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bulker diverSification

Vijay Rangroo,managing director of MTM Shipmanagement looks a relaxed and happy man and says “business is good”.The Singapore-based manager now has 38 ships under full management with vessels owned by MTM as well as owners in London, Greece,Norway and Japan, a major market for the manager. The shipmanager has been particularly

focused on regulation, an area of prime importance in the oil and chemical tanker sectors in which it specialises.MTM is now looking to bring its skills in these sectors across to the dry bulk shipping business. “Going forward we are not shifting our focus,we are transferring our skills onto the dry bulk fleet,” he says. With the skills the company has

developed in managing tankers he sees little difficulty in bringing this expertise to another sector.The manager will use the same system of self-regulation and crew matrix it uses in the tanker sector.With growing regulation and vetting for bulkers a demand is seen for quality management. MTM only decided to make the move into a new sector at the beginning of this

year, and is yet to get any bulkers on its books.To make the move into managing dry bulk vessels Rangroo said they were talking to existing clients the company manages tankers for. Rangroo stressed they are not aiming

to grow simply for the sake of growing but also noted that without growth there was stagnation of the business. However,while business is good the

manager is finding some cost pressures. The US dollar, the currency of all MTM’s income has decreased some 20% in value against the Singapore dollar over the last year.While all its dealings are in US dollars its expenses on the ground here are in Singapore dollars.“It has become a big headache.We are not in the business of hedging and do get hit directly,” he says. Higher costs such as housing rental

also impact when it comes to employing superintendents.Due to a lack of superintendents locally all the manager’s superintendents are expatriates meaning additional costs such as schooling and housing.

Steeringa Steady courSe

Slow and steady expansion is the course being taken by shipmanager Ishima. “The business is going pretty well.We

are slowly expanding,” says Danillo Raffa, managing director of Ishima. Ishima is the Singapore-based shipmanagement arm of Italian shipowners d’Amico. The company had set a target to have 27

ships by the end of last year, however, failed to meet this.“We plan to expand the fleet to 30 ships by year end,” he explains. So far this year the company has taken in

three MR product tanker newbuildings from South Korea for Glenda, a joint venture between Glencore and d’Amico.Raffa says by June they hope to take on another vessel, and two or three more in the second half of the year.The company manages a mix of tankers and bulkers both for d’Amico and some of its joint ventures, as well as third party clients. While many shipmanagers emphasize the

benefits of a large fleet and economies of scale Raffa believes that 40 ships is the maximum size that would make sense for Ishima.“We like to keep all the ships well controlled,” he says. If the fleet was to be larger than 40 the

company would have to restructure its organisation.On the economy of scale front

while Raffa does admit this works in the buying of some supplies, but says it does not for the largest operating cost of crew wages. Crew wages make up 60% to 70% of operating costs and salaries for the top four officers onboard tankers continue to rise. In terms of the current market he

comments:“It is very competitive as far as I can see with new companies mushrooming in the market.Of course they offer a very competitive budget.” Ishima though chooses to compete on

quality rather than price.“We prefer to keep our standards pretty high. If you have a low budget you cannot keep standards high,” he says. With many of the ships the company

manages on charter to oil majors Raffa says they cannot afford to have even one Port State Control detention as this would be highlighted in a negative way.“I cannot allow my fleet to have bad result in any inspection,” he states.

Seatrade Singapore Report 2011


Courtesy of the SingaporeTourism Board

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