Singapore www.Splash247.com
On top of the maritime world Or on the edge?
Market Report 2016
Get the most reliable Internet at sea… ..at 30% savings
2016
SATELLITE COMMUNICATIONS PRODUCT AWARD
14 -time Awa r d W i n n e r
Give your business a competitive edge with
TracPhone Vip-series Advantage Bundles ®
All bundles include: • Award-winning TracPhone VIP-series SATCOM system • 5 GB/month at speeds up to 4 Mbps • Global connectivity • News delivered daily via IP-MobileCast
™
3 advanced SATCOM solutions starting
• Secure myKVH portal and management tools
as low as $1,399 per month
• Extended 5 year warranty and global support
™
Check out the Bundles!
Choose the bundle that’s right for you at: kvh.com/VSATsingapore SCAN QR CODE
KVH is the world’s No. 1 maritime VSAT supplier as measured by vessels equipped with mini‑VSAT Broadband service, according to NSR’s Maritime SATCOM Markets, 4th Edition, June 2016, and the COMSYS Maritime VSAT Report, 4th Edition, March 2015. ©2016 KVH Industries, Inc. KVH, TracPhone, myKVH, IP‑MobileCast, and the unique light‑colored dome with dark contrasting baseplate are trademarks of KVH Industries, Inc. mini‑VSAT Broadband is a service mark of KVH Industries, Inc. Subject to change without notice.
CONTENTS
Singapore Straight 3
Editor’s Comment
5
Economy
9
Government
11
Lines
15
Port
17
Offshore
21
SSA
23
Human Resources
25 Bunkering 26
The year in review
28
Opinion
We will propose strategies for a more vibrant and competitive Singapore IMC —BW chairman Andreas Sohmen-Pao
APL’s extensive global footprint will be a huge asset to us
11
9
— Rodolphe Saadé, vice chairman of CMA CGM
This overcapacity and lower rate environment is correcting naturally
12
— Charles Maltby, chairman, Epic Gas
Timely S&P asset management remains a core strategy
13
— Michael Elwert, CEO, Elektrans
We want to encourage creative ideas — Tan Chong Meng, group CEO of PSA International
15
Swiber was a train wreck in slow motion
For all the latest breaking shipping news from Singapore
18
— Venkatraman Sheshashayee, CEO of Miclyn Express Offshore
We need to be on our toes because when you are number one there is only one place to go — Singapore Shipping Association president Esben Poulsson
21
www.splash247.com 1
Rustibus® is designed to de-scale and power brush ship decks, hatch covers,tank tops etc. free from paint and rust!
THE BEST SOLUTIONS FOR SURFACE PREPARATION AT SEA.
EX II 2 GD cIIA T135ºC -20ºC ≤ Ta ≤ +60ºC DNV 11 ATEX 95218X
Before
After
RUSTIBUS® EX SERIES EXPLOSION PROOF CERTIFIED sales@rustibus.com BERGEN NORWAY
SINGAPORE
ANTWERP BELGIUM
HOUSTON USA
DUBAI UAE
UP FRONT
Singapore www.Splash247.com
Market Report 2016
The site for incisive, exclusive maritime news and views
www.splash247.com
EDITORIAL DIRECTOR Sam Chambers sam@asiashippingmedia.com CORRESPONDENT Jason Jiang jason@asiashippingmedia.com ECONOMIST Paul French All editorial material should be sent to sam@asiashippingmedia.com COMMERCIAL DIRECTOR Grant Rowles grant@asiashippingmedia.com Advertising agents are also based in Tokyo, Seoul and Oslo – to contact a local agent please email grant@ asiashippingmedia.com for details. MEDIA KITS ARE AVAILABLE FOR DOWNLOAD AT WWW.SPLASH247.COM/ADVERTISING All commercial material should be sent to grant@asiashippingmedia.com
Lessons learned from London
I
t was, as Esben Poulsson pointed out at this year’s Singapore Shipping Association (SSA) annual bash, back
in 2002 that transport minister Khaw Boon Wan made a call for the Lion City to become ‘London Plus’. Khaw was guest of honour at this year’s SSA dinner – the first time he’d been back at the massive shipping gathering for 14 years. Readers might recall that Singapore’s maritime development strategy at the turn of the century called for the former British colony to model itself on London. In 2016, London looks small fry to mighty Singapore, a picture perfectly
SSA’s Poulsson is aware that the city
encapsulated, I would argue, with the
must up its game once again to stay at the
Singapore Exchange’s acquisition of the
top. “The Singapore proposition is still
venerable Baltic Exchange, an exclusive
there,” he tells me on page 21, “but we
first broken by Splash this May.
need to be on our toes because when you
The latest Xinhua-Baltic Exchange Shipping Centre Development Index published in 2016 ranked Singapore as the top shipping centre among 43 global
DESIGN Tigersoft Pte Ltd Printed in Singapore Copyright © Asia Shipping Media Pte Ltd (ASM), 2016. Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner. For reprints of specific articles contact grant@ asiashippingmedia.com.
Has Singapore reached ‘peak ownership’?
are number one there is only one place to go.” In short, there is no room for complacency – just ask London!
maritime hubs and it was also ranked first as the world’s leading maritime capital in a Menon study last year. Nevertheless, I am not alone in wondering whether Singapore has reached ‘peak ownership’. At repeated exclusive roundtables we have organised with the island’s top shipowners this year there is a growing feeling that Singapore
Sam Chambers Editor
has probably topped out in terms of the number of owners based here. Issues with costs and human resources dominate. This year we’ve seen a number of offshore owners quit the Lion Republic, while Maersk Line has switched its Asia HQ from Singapore to Hong Kong, and Japan’s Mitsui OSK Lines has canned its Singapore dry bulk subsidiary.
Stay up to date with all the latest shipping news from Singapore
Wärtsilä your shorter route to the gas age
Wärtsilä connects the dots Wärtsilä has the expertise, experience and offering you need. Our offering covers integrated solutions, EPC turnkey delivery, services and products for all phases of the LNG lifecycle. Let Wärtsilä connect the dots that make your life both more profitable – and relaxing. Read more at www.wartsila.com
ECONOMY
A perfect bad storm for Singapore The services sector is struggling as overseas investors cut back
S
ingapore turned in some
US economy, a slowing down and less
financial services in Singapore over
particularly downbeat growth
investment driven China and uncertainty
the last decade. This financial sector
figures for the third quarter of the
emitting from the European Union
has been very dependent on lending,
following the UK’s Brexit decision.
which has slowed of late, and facilitating
year. Where the government had hoped the island state’s GDP would grow by
According to MTI, September was a
mainland Chinese investment overseas
1.5% this year, most analysts now reckon
bad month - the local economy slowed
and in the region (both that of corporates
1.2% is the best the economy can achieve.
considerably over the July to September
and private wealthy individuals), which
And the downturn may last for some
quarter, expanding a mere 0.6% year-
has also slowed recently. Analysts of
time – GDP growth of an equally unstellar
on-year and contracting 4.1% from the
Singapore’s financial sector seem to
1.3% is predicted for 2017, down from a
previous three months. That’s the biggest
mostly believe that the lending slump has
projected 1.9% predicted by the Ministry
slump in that period for four years.
bottomed out and is now plateauing which
of Trade and Industry (MTI) at the start of the year. Singapore, it seems, is being hit by
Singapore’s GDP is composed of
is good news. However, Chinese overseas
services to the tune of two thirds.
investment, while still strong globally and
Therefore, the news that it was services
overall, has slowed from previous highs
a perfect economic storm. The island’s
that were the most laggard section of
that boosted Singapore’s banking sector
economy has entered a cyclical trough,
the economy is not good news going
significantly.
which is being accentuated and worsened
forward. Manufacturing maintained a
by a combination of factors including
better performance rate than services, but
late towards services is looking a little
sluggish demand continuing from the
with Singapore so dependent on services
disappointing, its previous regearing
long-term growth of manufacturing in
of the 1990s and early 2000s towards
an environment where two thirds of the
hi-tech and clean manufacturing
economy is struggling is not overly likely.
appears to still be paying dividends.
