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Damen Takes Over DSME’s Mangalia Shipyard

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  • As Overseas Shipholding Cuts Loss in Q3

Dutch Damen Shipyards Group has entered into a share purchase agreement with South Korea’s Daewoo Shipbuilding & Marine Engineering for the acquisition of DSME’s majority share in Daewoo Mangalia Heavy Industries (DMHI) in Romania.

As informed, the sale of the shipyard, which is worth KRW 29 billion (USD 25.9 million), is expected to be completed by the end of this month.

With the acquisition of DSME’s 51% share in the shipyard, Damen said it “takes the next step in strengthening its international shipbuilding and ship repair activities”.

The Daewoo shipyard in Mangalia was established in 1997 as a joint venture between Daewoo and 2 Mai Mangalia Shipyard with Daewoo as majority shareholder.

Located on the Black Sea coast, the yard is spread over an area of 980,000 square meters, has three drydocks with a total length of 982 meters and 1.6 kilometers of berthing space. The docks, with a width of between 48 and 60 meters, are expected to provide Damen with the capacity “to cater for the largest maritime vessels and structures”.

Damen already owns a shipyard in Romanian Galati, on the banks of the River Danube, which is currently the group’s largest shipyard. With the Mangalia shipyard, the company said it will have its two largest shipyards in close proximity to one another.

The Romanian competition authorities have already approved the envisaged transaction, according to Damen. Furthermore, constructive meetings are being held with the Romanian government in relation to future cooperation in Mangalia and the further development of the country’s shipbuilding industry.

In a separate statement, DSME explained that the sale of the insolvent subsidiary will help the company to focus on Okpo Shipyard and improve its financial structure.

“The financial structure of Daewoo Shipbuilding & Marine Engineering will become more solid as the sale of the Mangalia shipyard will eliminate the burden of supporting subsidiaries,” an official from DSME said.

The two parties have been negotiating the sale of Mangalia shipyard since early 2016. The facility has been undergoing capital erosion since 2008 due to the lack of orders amid the global financial crisis, production delays and accumulated losses.

The sale is in line with a self-rescue plan of the financially-troubled shipbuilder which includes asset sales and workforce reduction, among others. Unveiled in March this year, the restructuring plan sets out three key principles – debt restructuring, financial assistance and bearing the burden of losses by all stakeholders.

As of November 10, DSME implemented KRW 2.48 trillion, about 90% of its target total of KRW 2.77 trillion planned under the restructuring scheme.

The improvement in the financial performance can be seen in the company’s results for the third quarter of this year which show that DSME delivered a profit of KRW 45.7 billion, against a net loss of KRW 284 billion reported in the corresponding period a year earlier.

In the meantime, NYSE-listed Overseas Shipholding Group (OSG) managed to narrow its net loss to USD 6.3 million in the third quarter of this year from USD 98.7 million reported in the corresponding period of 2016.

Shipping revenues were USD 93.3 million for the quarter, down 18.3% compared with the third quarter of 2016. The decrease in shipping revenues primarily resulted from weakening market conditions and reduced charter rates.

TCE revenues for the third quarter of 2017 were USD 84.9 million, a decrease of 22.6%, compared with the third quarter of 2016, primarily due to lower average daily rates earned as a result of a continuing excess supply of vessels in the market and the shift from time charter contracts to spot market charters, according to the company.

“The solid performance of our niche market activities was once again the key take away from our third quarter results,” Sam Norton, OSG’s President and CEO, stated.

“Earnings from spot market voyages disappointed, but a strong balance sheet, continued focus on cost control and a belief that upside potential now outweighs downside risk in accepting short-term market challenges leads us to be optimistic about the future,” Norton added.

For the nine months ended September 30, 2017, the company posted a net income of USD 2.3 million, against a net loss of USD 18.1 million posted in the same period of 2016.

OSG’s 24-vessel fleet consists of eight ATBs, two lightering ATBs, three shuttle tankers, nine MR tankers, and two non-Jones Act MR tankers that participate in the US MSP.

World Maritime News

Maritime

Reps Demand Restructuring Of Terminal Operators, NPA Licensed Agents

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Reps Demand Restructuring Of Terminal Operators, NPA Licensed Agents

 ..Says “Our goal is to effect changes that will restructure and position it to compete in the global space

The House of Representatives Committee on Ports and Harbour has demanded the restructuring of Terminal Operators and Nigeria Ports Authority (NPA) Licensed Agents in the country.

Rep. Nnolin Nnaji, Chairman of the committee, disclosed this at the interactive session with terminal operators and NPA licensed agents in Abuja on Thursday.

“Our goal is to effect changes that will restructure the unique and high-tech sector and position it to strategically compete in the global space.

“This sector is very dynamic and we must constantly review the standards, facilities and operational guidelines to keep pace with its obtainable global best practices,” he said.

The lawmaker reiterated the committee’s readiness to ensure that the sector remained one of the best through appropriate legislation and oversight.

“This is to bequeath to Nigerians, ports and harbours that are properly regulated and better managed for greater efficiency.

“It is important to harmoniously promote the objective of professionalising the modus operandi of this sector to improve our country’s Gross Domestic Product and revenue generation.

“We intend to collaborate with relevant stakeholders in the industry to ensure that appropriate avenues are created for economic development,” he said.

He said the committee was poised to make the ports a hub for better non-oil revenue generation, adding that the house would continue to support total rehabilitation and upgrading of ports, harbours and allied services.

In her contribution, the Registrar and Chief Executive Officer, Council for the Registration of Freight Forwarders of Nigeria, Urunta Chinyere, advised terminal operators to adopt electronic mode of payment.

