ac ...
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- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Parliament of New Zealand
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- White Energy Company Limited
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Australian Coal Association
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
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