That services had become so prominent
Singapore’s manufacturing output rose
is mostly down to the growth of regional
6.7% in September this year compared
Chinese overseas investment has slowed from previous highs
So while Singapore’s regearing of
www.splash247.com 5
We bring highly reliable, flexible global services to your fleet. Our innovative technology offers a revolutionary data and communications gateway for your business – making every journey safer and smarter.
ENABLING THE MARITIME ECOSYSTEM_ SAFER, SMARTER SHIPPING Inmarsat offers your ship a highly evolved maritime communications ecosystem which makes every trip or voyage more efficient, safer and more productive. In short, just a lot smarter. Visit inmarsat.com
ECONOMY
with a year ago, following a poor 0.5% year-on-year growth in the previous month. Leading the charge to growth have been biomedical and electronics industries, both key priority industries since the 1990s. Many analysts feared that Singapore’s gains in 1990s would evaporate as China climbed the value chain – and this was true to an extent with semiconductor fab plants. However, in key areas Singapore manufacturers (both locals and international inward investors) have continued to flourish. In an area like biomedical Singapore combines both high levels of innovation and production standards with a level of trust in their
little economic stimulus in the form
successfully and innovatively implement
products that remains elusive in mainland
of an enhanced programme of public
smaller, more innovative, hi-tech
China.
works projects. OCBC Bank’s head of
investment.
So what does the future hold? Most
treasury research & strategy Selena Ling
Still, despite all these initiatives,
analysts believe that services will continue
commented recently that, “Sustained
Singapore remains today as it was
to be a drag on the economy for some
public construction projects could
essentially since its creation, a trading
time – slow down and some uncertainty
provide a stabilising growth force amid
economy. In terms of global trade and
in the US, China and the Eurozone are not
the twin drags from manufacturing and
how it might affect Singapore there
problems that will disappear overnight.
services.” Singapore is a small country,
are, unsurprisingly in these disruptive
Manufacturing is expected to remain in
with a small landmass, which has often
times, two schools of thought. One is
steady growth mode and internationally
mitigated against substantial public works
that problems will emerge with a slowing
competitive. And, of course, we can’t
projects – unlike, say China, Singapore
China, inward looking European Union
forget that Singapore is the primary
cannot simply construct thousands of
and, perhaps, a much more protectionist
entrepot economy for Southeast Asia and
miles of highway or hundreds of bridges
US than Singapore has been used to.
a massive port still, for both commercial
and airports as stimulus.
What can be seen as a backlash against
and passenger traffic. Singapore was the
Services will continue to be a drag on the economy for some time
globalisation, so many say, is bad news
most visited port in Asia last year and this has counterbalanced a slight drop off in mainland Chinese tourists as China’s outbound tourism growth has slowed somewhat.
Singaporean stimulus ideas though are
for Singapore. However, others believe these factors merely mean Singapore has to recalibrate somewhat and look elsewhere. If China is slowing then more attention should be paid to the growth of
What many think might help is if
characteristically innovative and include
India and its lengthening domestic supply
Singapore’s government kicks in a
a range of architectural heritage projects,
chain. Southeast Asia has its bright
extending the subway system, significant
economic spots - the Philippines (despite
investment in the island’s recently formed
some political concerns), Vietnam and
Cyber Security Agency (CSA) and other
Indonesia – all of whom are closely tied
‘smart city’ ideas from driverless street
with Singapore in trade terms.
Singapore’s manufacturing structure, 2015 Sector
% of total manufacturing
Electronics
29.2
Pharmaceuticals
19.3
Transport & Engineering
15.6
Precision Engineering
12.6
General Manufacturing
11.3
Chemicals
9.0
Media & Technology
3.2
Source: Singapore Economic Development Board
cleaning vehicles and investment in
Singapore faces regional and global
turning the country’s healthcare system
challenges that will adversely affect its
‘smart’ - initiatives include remote
economy and probably mean several
monitoring of the elderly, ‘tele-health’
years of downturn. But the island state
online doctor consultations, etc. As we’ve
is a long way from full-blown recession.
seen before, where Singapore cannot
Still, Singapore’s fortunes are, to a greater
replicate the economic programmes of
degree than many other economies, tied
the larger countries, such as China, it can
to the fate of the global economy.
www.splash247.com 7
Maritime Singapore represents the diverse and vibrant eco-system of Singapore’s maritime industry. The industry plays a vital role in global trade and contributes 7% to Singapore’s GDP. With over 5,000 maritime establishments and more than 170,000 professionals, a sea of opportunities awaits you at Maritime Singapore.
AW
ne industry
rld of
pportunities
MARITIME SINGAPORE . VITAL . VERSATILE . RESILIENT
Find out more at www.maritimesingapore.sg
GOVERNMENT
to be a pioneer in the global ports scene. The Green Ship Programme (GSP), a voluntary programme under MSGI sees more than 50% of qualifying ships exceeding the current Energy Efficiency Design Index frame required by the International Maritime Organization (IMO).
Green ahoy Local authorities are incentivising less polluting ships while mapping out the city’s maritime future
N
The Green Port Programme (GPP), another voluntary scheme under MSGI targeting at ships calling at the Port of Singapore, has also achieved considerable success. More than 3,700 vessel calls have switched to marine fuel with sulphur content not exceeding 1%. The Green
ot sitting on its laurels the
logistics sectors such as smart ships and
Technology Programme (GTP) also saw
authorities in the Lion Republic
ports, data analytics, digital platforms and
more than 20 projects involving over 60
are planning the island’s maritime
other new technologies are disrupting
vessels. The encouraging results have
traditional business models and creating
prompted MPA to extend the MSGI to 31
new value chains. To be better positioned
December 2019.
future.
In September the Maritime & Port Authority of Singapore (MPA) established
for future growth, Singapore would need
From July 1 this year, GSP incentives
the International Maritime Centre 2030
to stay nimble and adapt to new industry
have been extended to ships using LNG
(IMC 2030) advisory committee to chart
paradigms.”
as part of Singapore’s longer term efforts
the future directions of Singapore’s
Sohmen-Pao commented: “We will
IMC. Andreas Sohmen-Pao, chairman of
propose strategies for a more vibrant and
BW Group, has been appointed as the
competitive Singapore IMC.”
chairman of the committee. “As part of its work, the committee
With shipping remaining for the large
to encourage LNG as a sustainable alternative fuel source. In addition, the sulphur oxides limit under the GPP have been reduced further
part in a considerable downturn the state
to 0.5% for ships calling at the port to
would review Singapore’s IMC
moved to help out further this year. In
enjoy a flat rate of 25% concession in
development strategy and identify new
April MPA granted a 10% cut in port
port dues for the use of low sulphur fuel
growth areas to enhance Singapore’s
dues for bulk carriers. It made similar
during their entire port stay. A similar
long-term competitiveness and value
concessions to container vessels in and
concession is also extended to ships using
proposition as an IMC,” MPA said in a
offshore support vessels earlier.
