For Concordia Maritime, the last few years have been characterised by change and, to some extent, a new focus. After the sale of the last large tankers in 2004, the company has shifted its focus from the transportation of crude oil to the transportation of refi ned petroleum products. This segment is one of the most expansive in tanker shipping and offers large opportunities.
A fundamental component of the strategy is the new product tankers, which have been ordered from Brodosplit Shipyard in Croatia. So far, ten P-MAX and two Panamax tankers have been ordered, eight of which had been delivered by the end of 2007. Based on the philosophy of the MAX concept – transport economy, flexibility, safety and environmental consideration – these vessels are in a class of their own as regards cost effectiveness and safety. Compared with a traditional product tanker of the same size, a P-MAX tanker can transport about 30 per cent more cargo. At the same time, double main engines, propellers and control systems make the vessels far safer.
Since the first P-MAX tanker, the Stena Paris, was delivered at the end of 2005, a further seven vessels have entered service – five P-MAX tankers and two Panamax tankers with a high ice class. When all the vessels ordered have been delivered at the end of 2010, Concordia Maritime will have one of the most modern tanker fleets in the
world.
Positioned for a market downturn
In recent years, the freight market has developed extremely positively. The demand for transport capacity has been high and freight rates on both the spot and the time-charter market have been at historically very high levels. However, as a result of the large-scale construction of newbuildings, the supply of vessels is expected to increase sharply in the years ahead. This will be felt most on the volatile spot market where prices are determined solely on the basis of supply and demand.
Concordia Maritime is well positioned in the event of a market downturn. Operationally, the majority of the vessels on order have been signed to charters of between five and ten years. These long-term charters give the company stability in terms of revenue, which is not affected by short-term developments in the market. In part as a result of the sale of the two V-MAX tankers in 2004, Concordia Maritime is now in a strong financial position. This creates good opportunities for taking advantage of the business opportunities that arise in a falling market.
Large potential in refined petroleum products
Although the market may weaken still further, there is considerable long-term potential in the transportation of refi ned petroleum products. As a result of increasingly tough environmental regulations and the enormous investment costs, refinery capacity is no longer being built in the Western World at the same rate at which consumption is rising. Instead, new refineries are being built in the Middle East or Asia, which means that distances from the refi neries to the end consumers are longer. At the same time, growing demands are being made on cost-effectiveness, flexibility, safety and environmental consideration. For Concordia Maritime, this translates into excellent opportunities for good business deals. The company is working continuously to identify and evaluate both general market and specifi c customer requirements. Its goal is to continue to expand, while maintaining good profi tability, together with both existing and new customers.