Essar Shipping eyes fleet expansion
Feb 15th, 2018
Essar Shipping, one of the largest maritime players in the Indian market, is looking at options to further expand its fleet, CEO Mr Ranjit Singh has told Lloyd’s List in an interview.
There are plans to buy two panamax vessels, a medium range oil tanker and a suezmax vessel, Mr Singh says, noting that the company is still deciding whether to go for newbuildings or older tonnage.
However, he believes that the right time to acquire ships in the secondhand market has passed, because prices have risen substantially over the previous year.
Essar Shipping bought the 1995-built, 74,000 dwt panamax Jun Jie for $4.8m last year and renamed it Mahavir. The current market value of the vessel is $7.9m, VesselsValue data shows.
Thus, Mr Singh is more in favour of newbuildings as prices have not jumped in a similar fashion, while more importantly, owners can have equipment such as scrubbers and ballast water treatment systems pre-installed to meet upcoming global environmental regulations.
However, securing low-cost financing continues to be a challenge as banks continue to tighten lending to the shipping sector.
Essar Shipping recently bid on tenders issued by Indian Oil Corporation and Bharat Petroleum Corporation to charter a very large crude carrier and a suezmax tanker for a five-year period with options to extend for two more years. The tender was open to Indian shipowners.
If the company were to win the contract, it would acquire the additional tonnage needed to full the terms of the employment agreement, says Mr Singh.
Essar Shipping currently operates a fleet of 14 ships of mostly bulk carriers, comprising one capesize, six mini capesizes, one panamax, two supramaxes, two handymaxes as well as two very large crude carriers. The average age of the company’s fleet of vessels is 12 years.
Out of the entire fleet, only five vessels are Indian-flagged and the remaining nine ships are flagged in Cyprus, Liberia and the Marshall Islands.
Essar Shipping is expecting 38% growth in cargo volume for the ongoing fiscal year, to 18m tonnes from 13.06m tonnes a year ago, aided by strong coastal shipping volumes in which the company has a 20% national share.
Source: Lloyd’s List