UASC to boost business with new vessels worth $ 2 b
Monday, 23 September 2013 00:35
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Khaleej Times: United Arab Shipping Company, or UASC, aims to improve its competitiveness in the key trade lane between Asia and Europe by deploying the 18,000 TEU vessels during next two to three years, its top official said.
The leading Middle East shipping company, which placed over $2 billion order to Hyundai Heavy Industries Company to build 10 container ships, is confident to gain more cargo business in key markets.
“With this new order, UASC aims to improve its competitiveness in the key trade lane between Asia and Europe where we plan to deploy the 18,000 TEU vessels. Furthermore, we believe UASC will also improve its position in its other key trades through the deployment of the 13,500 and 14,000 TEU vessels,” Jorn Hinge, UASC president and chief executive officer, said in a statement to Khaleej Times.
Under the deal, UASC will buy five cargo ships able to carry 18,000 twenty-foot container units, or TEU, being considered among the largest container vessels in the industry. The remaining five ships will be smaller having capacity of 14,000 TEU each.
The smaller vessels are scheduled to deliver from late-2014 while the 18,000-TEU cargo ships delivery will start from first half of 2015. The $2 billion order includes options for one additional 18,000-TEU vessel and six additional 14,000-TEU ships.
“In an environment where fuel oil remains the largest cost driver in the industry, our cutting-edge vessel designs have been developed with a clear focus on improving cost efficiency and enhancing environmental friendliness. These vessels will also be the first large container vessels that will be ‘LNG-ready’ at delivery,” Hinge said.
UASC was set up by the governments of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE in 1976 to improve sea trade links with rest of the world. Currently, it deploys a total of 53 container vessels on its services worldwide. Out of the 53 vessels deployed, 27 are owned by the company while the remaining 26 are chartered-in.
O. H. Kim, president and chief operating officer of Hyundai Heavy Industries, said: “Four decades of relationship witness container ship size of UASC at Hyundai grow 16-fold, in other words from 1,100 TEU to 18,000 TEU.”
According to the industry players, the 14,000- and 18,000-TEU newbuildings are slated to be among the most fuel-efficient and ‘green’ vessels ever built. With the deployment of these vessels in the next two to three years, UASC will leapfrog from being the owner and operator of the largest container ships among all owners and operators in the region to being the owner and operator of the single largest container ships in the world.
UASC is a major container shipping player in the Middle East region and surrounding markets, covering over 200 ports and destinations worldwide. In addition to ocean shipping, the company also offers valued-added services such as warehousing, trucking, inland logistics, and ship and container repair. It operates one of the youngest vessel fleet in the entire container shipping industry worldwide with an average age of its vessel stands at five years.
“With our previous investment in nine 13,500-TEU vessels, we have successfully established UASC’s fleet as one of the youngest and most environmentally friendly in the world. [This] order builds on that foundation and takes UASC’s future fleet to the next level,” UASC board director Shaikh Ali bin Jassim Al Thani said.
UASC volumes have grown at a compound annual growth rate of 10.5% between 2007 and 2012. In the same period, revenues from fleet operations grew by 12.5%, driven primarily by the company’s business activity in the Middle East, GCC and the subcontinent markets.
“Our shareholders’ unwavering commitment and strong support from commercial lenders and export credit agencies [ECAs], including Export-Import Bank of Korea and Korea Trade Insurance Corporation, has been key to sustaining UASC’s credit strength,” said UASC chief financial officer Basil Al Zaid.
“I would also like to highlight the importance of the Middle East regional banks, which have demonstrated their commitment and worked alongside the international banks and ECAs to close this transaction in record time.”