LNG in the port of Singapore.
release. In 2000, there were only about 20
“The roll out of these measures
MPA also introduced two new
demonstrates Singapore’s commitment
programmes under the MSGI – the
international shipping groups with
to help the maritime sector through this
Green Awareness Programme (GAP) and
origins from countries including China,
challenging time, and its importance in
the Green Energy Programme (GEP).
Denmark and Norway that had offices
contributing to our economy and creating
GAP focuses on creating awareness on
in Singapore. Today, Singapore has
good jobs for Singaporeans,” MPA said in
possible avenues towards sustainable
one of the highest concentrations of
a release.
shipping while GEP aims to promote
international shipping groups; and is
MPA also took some time this year to
home to more than 130 international
update its green payback schemes. The
fuels as well as wider adoption of
shipping groups as well as leading players
Maritime Singapore Green Initiative
energy efficient operational measures,
in shipmanagement, finance, broking,
(MSGI), first launched in 2011, has proven
in anticipation of the 2020 global
insurance, law and arbitration. “The rapidly evolving global economic environment poses both opportunities and challenges for Singapore’s development as an IMC,” MPA noted. “Emerging trends in the maritime and
adoption of alternate or cleaner marine
sulphur emissions cap. These efforts
Singapore needs to stay nimble and adapt to new industry paradigms
come through support in asset and infrastructural development, as well as provision of various platforms for the industry to gain knowledge on these alternate fuels.
www.splash247.com 9
LINES
Farewell to the flagship The sale of Neptune Orient Lines to CMA CGM was one of many important news stories this year
M
embers of parliament earlier
remarkably candid interview with the local
this year compared losing
Straits Times on how the line failed to
Neptune Orient Lines (NOL) and
handle the downturn.
its containerline APL to waving goodbye to a child. Previous bosses of NOL include Goh Chok Tong, the republic’s second prime minister after Lee Kuan Yew. France’s CMA CGM completed the
Ng Yat Chung presided over the line from 2011 to June this year. “In this environment of extreme overcapacity and severe freight rate
Ng admitted NOL had been “a bit slow and reluctant to change”. “Compared with our competitors, we also didn’t have the scale, which has become more important in this industry,” added Ng. “The largest part of the cost for a
erosion, competition is based on cost…
carrier like us comes from the terminal
$2.4bn takeover of the city-state’s flagship
Unfortunately, we haven’t been able to cut
costs, trucking costs, fuel costs – all these,
carrier this year. Nicolas Sartini has been
costs fast enough to offset the collapse in
you get a significant advantage in getting
parachuted in from Marseille to become
freight rates,” Ng told the newspaper.
a better rate when you have big volumes.
CEO of NOL, while Rodolphe Saadé, son
NOL and its boxline subsidiary APL
So when freight rates are very low, every
of the CMA CGM founder, is now NOL’s
had historically built its business model
dollar of the cost advantage matters.
chairman. In September NOL was delisted
as a premium service line, so its costs
Otherwise, you’re hamstrung.”
from the Singapore Exchange.
were always “significantly higher” than its
“APL’s extensive global footprint will be a huge asset to us as we take the
competitors. “But the world has changed. The
Ng said the decision to sell the Singaporean flagship, founded in the 1960s, was a very hard one. The company
business forward as part of the CMA CGM
market growth has slowed down, there
had explored buying out others, he said,
Group,” Saadé commented on taking over
is severe overcapacity, so we had to
without revealing names.
the line.
recognise that the business model needed change. We didn’t have the right cost
Busy at BW
too small ships – these were all listed by
position in an industry that was becoming
The diverse BW Group has had a very
the outgoing chief executive of NOL in a
more and more commoditised.”
busy year across its many business
High costs, the wrong business model,
www.splash247.com 11
LINES
strands. It formed BW Dry Cargo in April, pursuing a quick build up of bulkers in
“This two-way trade route will
bulk division for a nominal S$3 ($2.16).
the 50,000 dwt to 85,000 dwt range. The
contribute the world’s longest tonne-miles
LPG under pressure
new division is headed by Nordic Bulk
capesize haul,” Lau says.
While admitting rates are foul at the
Carriers founder Christian Bonfils and
The group’s in-house bauxite from its
moment, Charles Maltby, chairman and
has already amassed a double-digit sized
Guinea mine will increase production, and
ceo of Epic Gas, is adamant the company
fleet in a very short amount of time.
export, from the current capacity of 10m
is looking at the markets from a long term
tonnes a year to 30m tonnes a year within
perspective, hence now is a good time to
year building up its stake in Norway’s
the next two years. “This translates to full
snap up cheap new tonnage with an eye
Aurora LPG and as we went to print
employment of 40 capesize vessels for
on rates improving in the pressurised LPG
the Aurora board had approved BW’s
one way trade, and the required capacity
sector next year.
takeover offer, cementing the company’s
will be doubled if every ship is employed
position as the undisputed largest VLGC
in two-way trade,” Lau says.
Elsewhere, BW LPG spent much of the
operator in the world. BW’s chairman Andreas Sohmen-Pao
Distressed hunter
Maltby joined the Chris Buttery backed gas vehicle in 2014. He had been with Pacific Basin in the UK prior to his Singapore switch.
was inaugurated this January as the new
Like BW and Winning, Singaporean
chairman of the Singapore Maritime
handysize bulk owner Pioneer Marine is
focusing purely on the pressurised LPG
Foundation.
gearing up to buy up distressed assets.
sector with a fleet of 3,500 to 11,000 cu
The line’s founder is adamant that the
m vessels, the full spectrum of vessels in
time is ripe to pick up bargain hulls.
the sector.
Cape crusader
Epic Gas is the only owner operator
Rubbing shoulders with the likes of John
Pankaj Khanna, Pioneer’s CEO,
Angelicoussis and Eyal Offer in terms of
commented, that having been able to
it controlled a fleet of 22 pressurised LPG
dry bulk acquisitions this year has been
cancel the majority of its newbuild plans,
vessels, and over the intervening years
Singapore-based Chinese outfit Winning
the company would seek “opportunistic
it has placed orders for 13 owned and
Shipping. According to online pricing
acquisitions”.
four bareboat chartered new vessels, a
platform VesselsValue.com Winning has
Khanna founded Pioneer Marine four
After it merged with Pantheon in 2012
total of 129,900 cu m, at Japanese yards.
been among the top three bulker buyers
years ago, having served for many leading
Some 79% of this newbuild capacity is
in 2016 – a regular source of S&P news
shipowners including George Economou.
for vessels of 7,200 cu m or larger. Two
stories on Splash.
Another Singapore bulker player
ships have still to deliver by which point
China’s rapacious demand for raw
has been snapping up distressed assets
Epic will have a fleet of 43 ships totalling
materials is seeing ever-longer dry bulk
of late. China Navigation in November
277,400 cu m, representing about 17% of
journeys crisscrossing the globe. No
moved to take on four 38,800 dwt
the global fleet.
capesize trip is longer these days than
handysize newbuildings. The ships were
from Guinea in West Africa to the People’s
originally ordered by German bulker
Maltby argues, “as it enables us to
Republic. Winning is making the running
outfit Bertling. The vessels have now been
globally deliver a flexible, long term
in this niche trade. The Chinese-backed
sold by the yard, Huanghai Shipbuilding,
business model to our customers,
company has mining and shipping
for a price brokers tell Splash is around
through time charter, COA, voyage charter
interests, and is very much in charge of its
$15.4m each.
relationships, at both fixed and floating
entire supply chain. The Winning current fleet is weighted
12
China back to West Africa.
