Bloomberg reported that Thoresen Thai Agencies Pcl plans to almost double its dry bulk shipping fleet in three years as a focus on Europe US cargos shields it from tumbling rates for hauling commodities to China.
Mr David Ames EVP for shipping operations said that the fleet will climb to as many as 30 vessels from 16 by September 2015. The company, Thailand's second biggest dry bulk shipping operator, plans to buy new and used vessels as part of the expansion program.
Mr Ames said that Thoresen Thai's shipping operations were profitable in the quarter ended June 2012 because of demand to steel pipes, nickel ore and other products across the North Atlantic, where rates are about 13% higher than the global average. The company also recently reorganized its fleet so it had younger Handysize and Supramax bulk ships to help reduce costs and weather a slump in worldwide freight rates.
He added that "We are going to continue to operate in our niche market and we'll continue to attract cargos that not everyone can carry. We are not going to suddenly become a capsize operator out of Australia or Brazil and into China."
Thoresen Thai, which deploys about half its fleet in the North Atlantic, was unchanged at THB 15.4 at close of trading in Bangkok. The company has fallen 22% in 2012 as compared with a 19% gain for the benchmark SET index.
Commodity shipping rates have tumbled globally because of excess capacity. The Baltic Handysize Index has dropped 12% in 2012, while the Baltic Capesize Index has slumped 66% and the Baltic Dry Index has dropped 58%.
Mr Ames said that "We knew that tough times were ahead and the market was not going to be merciful as we came into 2011 and 2012. Smaller sizes are more resilient against the massive swings in freight rates."
Mr Ames said that bulk shipping capacity will continue to exceed demand globally this year, unless there is an extraordinary amount of scrapping and delays in delivery of new ships.
According to Clarkson Plc, the world's biggest shipbroker, the global order book for bulk ships is about 24% the size of the existing fleet, the highest for any vessel type.
According to a statement, Thoresen Thai's shipping operations posted earnings before interest and tax of THB 41 million in the quarter ended June 30th 2012 as compared with a loss of THB 17 million a year earlier. The company reported a net loss of THB 2.35 billion because of impairment charges on its investment in a mining project.
Source - Bloomberg
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