G E Shipping order for 3 new building Kamsarmax - a wise strategy
In time of excess capacity going in for new buildings is just another line of business
In a strategic move the Great Eastern Shipping Company Limited (G E Shipping) has placed an order for three new building Kamsarmax dry bulk carriers with the Jiangsu Yangzijiang Shipbuilding Group, China. At a time when there is over capacity it may sound unusual for any ship owner to place order for new buildings even though their prices may be low. But the ships to be built at Jiangsu New Yangzi Shipbuilding Co. Ltd, China (Builder's Shipyard) are bigger in size with capacity of about 82,000 dwt each. These will be built according to the new eco design features which will result in greater fuel efficiency and be in compliance with Energy Efficiency Design Index requirements. The 3 vessels are expected to join the Company’s fleet in 2Q and 3Q of CY16.
Anand Sharma of Mantrana Maritime Advisory contends that it is not proper for any leading ship owner to sit on immense amount of cash without investing it in a suitable manner. “Great Eastern is a big company and has been consistently making profits while others shipping companies have ended up in the red. It is quite reasonable to place order for ships when the market prices are low. When the market starts looking up it would be right time to book profit. Dry bulk index is picking up. When the market improves they will have a brand new vessel with a life of say 20 years. They could continue to operate the vessel as long as they find it profitable. Yes, Great Eastern also needs to increase their fleet size.”
“Kamsarmaxes have a bigger cargo carrying capacity and are suitable for the Indian ports,” says Hanoz Mistry of Five Stars Chartering Pvt Ltd. “Another advantage is that they have their own cranes, which is a boon as some ports can be found to be lacking them. While placing an order for new building initially a down payment of 10% is made. Prior to other payments being made the ship owners could find it preferable to sell off the ship and book profit at the right time before the delivery of the ship. This is another trend that is picking up.”
Great Eastern’s current fleet stands at 30 vessels, comprising 22 tankers (8 crude carriers, 13 product tankers, 1 LPG carrier) and 8 dry bulk carriers (1 Capesize, 3 Kamsarmax, 4 Supramax) with an average age of 9.0 years aggregating 2.42 mn dwt. The Company also has on order 3 other new building vessels of which 1 is an MR product tanker and 2 Kamsarmax dry bulk carriers. The company also has on order 3 other new building vessel of which 1 is an MR product tanker and 2 Kamsarmax dry bulk carriers. The two Kamsarmax about 81,600 dwt
The Kamsarmax was designed to meet the specified requirements making it the largest vessel that can enter the world's largest Bauxite port, Port Kamsar in the Republic of Guinea. Generally larger than 80,000 dwt, these vessels are often considered a sub-set of the "Panamax" family which would fall under Post-Panamax size. The Kamsarmax can navigate the Panama Canal (thus landing it in the Panamax family) however, it would not do so as efficiently as its smaller cousin, the Panamax. Most Kamsarmax bulk carriers are likely primarily devoted to the bauxite trade, there are those Kamsarmax vessels out there that will carry mostly agricultural products, coal, cement, iron ore or fertilizers.
SCI also had ordered for Kamsarmax. With delivery of these larger Kamsarmax bulk carriers having higher cargo carrying capacity, SCI will be increasing its presence in India’s import and export of dry bulk cargoes. The vessels are suited for worldwide trading and can be alternatively deployed in cross trades depending on the opportunities available. These bulk carriers were ordered as part of replacement of SCI’s existing Daewoo series Handymax bulk carriers which were built in 1986/87 and have been phased out from services.