Not all bulk plays worked out this year however. 2016 was, after all, the year
“The scale of the fleet is important,”
rates.” Epic Gas anticipates further fleet
in favour of capesizes, but also includes
where the Baltic Dry Index slipped below
supramaxes, a post-panamax and a
300 points. Mercator Lines (Singapore)
couple of newcastlemaxes. The company
(MLS) exited dry bulk this year as one of
involved in the movement of LPG
also has a couple of transhippers, four
the more high profile casualties of the
(propane and butane) over the last mile
floating cranes, 12 tugs and eight barges.
downturn. The Singapore-listed arm of
into smaller ports within developing
growth in the future. Pressurised LPG vessels are typically
Bosco Lau Chi Wah, vice president
the Indian owner – weighed down with
economies. Within Epic Gas about 75%
and CEO of Winning Logistics Services,
debts of more than $165m – had a fleet
of its volumes are LPG, whilst the balance
explains how the company focuses on
of 12 panamaxes and kamsarmaxes when
are petrochemicals such as propylene,
taking bauxite from West Africa to China
it called it a day in January. Bankruptcy
butadiene and VCM.
and then project/general cargoes from
judges ended up selling the defunct dry
Singapore Market Report 2016
However, while global LPG trade grew
LINES
by 9.8% last year, rates for pressurised
when time is right and we can harvest
LPG have been bouncing along at record
opportunities which could complement
and Kozo Keikaku Engineering to
lows – often below opex levels – for
our portfolio long-term,” he says,
establish a new company, Symphony
the smaller pressurised vessels due to
stressing: “Timely S&P asset management
Creative Solutions (SCS) in Singapore.
overcapacity within the sector, driven
remains a core strategy.”
SCS is being created to develop and
primarily by record newbuild deliveries in 2014 and 2015. The low rates have translated into tough financial times for the sector.
Possible strategic partnerships with
NYK agreed to team with Weathernews
market next-generation solutions in the
other shipowners are also on the cards.
shipping and logistics fields.
Cautious Aurora
considerable volte face over its plans for
MOL, meanwhile, performed a
“This is the right time for consolidation
Singapore. For a number of years the Lion
demand in China as domestic PDH plants
and/or acquisition of secondhand or
City had been MOL’s home from home,
come on line to produce propylene has
distressed assets.”
with considerable business shifting from
In addition, the evolving petrochemical
led to volatile demand for propylene
That’s the view of Kenny Rogers
imports, typically on pressurised LPG
who heads up IMC’s chemical tanker
under a concerted decentralisation plan.
vessels.
subsidiary, Aurora Tankers.
This has now come to an end.
“This overcapacity and lower rate
Although he believes pricing will
Tokyo to the Southeast Asian republic
MOL’s four-year-old dry bulk shipping
environment is correcting naturally,”
continue to drop further newbuilds in
subsidiary in Singapore, MOL Bulk
Maltby says optimistically, “and has
the chemical tanker sector are not a good
Carriers (MOLBC) was axed this year, its
assisted in reducing newbuild ordering,
thing now as they will continue to erode
functions returning to Tokyo as part of
and also led to scrapping of about 2% of
freight rates and dampen the recovery
sweeping dry bulk restructuring at the
the fleet each year.”
time from the present over tonnage.
giant line. MOLB was involved in spot
With demand growth for LPG
Aurora’s fleet today consists of 20
remaining robust, and vessel newbuild
chemical tankers with one more to deliver
supply already reducing, and reducing
in January next year.
handymax trades. Meanwhile, Kawaski Kisen Kaisha (K Line) is going on a different Singapore
significantly to below 4.4% in 2017,
“The chemical tanker sector is
dry bulk path to compatriot MOL. K Line
Maltby says he anticipates a “steady
presently challenged due to seasonal
announced plans earlier this year to set
recovery” in rate levels.
impacts and the effects of overtonnage,”
a Panamax Fleet Allocation Center at its
Rogers observes. There has been a
Singapore-based subsidiary, K Line Pte
significant rise in tonnage supply which
Ltd (KLPL) to manage the time charters of
Watch out for India’s Elektrans Group as
Rogers says is always a “downward driver”
the group’s 50-odd panamax and post-
it makes plenty of moves in the tanker
of freight rates.
pananax fleet.
New era for Elektrans
sector in the coming couple of years.
“Traditionally,” he notes, “the chemical
With former Thome man Captain Michael
tanker sector has been very disciplined
Lost shipping trusts
Elwert installed as group CEO this April,
when it came to building tonnage,
2016 marked the year that Singapore’s
the Singapore-headquartered firm is
however many new investors have entered
flirtation with shipping trusts came to
gearing up for significant expansion.
the sector that fundamentally do not
a shuddering halt with both Rickmers
understand the market.”
Maritime Trust and First Ship Lease Trust
“Currently, Elektrans Group is with its
Concluding, Rogers warns: “Shipping
(FSL) coming under enormous pressure.
when we come across the right assets at
in effect has entered a second downturn
On November 22 the trustee-manager
the right price,” Elwert tells Splash.
before the post-Lehman Brothers
of Rickmers Maritime warned that the
downturn was over. Only experienced and
trust could struggle to continue as a
and to mix the fleet up more between
motivated management will keep owners
going concern as a default on an interest
Indian-flagged and other registries.
afloat in these turbulent times.”
payment looms. Rickmers Maritime is also
partners, expanding its tanker fleet as and
The aim is to pursue younger tonnage
Moreover, other sectors could be entered, Elwert says. “The focus of the company is to
Contrasting Japanese plays Japanese shipping giants Nippon Yusen
in default under terms of the agreements of bank loans extended to the shipping trust and its subsidiaries.
strengthen its presence in the tanker
Kaisha (NYK) and Mitsui OSK Lines (MOL)
segment, yet we will keep our options
took different tacks in Singapore this
exodus of directors at struggling FSL,
open, scout and consider possible
year, the former expanding and the latter
ostensibly over the appointment this
ventures into other ship type segments
canning a subsidiary.
September of a new CFO.
Meanwhile, there has been a noticeable
www.splash247.com 13
PORT
PSA plans ahead Despite current tricky trading conditions, the country’s top terminal operator continues to build business and tech partnerships
A
mit tricky conditions this year with
Asian hub for the group.” CMA CGM
slovenly throughput reflecting the
also took over Neptune Orient Lines,
anaemic state of world trade, PSA
Singapore’s flagship line, during 2016.
guided vehicles (AGVs) for its container
PSA is also determined to be at the
terminals, bringing the fleet to 30 units.
Singapore, the island state’s premier port operator, continues to future proof.
said in a release. In June, PSA bought 22 new automated
forefront of tech developments linked to
Operating 24/7, the AGVs will be
the ports and transportation industries.
used to transport containers between
year for any container port around the
In May, for instance, it launched PSA
the quayside and the container yard
world, Singapore port moved a total
unboXed, a corporate venture capital
completely without human drivers.
throughput of 25.57m teu in the first ten
arm that invests in start-up businesses
Delivery is expected in the second quarter
months, down 1.7% from 26.01m teu in
involved in IT and data analytics and
of 2017, and the new units will join the
the previous corresponding period.
automation for handling containers and
existing eight hybrid-powered AGVs
other cargo.
operating at Pasir Panjang Terminal.
In what will not go down as a banner
Nevertheless, PSA has moved to cement more business throughout the year. In March PSA announced that joint
PSA unboXed will initially have
PSA is in the midst of building an
a fund of S$20m ($14.6m) for its
automated port in Tuas to the west of the
venture Cosco-PSA Terminal will invest
incubator programme, which will invest
republic.
in new container berths in Singapore in
in technology such as IoT (Internet of
order to serve the next generation of mega
Things), cloud storage, data analytics, AI
container vessels.