“This is to reduce human interface in their operations,” the officer said.

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Maritime

SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation

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SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation

…Sonny Eja is President, Ekere is 1st Vice President; Iroghama Ogbeifun is Chairman, Technical Committee

When Air Peace made its innocent maiden flight from Nigeria to London on March 30, 2024, the symbolical flight achieved two things: first, it broke the unholy equilibrium fare price amongst available airlines.

Secondly, the gesture sent some powerful signals to the entrenched operators, that a determined indigenous operator has finally berthed; and momentarily, the extortionate fare crashed…! Now, if we should replicate this very gesture in the maritime, with a provision of a ‘national’, but privately run vessels/ carriers, how far or fast would carriage charges crash?

The Air Peace has silently made a deafening statement: no amount of plea would crash prices, except the nation can assertively provide a functional alternative.

SOAN Inaugurates New Leadership, Boosting Hopes Of Crushable Inflation
SOAN President, Sonny Eja.

The distance between Lagos and London by flight is about 6 hours and 40 minutes. The distance between London and New York by flight duration is 7h 30m. So, how come the cost of flight from Lagos to London is always twice as much, compared to the cost of flight from London to New York…? 

The answer is simple: Nigeria is an orphan, and there is no effective competition to mitigate arbitrariness. In the maritime sector, however, the country’s fate is worse: shippers are paying twice for cargo freight. Same for handling charges. There was even a time they were paying for as ridiculous a charge as the ‘Weekend’ levy, in the event that you are unlucky to come for clearing by weekends!

 The growing inflation, the poor masses albatross is both artificial and conspiratorial!

First, government’s understanding of the industry is warped and its support, insignificant. The Government functionaries who should assist both the shippers and stakeholders were often either insincere, ignorant or easily cave in under politicians’ pressure. 

No one is as hopeful as the hunter’s wife: she knows her husband did not keep any beast in the forest, yet, she joyfully sings lullaby for the baby on the mat, as she washes the soup pot and grinds the pepper, as she awaits the husband’s return! And the hunter never disappoints.

It is in the same spirit, that shippers would tomorrow, celebrate the inauguration of the incoming President of the Ship Owners Association of Nigeria SOAN, Sonny Eja.

Those who know him at close range described him as a highly focused, truly inspired and totally committed investor, who never disappoints. He is sold to the cause of the shipping industry development. 

Unarguably, he is acknowledged as a resourceful long runner, who often is not only self-motivating, but equally enjoys the special ability to motivate others  Some said it is for this reason that he is so treasured, by the SOAN maiden Arrowhead and Nigeria’s foremost shipping magnate, Engr. Greg Utomwen Ogbeifun.

The President, fortunately, will be fully assisted by tested and trusted ship owners, with enviable skills and technical know-how.. promoters 

These include Dr Louis Ekere as SOAN’s 1st Vice President; Mr. Gbolahan Shaba, the 2nd Vice President; Mr.Babalola Adefariti – Financial Secretary/ Treasurer; Mr. Bem Garba –  Chairman, Training & Capacity building Committee; the shipping industry Amazon, Ms.  Iroghama Ogbeifun as Chairman Technical Committee; Ms. Bassey Adie -Chairman, Ethics & Privileges Committee; and finally, Mr. Emmanuel Okene, who is the Chairman, Finance and membership Committee.

The Doyen of the Maritime industry, High Chief Adebayo Babatunde Sarumi once congratulated SOAN for lifting Nigeria off the lackluster club of 10-Percenters. 

Now, the whole nation would probably look up to SOAN, to midwife a ‘national carrier’ and permanently crash the menace of intractable inflation!

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Maritime

Smugglers Altering Vehicles’ Chassis Numbers–Customs

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Smugglers Altering Vehicles’ Chassis Numbers–Customs

Mr Chedi Wada, the outgoing Comptroller of the Federal Operations Units (FOU) Zone “B”, Kaduna says smugglers are now altering vehicles’ chassis numbers in the bid to perpetuate their nefarious activities.

Wada spoke to newsmen on Wednesday in Kaduna after handing over the leadership of the unit to his successor, Mr  Ahmadu Shuaibu.

He, therefore, underscored the importance of public awareness and compliance with government policies.

Wada reflected on the myriad of achievements and challenges encountered during his tenure.

He commended the resilience of his team in tackling the hurdles posed by nationwide border closures.

According to him, with unwavering support from the Comptroller-General  (CGC), Mr Bashir Adewale, saying that they have successfully curbed smuggling activities within the zone.

He said,  “FOU Zone ‘B’ Kaduna is now well-equipped and effectively managed, marking significant strides during my six-month stewardship.”

Wada acknowledged the pivotal role of the media in showcasing the unit’s efforts while urging the officers to prioritize knowledge acquisition and diligent execution of duties.

He said, “Total commitment and dedication have been the cornerstone of my successes.”

Wada also urged  his colleagues to follow suit,  disclosing that with his redeployment to the NCS Headquarters in Abuja, he will work under the Enforcement, Investigation, and Inspectorate Unit

He also assured of his continued dedication to service, WARING smugglers that his successor is an enforcement expert who is prepared to take charge.

Wada expressed confidence in the incoming comptroller’s abilities to build upon the foundation laid, signalling tough times ahead for the smugglers.

Wada’s redeployment marked the end of his duty of combating smuggling and fostering organizational commitment within FOU Zone “B” Kaduna.

It was reported that until his redeployment, Shuaibu was the Comptroller, Ogun I Area Command, Idi-Iroko. 

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