SMEM: Gulf Invests in Super Vessels Despite Maritime Challenges

The opening plenary session of Seatrade Middle East Maritime saw the region’s key players describing the challenging environment the industry faces – but offering some powerful solutions to the audience of industry professionals from 67 different countries.

Chaired by Sky News TV anchor Jeremy Thompson, the panel of eminent keynote speakers included HE Sheikh Daij bin Salman Al Khalifa, Chairman, ASRY, Bahrain, who said: “The challenges our industry faces are a matter of concern especially here in the GCC, as we are net importers. Unfortunately, changes never come alone they come in groups, especially in the maritime sector. Stagnating volumes, rising fuel prices, declining asset prices, piracy and insurance are challenges, but they’re cyclical.”

On a positive note, HE Sheikh Al Khalifa says he sees growth in the Ultra Large Vessels sector.

“Super vessels are being ordered to take advantage of the economies of scale. Everyone is ordering vessels above 10,000 TEU; there’s no lay up in this sector. This is a reflection of the optimism in the industry that we will see another upturn soon – but maybe not in 2013,” he said.

Key to survival, HE Sheikh Al Khalifa suggests, is diversification and risk management.

“We must change and evolve as the business environment changes around us. We must take calculated risks to protect ourselves; we must have the bravery to expand and diversify. Diversification should be a natural evolution; but should also provide benefits to the core business stream. ASRY is subject to the same downturns faced by the shipping industry, but since we have diversified, our new oil and gas division is now earning as much revenue as our core business,” he added.

Chris Hayman, Chairman of Seatrade, remarked to the audience that there is a definite move towards ultra large vessels.

Hayman said: “While the recently commissioned Marco Polo, at 16,000 TEU is the largest vessel in the world, next year, Maersk will surpass this with its 18,000 TEU capacity vessel. Maersk’s business also underlines the shifting global economic focus, after it has seen a 15% increase in business from emerging markets.”

HE Jamal Majid Bin Thaniah, Vice Chairman, DP World & Group CEO, Port & Free Zone World, Dubai, said he sees a “new wave of globalisation” and a totally different world since 2008.

“After a sustained period of growth of around 12-15% per annum – a boom rate until 2008 – we are now seeing growth rates in the industry of 2-3%, which will continue for two reasons – low tariffs and global trade barriers,” he said.

HE Bin Thaniah said: “Since the 1980s, the world has moved from nations and protectionism, to global regions, such as Europe, which are shrinking into themselves. There is also a shift in the centre of gravity – we are seeing a shift in economic power from west to east.”

He said the industry needs to “move away from the regionalised global system and work together to remove the global trade barriers.”

Held under the patronage of HH Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, the three-day exhibition and conference will run until 29 November, and is the largest event in the regional calendar, with more than 7,000 participants from 70 countries expected to attend.

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Seatrade, November 28, 2012