(artificial intelligence) and optimisation,
Cosco-PSA Terminal will move from it current two-berth terminal at PSA’s Pasir Panjang Terminal Phase 1 to three new
plus engineering solutions that utilise robotics and automation. Selected start-ups will receive up to
mega berths at the terminal’s Phase 3 and
S$50,000 in seed funding initially, and
Phase 4. The new berths are expected to
will be provided with facilities at PSA’s
start operations from next year.
Pasir Panjang Terminal Building 3 in
In June CMA CGM and PSA formed a
Ong Kim Pong, regional CEO Southeast
Singapore port moved a total throughput of 25.57m teu in the first ten months, down 1.7%
Singapore. Professionals at the PSA’s
Asia at PSA International, said, “Investing
joint venture company CMA CGM-PSA
Singapore container terminal and other
in advanced port technologies remains
Lion Terminal to operate and use four
business leaders will act as mentors.
a key element in PSA’s development of
mega container berths at Pasir Panjang
“Through PSA unboXed, we want
our terminals in Singapore to meet the
Terminal Phases 3 and 4 in Singapore.
to encourage creative ideas that can
challenges of growing consolidation and
Rodolphe Saadé, vice chairman of
improve and revamp LogTech (Logistics
mega-alliances calling at our port.”
CMA CGM, described the venture as
Technology), increase port productivity
“a significant step, demonstrating the
and enhance the integration, security and
for the new 65m teu port that could look
ongoing importance of Singapore to
performance across the constituents of
like a futuristic multi-storey carpark when
our strategy, and delivering on our
global supply chain logistics,” Tan Chong
completed in 2030.
commitment to making Singapore the
Meng, group CEO of PSA International,
In Tuas dredging is already underway
www.splash247.com 15
M3 MARINE GROUP One of Asia’s largest independent Offshore Shipbroking & Marine Consultancy groups. M3 Marine Offshore Brokers • •
•
Chartering (Time & Bareboat) Sales & Purchase (including Newbuildings)
M3 Marine Valuations Pte Ltd
Offshore Marine Assets Valuation - Offshore Vessels, Equipment, Rigs, etc.
M3 Marine Expertise • Market Research • OCIMF OVID & IMCA CMID Inspections • Project Analysis • IMCA Dive System Audits • Expert Witness • FMEA Authoring & Auditing • DP Consultancy / Annual DP Trials • Pre-Purchase Survey Inspections • Technical & Commercial Due Diligence
1 Commonwealth Lane #0
www.m3marine.com.sg M3 Marine Offshore Brokers: mail@m3marine.com.sg M3 Marine Expertise: expert@m3marine.com.sg ONE Commonwealth Singapore 149544 Tel: +65 63274606
2017
Fullerton Hotel, Singapore Monday, April 24
Visit www.splash247.com/forum or contact Grant Rowles on grant@asiashippingmedia.com for details Sponsors:
OFFSHORE
Barely hanging on It’s been one of the worst years in memory for anyone in Singapore connected to oil and gas. The government has decided to step in
O
n November 25 the Singapore
The minister for trade and industry
On the capital side of the business M3
government stepped in with a
S Iswaran commented: “While there has
has seen too many ships being built with
$1.1bn package to protect the
been a general slowdown in economic
no buyers and values dropping off 40%+.
nation’s hard hit offshore marine sector.
growth, the impact has been uneven.
On the chartering side the brokerage saw
For thousands of citizens made redundant
The marine and offshore engineering
the utilisation of assets plummet along
from the sector the move came too late.
industry, in particular, is facing a deep
with charter rates.
Arguably, no other industry in Singapore
and prolonged downturn due to cyclical
Meade observes that distress sales are
has been more hard hit than offshore this
and structural forces. Consequently, the
now coming in thick and fast as there are
year.
industry’s financing challenges have
no willing buyers at reasonable market
intensified in recent months. Some
values.
The measures include boosting International Enterprise (IE) Singapore’s
industry consolidation is inevitable as
finance scheme and the reintroduction of
companies restructure.”
government backed bridging loans. The bridging loan scheme will help
The move by many Asian governments
“This is the start of what I can see as real pain for some owners, especially those with older equipment,” Meade says.
– including in China, South Korea and
The definition of older equipment has
Singapore-based companies borrow
Taiwan – stepping in to support shipping
swiftly moved from 20 years down to 10
S$5m each for a tenure of up to six years
lines and shipyards in recent months
with some new equipment out of China
to finance their operations and bridge
has proved controversial with many
being sold at distress levels, he warns.
short-term cash flow gaps. In addition,
suggesting the state interventions will
IE’s existing Internationalisation Finance
only serve to lengthen the shipping and
many offshore firms seeking judicial
Scheme (IFS), which provides project/asset
offshore downturn. A survey carried in
management this year – including Technics
financing support for companies, will be
the most recent issue of Maritime CEO
Oil & Gas, Swiber Holdings and Swissco.
enhanced, the release stated.
magazine found that 76% of the more
For bridging loans, the maximum loan quantum for each borrower group will be S$15m, while for IFS it will be raised
Singapore has been rocked by
Meade saw the downfall of Swiber
than 600 respondents were against
Holdings, an oilfield services company
government interventions into the sector.
which filed for judicial management in July, a long way off. He describes the
to S$70m per borrower group from the
Ferocious storm
current S$30m. The government will
“We are navigating a storm like we have
take on 70% of the riskshare for both
never seen before and the end is not
measures.
in sight.” That’s the words of respected
the negative sentiment it has brought
demise of the firm as Emperor’s New Clothes syndrome. “The knock on effect of Swiber is
offshore broker Mike Meade. Meade
to the market, especially to those
offshore sector, exploration and
who heads up M3 Marine, a Singapore
undercapitalised and over leveraged
production companies, oil and gas
brokerage and consultancy focusing on
companies out of Singapore and to
equipment and services companies and
offshore, is also a regular commentator
some extent Norway, which was already
suppliers, can all apply for these schemes.
on the sector for Splash.
evident,” Meade says.
Shipyards, contractors, the struggling
www.splash247.com 17
OFFSHORE
and nearly all were highly geared. The 12 companies highlighted as having high short-term debt levels are ASL Marine, Ausgroup, Ezra Holdings, Ezion Holdings, KS Energy, Mencast, Marco Polo, Nam Cheong, Pacific Radiance, Vallianz and Vard Holdings. “[T]ime may just not be on the side of many small and mid-cap industry players,” the report warned. Since then the Singapore Exchange (SGX) has been cluttered with frenzied announcements from other offshore names trying to defend the state of their stretched balance sheets.
Pacific Richfield carved up This July Seacor Marine bought 11 AHTS
Swiber sets the news agenda
vessels from Singapore’s Pacific Richfield,
effect in Southeast Asia with companies
according to brokers Fearnley Offshore
Swiber’s messy decline – initially going
soon to collapse under the financial
Supply.
for liquidation then pulling an about
strains,” says Splash offshore columnist
turn and opting for judicial management
Andre Wheeler.
– set investment circles on high alert.
Pacific Richfield put its entire 40-strong fleet up for sale at the end of last November as part of what it termed as
The company is now under investigation
Splash Chat dishes the dirt
by the authorities for its financial
Speakers at this August on our live Q&A
in Singapore described the move at the
disclosures in the run up to its downfall.
on Splash Chat told readers Swiber’s
time as a distressed asset sale.
