A long history in the industry means operators own nearly a fifth of the total tonnage of the world’s merchant fleet
reece
has reduced its tonnage tax in a long-awaited move to restore some competitiveness
to its national ship register. A package of measures passed by its parliament
will slash the direct levy on Greek flagged vessels by 70 per cent.
Officers will be taxed on this year’s income at six per cent and
lower ranks just three per cent.
Minister of merchant marine George Anomeritis says: “Our strategic
targets are to strengthen merchant marine competitiveness, to deregulate
the passenger shipping sector, to promote safety in shipping, to protect
the sea environment and to support seamen. A strong shipping industry
is closely linked to a strong Greek economy.”
The Greek flag will remain Europe’s most expensive, partly due
to the obligation to employ EU officers, but Mr Anomeritis aims to bring
it more in line with competitors without sinking to the levels of “flags
of convenience”.
A further step in the modernisation of Greek shipping services was taken
late last year when the government sold Hellenic Shipyards, the country’s
largest, to a consortium made up of Germany’s Howaldtswerke Deutsche
Werft and Ferrostal. It was the first privatisation of a national Greek
company to a consortium of foreign investors.
Greece
has a long history in the industry and its shipowners own nearly a fifth
of the total tonnage of the world’s merchant fleet. This long tradition
was founded to a great extent on the willingness of banks to offer loans
to buy ships, but today’s owners are seeking other ways of financing
their fleets. Shipping is a cyclical business – a high risk for
banks – and the number of willing lenders has halved during the
past five years.
Greek shipping firms might well take a leaf out of the book of Stelios
Haji-Ioannou, the founder of low-cost airline EasyJet, now that the
millionaire Greek is pioneering new methods of building up a shipping
fleet. Mr Haji-Ioannou took a fresh approach when he founded Athens-based
Stelmar Shipping.
Few Greek shipping companies are big enough to qualify for listing on
the New York Stock Exchange, but Stelmar achieved this in March 2001.
That Mr Haji-Ioannou came from a shipping background has certainly been
a help – his father owned the biggest independent fleet in the
world – but like any enterprising young man, he wanted to go it
alone. Stelmar Shipping was born in 1992.
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The
company bought its first oil tanker a year later and over the next eight
years the fleet was expanded to 11 ships. Stelmar chairman Peter
Goodfellow says that by the end of this year, the fleet
will number 27 vessels.
Stelmar’s strategy has been to provide shareholders with “significant
earnings visibility”. The company has built a substantial book
of forward business for its crude and oil-product tanker fleet over
the next few years.
“We have positioned the company for further growth in the generally
more stable product-tanker sector. We are pleased with the success that
we have had in securing significant time-charter coverage for both 2002
and 2003,” adds Mr Goodfellow.
Stelmar has charters this year equivalent to $100 million in revenue,
or 61 per cent of the net available days of its fleet. For 2003, Stelmar
has locked in almost $65 million in revenue and almost 39 per cent of
the net operating days of its fleet.
“Stelmar’s
charter strategy is to achieve a growing revenue stream regardless of
tanker market conditions,” says Mr Goodfellow. Forward charters,
he says, provide shareholders with significant earnings visibility for
the years concerned. “We don’t want to be part of this gamble
that is the cyclical nature of shipping. In addition to time charter
revenue already secured, each $1,000-a-day of revenue generated by each
vessel trading under spot voyages throughout 2002 will contribute 30
cents per share,” he adds.
In the present world economic climate, the spot market could prove to
be more volatile. Mr Goodfellow adds that Stelmar is “actively
looking for other opportunities” and is considering mergers and
acquisitions.
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Another
Greek who has built up his own shipping fleet is Mediterranean
Maritime president George Gyftakis,
who bought his first vessel in 1980. He says: “The old Greek shipowners
taught us that the way we should manage ships is through traditions.
I believe in having very well-maintained ships, which have a good resale
value. By having good ships we earn the trust of the charterers.”
Shipping was always a complex business, from maximising the use of a
vessel – and its eventual disposal and replacement – to searching
for new customers. “It has now become a science,” says Mr
Gyftakis. “The only thing we have left from the old days is the
tradition of being a shipowner.
“The Greeks are the only people who know how to operate ships at
quite a big percentage lower than the operating costs of other shipowners
in the world. So we are much more competitive than others.”
Mr Gyftakis rapidly expanded his fleet, buying eight ships – all
bulk carriers – in the late 1990s following a deal with Bank of
Scotland. “Bankers have generally had bad experiences with shipowners,
with many bad loans, and they still feel distrustful of shipowners,”
he says.
This is a cyclical business and risky for the banks, so lending has halved
“But
they should not judge all shipowners in the same way. I have had a five-year
relationship with Bank of Scotland. We have a fantastic relationship
and the bank is always there to assist.”
Mr Gyftakis says his medium-term goal is to expand his fleet to 10 or
12 ships, no more than 10 years old. “My long-term goal is to build
new ships, but again no more than 10 or 12.”
He remains very much the traditional, independent Greek shipowner. “I
want full control of my business. If investors want to invest in my
company, they are welcome, but they have to accept that the management’s
decision is always final.”
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