Get documents about "TCE and Opex Projections
Document Sample
REVOLUTIONS: MOVING FORWARD IN THE
SHIPPING INDUSTRY – A NEED FOR CHANGE
Nov 11, 2011
Table of Contents
Introduction (1) p 3- 4
Bank Market (2) p 5- 7
Capital Markets (2) p 8 - 29
Technology, Safety and Reg’s (3) p 30 - 34
A Need For Change (4) p 35 - 37
1 Revolutions
“The landscape and profile of the shipping industry is changing.
Market factors are reshaping and corporatizing the traditional
European shipping company – creating a need for change.”
3
1 What’s Happening in Shipping
Changes in key areas are causing fundamental change in the
way companies operate:
• Bank market
• Private Equity / M&A
• Change in technology, safety and regulations
• Organisational catch-up
4
2 Capital Financing
Traditional Bank Market
5
2 Bank Consolidation (accelerated during crisis)
6
2 Bank Participation in Greek Shipping
Bank Activity in Greek Shipping
45
40
35
Number of Banks
30
25
20
15
10
5
0
1992 1995 1997 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Year
Greek Banks Int'l Banks in Greece Int'l Banks Linear (Int'l Banks)
7
2 Capital Financing
Private Equity, M&A
View of Economic Fundamentals
8
2 What’s Happening in Shipping
Global Economic Growth
Distribution of World
Global Growth +90% [2002-2010] Economic Growth
2010 level 63 trillion USD
Economic growth
becoming more non-
OECD centric
Note: GDP data basis current US dollars
Data Source: World Bank, Clarksons
9
2
World Trade Vs GDP (% growth)
HIGHLY CORRELATED
Approx 90% of trade
carried by ship
Data Source: OECD /IMF
10
2 Growing Commodity Trade
Growth in Base Commodity Trade
10
Liq Gas
9
Oil
8 50%, 3 billion tonnes
7 Other
billion tonnes
6
Container
5
Minor Bulk
4
3 Grain
2
Coal
1
Iron Ore
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Data Source: Clarksons
11
2 Capital Financing
Private Equity, M&A
View of Energy Demand
12
2 Energy Demand
World Primary Energy vs. GDP (% growth)
HIGHLY CORRELATED
Data Source: BP / EIA / Clarksons
13
2 Energy Demand
World Primary Energy Consumption
9%
12%
20%
Data Source: BP / EIA / Clarksons
14
2 Energy Demand
Oil Consumption per Capita
OECD =5.4 x China
OECD =13.5 x India
World Av =1.8 x China
World Av =4.6 x India
Data Source: EIA/US Census Bureau
15
2 Energy Demand
Coal Consumption per Capita
Data Source: BP
16
2 Energy Demand
Natural Gas Consumption per Capita
Data Source: Clarksons 17
2 Capital Financing
Investment Bankers Like to Travel
18
2 Greek Movement into Equity Markets
Number of Greek Shipping Companies
Listing in US &UK Equity Markets
8
7
6
Number of Listings
5
4
3
2
1
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Year Greek Based Companies
Data Source: DNB Athens 19
2 Wall Street M&A Activity
Wall Street money fuels major consolidation and investment in shipping.
Major structural change in the industry.