Reaching Swissco followed suit last
fall was widely seen ahead of time by
month after reached what it described as an “impasse” with lenders. “A significant gap persists between the
Singapore’s offshore community. “Swiber was a train wreck in slow motion,” commented Venkatraman
a “restructuring exercise”, while brokers
The vessels bought by Seacor will be gradually reactivated from present layup status and renamed with a Seacor prefix. “We expect Seacor to mobilise some
group’s aim of sustaining its business in
Sheshashayee, CEO of Miclyn Express
of the vessels to Middle East and West
the long term and the position of these
Offshore.
Africa,” the broker anticipated.
lenders,” Swissco explained.
“The reality is the balance sheets of
Indonesian national Rony Sudjaka
these companies cannot meet their debt /
founded Pacific Richfield in 1989.
diversified into rigs in mid-2014 just
bond commitments. Working capital was
Sudjaka’s father worked in Hong Kong
ahead of global oil prices plunging.
used to grow bad businesses and with
at the old Taikoo Shipyard from 1926,
Swissco is weighed down by $147.5m in
reduced revenues they don’t have the
before moving back to Indonesia to do
debts with just $1.2m in cash, unable to
cash to survive let alone pay debt,” said
contracting work.
make key repayments.
M3’s Meade.
Swissco, originally an OSV operator,
When Swiber filed for judicial
A survey carried by Singapore’s
management in July it sent many other
Business Times four months ago showed
Singapore offshore stocks into a tailspin.
the precarious financial state of many of
“The OSV market and marine service
Singapore’s offshore listed firms.
provider market is becoming increasingly
Business Times drew on data released
Sudjaka himself, now 80, has been in the OSV business for more than half a century. Meanwhile, at the end of October Singapore offshore shipbuilder and vessel owner ASL Marine Holdings applied to
messy and under financial pressure. This
as of August 19 on Bloomberg, latest
the Singapore Exchange for a one month
step by Swissco will place increasing
company results, and analyst reports.
extension to both hold its AGM and
pressure on the likes of Ezion Holdings
18
too long before we start getting a domino
Of the 14 companies on the list, 12
and Triyards, both of which have interests
had short-term debt of over S$100m
in Swissco. I don’t think it is going to be
($73.5m), 10 had negative/low cash flow,
Singapore Market Report 2016
release its latest set of quarterly results, a sure sign of difficulties. Similar in business scope to ASL, Otto
OFFSHORE
Marine has been taken over this year
of a first vessel for Tasik Subsea, a new
and delisted. Ocean International Capital,
subsea services company set up by former
One of the prominent names in
owned by Datuk Seri Yaw Chee Siew,
Hallin Marine boss John Giddens and M3
our Splash Chat offshore discussion
Otto’s executive chairman and controlling
Marine’s Meade. The pair were on hand in
mentioned earlier was Miclyn Express
shareholder, took over Otto and delisted
China to watch the diving support vessel
Offshore’s (MEO) Venkatraman
the company in September.
Southern Star slide down the slipway. The
Sheshashayee (better known simply as
vessel now goes on a five-year bareboat
Shesh). In the top job since April last year
charter.
Shesh is determined to forge MEO into a
Elsewhere, under pressure Ezra Holdings received a fillip at the end of September when Japanese shipping
During the launch ceremony, Giddens
the third quarter of 2017.
top 10 OSV global player.
major Nippon Yusen Kaisha (NYK) came
commented: “At the outset we decided
in for a 25% stake in Emas Chiyoda
to build a technically advanced, cost
strategic vision,” he tells Splash, “to
Subsea, joining Ezra and Japan’s Chiyoda
effective vessel whilst working closely
become a globally reputed group, in the
Corporation.
with the charterer from the start. Those
world’s top ten, measured by fleet size,
“We are determined to achieve our
decisions have been vindicated by the
EBITDA and RoI, as well as by safety
enable us to tap into the Japanese market
economic challenges that face our
performance and operational uptime.
and NYK’s wealth of experience in vessel
industry today as a result of low oil prices
We hope to become a market leader in
operations around the world,” commented
and the general slowdown in the marine
crewboats, a preferred partner in project
Lionel Lee, group CEO and managing
industry.”
solutions, and the provider of choice of
“NYK’s participation in this JV will
director of Ezra, a man who has to had to
Then there is the news of Shel Hutton
fight off plenty of investor disdain this
and his 2014 founded company, Ultra
year.
Deep Solutions (UDS).
general and specialised offshore support vessels.” Finally in this slight chink of light for
UDS now has four vessels on order
Singapore’s beleaguered offshore scene,
however. In October, for instance,
and is looking to sign another three to
mighty Navig8 Group established its own
Sovcomflot and Singapore’s Swire Pacific
four contracts in the coming 12 months.
fleet of offshore support vessels through
Offshore ended a three-vessel joint
This includes subsea vessels not just dive
the acquisition this April of Singapore-
venture established in 2006, resulting in
support ones.
headquartered RKOffshore Management
Other partnerships have floundered
the Russian company acquiring two multi-
“UDS,” Hutton insists, “will have one
purpose icebreaking platform supply
of the youngest fleets in the world at the
vessels from Swire.
lowest cost.”
Sovcomflot has acquired the Pacific
Singapore-listed Atlantic Navigation,
(RKOM). RKOM owns 19 anchor handling tug support (AHTS) vessels, plus two newbuildings. It has another AHTS and a
Endeavour and Pacific Enterprise, Swire’s
meanwhile, placed orders earlier this
contribution to the JV, and now exclusively
year with a Chinese shipyard for seven
owns, operates and manages all three
newbuild offshore vessels to support
the energy exploration and production
vessels previously part of the joint venture.
five-year charters it has won from a
industry have created a unique
Middle Eastern national oil company. The
opportunity for Navig8 to extend its
Bright spots
diving support vessel under management. “We believe current dynamics within
order consists of five utility and two AHTS
commercial and technical services to
There have been some brighter spots
vessels, which will all be deployed in the
the offshore energy sector,” said Nicolas
however. Take May 30 and the delivery
Arabian Gulf upon delivery, scheduled for
Busch, CEO of Navig8 Group.
No yard solace
Petrobras in Brazil. The pair have shed thousands upon thousands of jobs in the past 18 months. With offshore
THE CLAMOUR CONTINUES to rise
orders plummeting both companies
to get the republic’s top two yards –
have had to rely on more repair work
fierce rivals Keppel and Sembcorp –
to fill berths.
to merge. Both have been hard hit by low
In other key yard news pertaining to these two dominant brands in the
Shipyard. Sembcorp Marine also
oil prices as well as the massive
sector, Sembcorp Marine this year
divested itself of its 30% stake in
corruption scandal surrounding
completed buying out local firm, PPL
China’s Cosco Shipyard Group.
www.splash247.com 19
CONFIDENCE TO GO WHEREVER THE JOB TAKES YOU service and quality are within your reach
the Republic of the Marshall Islands is the flag of choice for many of the world’s top shipping companies
ECDIS CHARTING & BRIDGE SYSTEMS
International Registries (Far East) Limited Singapore Branch in affiliation with the Marshall Islands Maritime & Corporate Administrators
tel: +65 6226 2726 singapore@register-iri.com
www.register-iri.com
The new Simrad ECDIS systems are type approved, competitively priced and benefit from modern and easy to learn interfaces Standalone & Integrated ECDIS Systems Excellent training and chart delivery systems “Pay as You Sail” and voyage optimization options Flexible and cost effective ECDIS configurations
www.splash247.com
www.navico.com/commercial
Splash - for incisive, exclusive maritime news and views 24/7.
