Page 1

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.

Singapore Market Report 2016  

Back for the fourth time Splash has launched its annual Singapore magazine, a unique take on what’s been going on in the world’s most vibran...