2004
– $1.3 billion OSG investment in Stelmar
– $740 million Fist Financial invests in 32 MISC bulkers
– $450 million Genco investment in a fleet of bulkers
2006
– $471 million OSG investment in Maritrans
2007
– $2.2 billion Omaha investment in OMI Corp
– $405 million Dryships investment in Ocean Rig
– $367 million Sea Star Capital investment in Minoan Lines and Hellenic Seaways
– $400 million Cardiff Marine
2008
– $2.4 billion Excel purchase of Quintana
– $300 million General Maritime acquires Arlington Tankers
Data Source: DNB Athens 20
2 Wall Street M&A Activity
2008 cont’d
– $250 million Stena Bulk investment in Paradise Tankers
2009
– $325 million Lomar Corp. investment in Allocean
– $180 million Aries Maritime (undisclosed)
– $136 million Thoresen Thai aquiring UMS
And there are many more…
Data Source: DNB Athens 21
2 Private Equity Activity
Data Source: NFS 22
2 Private Equity Activity
Data Source: NFS 23
2 Private Equity Success
Data Source: Internet FBR 24
2 Private Equity Success
Data Source: Internet FBR 25
2 The Wall Street Change
Tanker Fleet
26
2 Available Capital Spurs Investment
Tanker Orderbook Development*
1400 50
Handy 25-39
42 39
2005-07: 40
1200
MR 40-54
40
orderbook as a % of existing fleet
76% increase
1000 28 Panamax
number of ships
55-84
27 27 26 23 30
800
Aframax 85-
20 21 124
600 17 20
Suezmax
12 13 14 125-199
400
9
7 7 10 VLCC 200+
200
% of fleet
0 0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 now
Data Source: Clarksons
27
2 Available Capital Spurs Investment
Crude & Product Tanker Fleet Development
Crude Tanker Product Tanker
57% (ytd) 111% (ytd)
Data Source: Clarksons
28
2 Available Capital Spurs Investment
Tanker Existing Fleet & Orderbook
Tanker Fleet Tanker Orderbook
1,000 946 200
883
900 175 163
800 148
150
700
number of ships
number of ships
119
565 125 110
600
500 445 100
422 422
400 75 68
300
50
200 29
25
100
0 0
VLCC S'max A'max P'max/LR1 MR Handy VLCC S'max A'max P'max/LR1 MR Handy
Data Source: Clarksons
29
3 Change in Technology, Safety and Regulations
During this same period…
• Vessels undergo a significant advance in technology
• Shipyards design even larger vessels
• Advances in design, technology and computerisation on
board stay ahead of head office automation and change.
30
3 Change in Technology, Safety and Regulations
Data Source: Intertanko 31
3 Change in Technology, Safety and Regulations
Data Source: Intertanko 32
3 Regulatory Trend
Implementation of Mandatory Regulations
40
35 35
35 33
30
Number of Requirements
27
26
25
20 18
16
15
10
10 8
7
5 3
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Data Source: Eletson Corp 33
3 Regulatory Trend - Highlights
Increased safety and environmental regulations are an added burden on organisations.
2005
– California Clean Coast Act
2006
– California Coastal Water Ballast Regulation
– Port State Control Concentrated Inspection Campaign (MARPOL Annex 1)
– Air emissions and Garbage Production Monitoring
– Regional Ballast Water Legislation
– New requirements for Diesel Engine and Diesel Electric Engines fuels in Regulated California
Waters
– Guidelines for Changing Over to Low Sulphur Content - SECA Area
2007
– PSC – Paris & Tokyo MOU, ISM implementation
– Environmental Protection Measures - Engine room bilge water and/or Sludge transfer to
dedicated slop tanks
2008
– Vessel General Permit (VGP) Requirements
– “Paris and Tokyo MOU’s on Safety of Navigation – SOLAS
2009
– California Air Resources Board (CARB) - Essential Modification Exemption
2009
– ECDIS Mandate
Data Source: Eletson Corp 34
4 The Way Forward
Where do we go from here?
35
4 A Need For Change
Accessing capital markets in lieu of traditional bank financing has exerted new dynamics onto
the traditional European shipping company.
– Pressure to perform puts the whole organization under a microscope (new
board members, third party investor considerations, etc)
– significant reporting and corporate governance requirements
– The quarter end mentality
‘Super sized’ competitors. These companies have stakeholders expecting consistent returns,
at time conflicting with traditional ‘long view’ of the private shareholder
Complicated regulatory environment
36
4 Where Do We Go From Here
Behavioral Change
Traditional industries = very formal structures = sink under their own weight
Attract young talent (balance between oceangoing experience and outside talent)
Systems over people
Technological changes and improvement
Decentralized / role relevant authority
Essence of the public model not loss of control but increase in quality
Supplier Development
The Japanese supplier model (‘no one can do it alone…’)
Long term collaborative relationships
Encourage joint system integration
37
4 A Need For Change
Thank you!
38
Related docs
Other docs by HC120807124549
Shelly Cashman Series Discovering Computers AL ink to the Future - PowerPoint
Views: 18 | Downloads: 0