SSA
‘The Singapore proposition is still there but we need to be on our toes’ An exclusive interview with Esben Poulsson, the president of the Singapore Shipping Association
Too much impending regulation remains unclear, he warns, especially ballast water management rulings coming out of the US. On CO2, Poulsson is worried. “The EU is running at a different pace to IMO,” he says, adding: “We are trying to avoid unilateral regulations from regions.” Poulsson reckons that if no solution for CO2 comes about soon, a marketbased system will likely be introduced, which is not something ICS favours. “Shipping is generally a responsible industry but given current market conditions the last thing we need are three major issues on which we are awaiting decisions,” Poulsson says, adding that ICS’s credibility within IMO should allow it to influence regulations. With his SSA hat on, Poulsson stresses there is no room for complacency. He
E
admits the city-state might have hit
sben Poulsson was elected earlier
industry perspective, is making sure
‘peak ownership’ with the number of
this year as the new chairman of the
we are ready for the almost certain
shipowners likely plateauing this year.
International Chamber of Shipping
entry in force of the IMO Ballast Water
(ICS).
“There are concrete examples of those
Management Convention, and engaging
who have relocated especially offshore,
with governments, especially the United
but there are still new companies coming,”
of the Singapore Shipping Association
States, to overcome some remaining but
he says. The Singapore dollar had been
(SSA).
really serious implementation problems.”
too strong, he relates. “When it weakened
The veteran shipowner tells Splash he
it gave us breathing space,” he recounts.
The Danish national is also president
On taking office at ICS, Poulsson identified two main challenges that he
is a “new boy” when it comes to his new
will focus on. “The first,” he said, “is
ICS role. The secretariat has been busy
show we are focused with cooperation
working with IMO Member States to make
bringing Poulsson up to speed with the
with the [Maritime & Port Authority],
further progress addressing international
reams of regulations that are hovering
[Singapore Maritime Forum] in training
shipping’s CO2 emissions, including our
over the industry.
the next generation and highlight
proposal that IMO should develop an
“Our stated priority is CO2, ballast
“All we can do at SSA,” he says, “is
incentives and giveaways,” Poulsson says.
‘Intended IMO Determined Contribution’
water management and sulphur,” he tells
for reducing the sector’s CO2, similar
Splash in an exclusive interview. “They
there,” he insists, “but we need to be on
to the commitments already made by
are each big issues and very complicated.
our toes because when you are number
governments as part of the COP21 Paris
What we at ICS can do is to try to move
one there is only one place to go. Costs
Agreement.
these agendas on so that there is clarity
are a concern, but I still think we have a
on what to do.”
great cluster.”
“But even more pressing, from an
“The Singapore proposition is still
www.splash247.com 21
Main sponsor:
Leading sponsors:
Organizer:
Partner:
HR
Getting Gen Y and Gen Z interested in shipping The maritime sector has a worryingly greying population of talent
H
uman resources issues tend
lower ends of the scale, coupled with some
to take up much discussion
quite considerable increases at the top.
at any shipowner roundtable
Unsurprisingly possibly, the
that we organise. How to get millenials
reductions are most prominent at the
to appreciate a career in shipping
junior and professional level – where
is as attractive as the likes of, say,
local recruitment is now encouraged
corporate finance or tech remains a
via the government’s employment pass
massive stumbling block, but one that
arrangement. Senior professionals (i.e.
the authorities and the private sector
team leaders) in this field of work seem to
continue to address.
have been rewarded most generously with
If you look at a city’s shipping vibrancy via the amount of HR moves going on there is only one contender for top hub
a top end average increase of over 20% compared to 2015. In contrast, the salary ranges for
board, but scattered at both the senior
status: Singapore. That’s the view of Heidi
those working within operations have
management and professional levels.
Heseltine, managing director of Halcyon
narrowed (although there does remain
Recruitment.
some consistent overlap between levels, as
based recruitment firm Talent-Merge,
you might expect). Year on year analysis
discusses with Splash key HR issues for
diverse maritime related employment
shows a continued drop in salaries, most
maritime Singapore.
opportunities in abundance, both for
obviously at junior levels. Clearly, this
commercial roles and technical roles,” she
does not mean that individuals have
population of talent. New blood is needed
says. “It is also seen to be one of the most
been forced to take pay cuts. Instead,
to reenergise and continue the success in
attractive locations globally from a work/
there seems to be more recruitment of
the next wave,” he says.
life balance perspective.”
local staff at junior levels, who are much
“Singapore continues to offer
The Maritime HR Association,
Clarence Khoh, founder of Singapore-
“The maritime sector has a greying
Khoh sees more mergers and
less likely to receive inflated ‘local-plus’
acquisitions coming up, which means that
coordinated by Spinnaker Global,
salaries. It’s quite a different picture at the
there will be qualified senior executives
published its tenth annual salary survey
more senior level though; with starting
looking for a new challenge.
earlier this year. The survey includes data
salaries generally higher than in 2015 (up
from 96 member companies, reporting
to nearly 30% more) – and director level
the past, has some very valuable ideas of
data for more than 26,000 maritime
positions seeing an increase of over 20%
how to get the youth of today interested in
professionals in 119 countries. One of
at the median.
a career in shipping.
the key findings from the poll was how
In shipmanagement, there is mixed
Khoh, having worked for tech firms in
“If we want to attract the Gen Y and
Singapore salaries rank, particularly in
impact on technical and marine, safety
Gen Z to join the maritime sector, more
light of it being one of the world’s most
and quality staff – with some patterns
needs to be done by using technology,”
expensive places to live.
again visible by job level, but also by
Khoh says. “It will be ideal if we can have
specialism. Unsurprisingly there is
students going onboard the vessel for one
highest paid chartering roles around the
either little change or a reduction seen
week and experiencing what it is like to be
globe were located in Singapore. While
at the lower end of the pay scales when
onboard a vessel , and letting them know
median salaries across this group of
compared to last year. The upper levels
that they can still access to social media,
staff remain fairly stable compared to
are generally increasing too – especially
such as Facebook and stay connected
last year, the pay ranges have broadened
for technical trainees. This is compared
with their friends. This may further gain
quite significantly. This can be attributed
to marine staff who actually see some
their interest and attract them to join the
to both a fairly consistent decrease at the
reductions at the top end – not across the
maritime sector.”
For instance in 2016, six of top ten
www.splash247.com 23
BUNKERING
Taking the LNG lead The republic is pressing ahead with all sorts of initiatives to make LNG as a ship fuel more attractive
S
ingapore as the world’s largest
each newly built LNG-fuelled vessel.
LNG as a ship fuel remains a moot point,
bunkering hub continues to play a
Newly registered LNG-fuelled harbour
one addressed by MPA’s chief executive
leading role in the development of
crafts in Singapore now enjoy a five-year
Andrew Tan, who noted in a speech this
waiver of port dues. MPA also grants
July: “It is clear that the implementation
LNG as a fuel for ships. In October the Maritime & Port
a port dues concession to qualifying
of LNG as a marine fuel is not easy and
Authority (MPA) and Singapore LNG
vessels engaging LNG-fuelled harbour
will take some time.”
Corporation signed an MOU to develop a
craft for their port operations.
Tan elaborated: “The dramatic
truck loading facility for LNG bunkering.
In January MPA awarded two LNG
MPA has committed S$2m to co-fund this
bunker supplier licences to Pavilion Gas
has narrowed price differentials,
facility.
and a joint proposal of Keppel Offshore &
relative to other low sulphur solutions.
Marine and BG Group. The pair will start
The shipping community has also
offering LNG bunkers in early 2017.
demonstrated less enthusiasm in putting
The MPA and SPRING Singapore, an agency under the Ministry of Trade and Industry, are jointly launching a technical
In July a 50:50 joint-venture company
collapse in oil prices in the past year
forth investments into building of LNG-
reference for Singapore’s LNG bunkering
was formed between subsidiaries of
fuelled vessels with the current weak
standards in early 2017.
Keppel Offshore & Marine and Royal
economic conditions. Nonetheless, we
Dutch Shell that will establish another
will need to work together to tackle the
LNG bunkering business in Singapore.
chicken and egg dilemma that stands in
To encourage the switch to LNGfuelled vessels, MPA had earlier announced a grant of up to S$2m for
How keen world shipping is to adopt
Shipping has demonstrated less enthusiasm in putting forth investments into building of LNGfuelled vessels with the current weak economic conditions
the way of the development of LNG as a marine fuel.” October’s decision by IMO member states to push through a global sulphur cap could act as the spur for LNG adoption, with Singapore likely to be ahead of the curve in the range of services it can offer world shipping.
www.splash247.com 25
2016 IN REVIEW
13 Singapore Maritime Foundation appoints Andreas Sohmen-Pao, CEO of BW Group, as its new chairman
18 Mercator Lines (Singapore) exits dry bulk 29 Chinpo Shipping Company fined
14 Nicholas Sartini named CEO of Neptune Orient Lines (NOL)
$125,698 for violating UN sanctions by carrying arms to North Korea
2 Singapore Shipping Association head Esben Poulsson elected chairman of the International Chamber of Shipping
13 Navig8 buys Singapore OSV firm RKOffshore Management
1 MOL to close Singapore bulk subsidiary
January
February
March
April
May
25 Singapore Exchange (SGX)
enters exclusive discussions to buy London’s Baltic Exchange
30 Tasik Subsea, a new subsea
services company set up by former Hallin Marine boss John Giddens and M3 Marine’s Mike Meade, kicks off with the launch of diving support vessel Southern Star.
30 Andy Hillier becomes managing director of Thoresen Shipping
14 NYK creates logistics tech startup in Singapore 23 SIVA Shipping deny reports that is insolvent 10 India’s Mercator sells its dry bulk subsidiary for S$3 2 Maersk Line switches Asia headquarters from Singapore to Hong Kong 26
Singapore Market Report 2016
June
2016 IN REVIEW
4 Seacor Marine takes 11 Pacific Richfield AHTS vessels 7 Keppel and Shell form LNG bunkering joint venture in Singapore 18 CMA CGM completes acquisition of NOL 25 Technics Oil & Gas placed under judicial management 30 Swiber Holdings seeks judicial management 23 Sembcorp Marine buys out PPL Shipyard
5 Final day for NOL as a listed entity on the Singapore Exchange
20 Ocean International Capital takes over Otto Marine, delists the company 10 days later
30 NYK takes 25% stake in Emas Chiyoda Subsea joining Ezra and Chiyoda Corporation
July
August
September
October
November
December
12 Sovcomflot and Swire Pacific Offshore end a
three-vessel joint venture established in 2006
9 SGX completes the acquisition of the Baltic Exchange 15 Swissco Holdings heads for interim judicial management 16 Sembcorp Marine offloads stake in Cosco Shipyard 22 The trustee-manager of Rickmers Maritime warns it could struggle to continue as a going concern
25 Singapore government intervenes to save struggling offshore sector with $1.1bn package
28 Creditors liquidate Swiber subsidiary, Swiber Marine Offshore 2 Swiber gets approval to extend judicial
management through to October 2017
16 Niam Chiang Meng replaces Lucien Wong as
chairman of the Maritime and Port Authority of Singapore (MPA) www.splash247.com 27
OPINION
Challenges for Singapore in shipping’s season of anomy Edward Ion, managing partner of Singapore-based Helix Media, suggests the government needs to be more laissez-faire
T
he hoary old question ‘Has
workforce and a solid legal system make
Singapore achieved international
Singapore a very attractive place for the
maritime hub status?’ has surely
global maritime community.
been answered long ago, probably back in the early part of this century. By any measure of such intangibles the
to move its capital and assets to any
city state has been on a roll for the past
location in which it believes it can make
two decades and today sits comfortably
the best return.
with the traditional centres such as London and Oslo. The mix of government and private
In shipping’s current season of anomy, Singapore faces strong headwinds. Most notably the near two year rout of
most dynamic, is perhaps the greatest
sector partnership has produced a market
oil prices has wreaked an awful havoc on
example of private enterprise and
which possesses all the attributes of a
the once booming offshore oil and gas
entrepreneurship.
major international shipping hub.
sector.
If international maritime centre (IMC)
To set this in context, the offshore oil
Companies stand or fall on free market principles. The best companies are
status is measured by the range and depth
and gas sector includes more than 25
private, free from the dead hand of the
of service companies doing business
publicly listed companies and forms a
state.
Singapore, then it may even rank as
very significant part of the total marine
number one – in fact one survey placed it
market in Singapore.
there earlier this year. But this question has become tiresome and backward looking. Singapore has reached a half century
Singapore’s response to this has been to raise the issue of government assistance for failing offshore companies. But this has raised eyebrows in the
Indeed, wherever there is significant state involvement in oil and gas companies, there is usually incompetence – and worse. Singapore should let the free market take its course in its oil and gas sector. It
as an independent nation – but what
international maritime community and
means the weaker, badly run companies
about the next 50 years?
among analysts.
will go. The best companies will thrive.
Rather like the celebrations to mark the
It has raised the question: “Is
republic’s 50 years of independence back
Singapore’s oil and gas sector in the ‘Too
in 2015 which seemed to go on forever,
Big To Fail’ category?”
the question of whether Singapore has
Or is the idea of government
achieved IMC status should be put to bed
‘measures’ (aka public subsidies) just a
now.
vain attempt to stave off the day when
There is no doubt the country’s maritime hub is a shining example of what can be achieved when vision is combined with consensus and hard work. Singapore’s founding fathers decreed
This principle has a wider lesson for Singapore’s wider long term IMC status. Subsidies and government fiscal support will only distort the market in the long run and are counter-productive. Government support is most needed in
fundamental restructuring of that sector
the training and education of a workforce
will have to take place?
which is still reluctant to seek careers in
The idea of government support for failing private offshore companies is
the maritime sector. And it can also play a role in ensuring
surely outdated and not in keeping with
that Singapore can continue to attract the
shipping was central to the nation’s
the wider goal of finding the right strategy
brightest and best people from around the
survival and so it has transpired.
to ensure Singapore survives and thrives
world to come and work in the maritime
as a maritime centre in the next 50 years.
sector with flexible and open employment
A mixture of generous fiscal incentives, geographical location, a well-educated
28
But that maritime community is notoriously fickle and has a unique ability
Singapore Market Report 2016
The global oil and gas sector, at its
practises for foreign workers.
MAXIMISE YOUR SHIP’S EARNING CAPACITY. RIGHTSHIP’S GHG EMISSIONS RATING IS USED BY CHARTERERS TO SELECT 1 IN 5 SHIPS. MAKE SURE YOUR SHIP IS THE ONE.
environment@rightship.com Rightship.com/ghgrating
“Teekay has thrived here.
Canada is admired around the world, and Vancouver is a great place to live.” Art Bensler, Executive Vice President & General Counsel, Teekay Corporation
No wonder Vancouver attracts the best and the brightest. Canada’s largest port is also the most diversified in North America, with a progressive tax regime, rock solid banking system, top tier services, and a lifestyle that’s the envy of the world. Learn more at vancouverimc.org or contact Kaity Arsoniadis-Stein at kaity@vancouverimc.org
DISCOVER THE VANCOUVER ADVANTAGE.