Andrew Birov, Marketing General Manager of SILPORT: Confrontation with Russia has cost us millions of tons of cargo a year
Top Russian officials have repeatedly voiced the need for the development of Russian ports of the North-West in a bid to redirect freight traffic from the ports of the Baltic countries. At the same time, the Estonian SILPORT, Sillamae, is a joint Russo-Estonian company, which showed in 2009 as much as 1.5 times growth in cargo volumes over 2008. Andrew Birov, marketing director of SILPORT JSC told in his interview with PortNews IAA about the company’s portfolio of assets, the 2009’s outcome and the port’s prospects.
- Please tell us about the port’s portfolio of assets, operating terminals in its territory?
- Port Sillamae, or SILPORT, is a 100% private Estonian-Russian joint venture. All 650-hectar territory of the port is privately owned. 50% shares in the company owned by the Port Silmet Group (Estonia) and 50% of Russian entrepreneurs.
There is Silmet, a unique plant for processing rare metals in the port, 51% of which is owned by a Russian Silvinit company.
Actually SILPORT is a unique example of the Estonia-Russia trade and economic cooperation within the framework of EU-Russia strategic partnership. As of now, 4 stevedoring company are registered and operate at the port.
The SILPORT’s portfolio of assets includes several handling terminals, warehousing area and a passenger terminal. Alexela Sillamäe, owned by Dutch company Trafigura, specializes in handling of light and dark petroleum products. The tank farm of terminal is 300.000 cubic meters of capacity of 10 million tons a year. Alexela Sillamäe has ISO 9001 and ISO 14001 certificates.
Another terminal - Tankchem / EuroChem (owned by Russia’s Evrokhim company), for handling liquid chemical and petrochemical products with a tank farm of total capacity of 55.500 cubic meters for handling up to 1 million tons a year.
There is also Baltic Chemical Terminal (BCT) operating at the port for handling liquid fertilizers and ammonia - with a tank farm of total capacity of 120.000 tons capable of handling 1.7 million tons a year. The owner of the terminal – Akron, a Russian company.
And, finally, the terminal complex Silsteve (equally owned by Silmet, Estonia -50% and by two Russian investors from St. Petersburg holding another 50% stake) to transship general, Ro Ro cargoes of capacity of up to 1.5 million tons a year. There are a 90-hectares parking area for the simultaneous accommodation of up to 45.000 cars and a Silsteve passenger terminal.
Container terminal, currently being developed, has a 850-m moorage wall, berths depth of 14.5 m. The terminal facilities include railroad and autoloader equipment 5 cranes - 3 container reachstackers and 2 universal port cranes. All the terminal facilities spread on the 40-hectare area.
Noteworthy, SILPORT is the closest to Russia EU’s deep-water port, located just 25 kilometers from the border of Russia and the EU. Besides, this is the year-round navigable port. Its berths depth, reaching 16.5 meters, allows taking any large ship that can transit the Baltic Sea via the Danish Straits.
SILPORT was granted an ISPS international safety certificate and is a free zone of the first category (VAT, customs duties and excise taxes are 0%).
- What are the port’s statistics for 2009 - total volume of transshipment, structure of commodities, number of ship calls, investments?
- In 2007 and 2008 – we had some 1.7 million tons of cargoes, in 2009 – 2.5 million tons, as much as 1.5 times growth. Of overall volumes the major categories were petroleum products shipped via Alexela Sillamäe terminal and liquid ammonia and carbamide-ammonia mixture transported from a plant in Novgorod the Great. Then, the third main commodity category, general cargoes and automobiles (in recent 1.5 years Silsteve transshipped about 100.000 brand new cars from Japan, South Korea, Germany and the U.S. markets to Russia and the CIS). And, finally, in fourth place all sorts of liquid chemicals.
Last year we registered about 300 ship calls at our port.
As for investments in the port, there were 5 cranes purchased, including two universal port cranes (of lifting capacity of 40 tons of cargo or 40-foot containers) and three reachstackers. Of this equipment, only one universal port crane was installed, which has been operating from November last year. We prepared a 90-h area for warehousing of automobiles. There is a container terminal under construction. Its completion is scheduled for late 2011. Construction of two 30.000-ton reservoirs completed for liquid ammonia co (last fall, the first ammonia-laden vessel exported the cargo in December 2009 to the U.S.).
- Did the global financial crisis trouble somehow the port activity?
Sure it did, but a lot less than the risen tension in Estonia - Russia relations in April 2007 (a conflict over a Soldier Monument). We had to, freeze part of our investment projects, because of the crisis, including container terminal, which was projected to be operational by early 2010, now postponed to the end of 2011. The confrontation with Russia has led to slump in volumes of freight traffic, million tons of cargo a year. The growth rate of in the first quarter of 2007 (before the conflict unleashed) showed we might have reached 3.4 million tons, or all 5 million tons of cargo without the tension. Plus, those investments that we expected, but in vain.
The saddest example for us is the Nord Stream project. The contract was ready to be signed in May 2007, now all that had slipped to the port of Kotka. The reason here - the Estonian government's refusal to permit exploration and the gas pipeline construction in the economic waters of Estonia. We have lost hundreds of millions of euros and at least 300 jobs in Sillamae.
- What is your forecast on cargo turnover for 2010?
- Despite all the economic and political troubles, we want to increase freight traffic by 25%.But this will depend primarily on the improvement of Estonian-Russian political and trade-economic relations in general.
- Do you expect a decline in trans-shipment through the port with the development of the port of Ust-Luga in Russia?
- Ust-Luga is as well our rival as our partners. For example, in handling of new automobiles. We see a prospect of Kotka Sillamae-Ust-Luga ferry line in both directions simultaneously (two ferries at a time). We are always ready to help in case Ust-Luga gets frozen, as it happens this winter. There is practically no ice here, and we did not used ice-breakers. Actually, competition has a very positive impact on the quality of logistics and port services, and what is most important - the price for the shippers.
- What is the dynamics of oil cargo shipment via the port in 2009 as compared with 2008?
- Growth in exactly half as much, it's mainly heavy fuel oil and VGO.
- What companies provide bunkering services at your port?
- As we do not have special bunkering vessels here we can charge vessels from auto.
- What are the most important investment projects expected in 2010?
- We will continue construction of the container terminal, always looking forward to any Russian investors. The conditions we offer are the most profitable and no bureaucracy in the private port. All building permits are issued very quickly and without delay. So welcome to SILPORT!
Interviewed by Vitaly Chernov.
- Please tell us about the port’s portfolio of assets, operating terminals in its territory?
- Port Sillamae, or SILPORT, is a 100% private Estonian-Russian joint venture. All 650-hectar territory of the port is privately owned. 50% shares in the company owned by the Port Silmet Group (Estonia) and 50% of Russian entrepreneurs.
There is Silmet, a unique plant for processing rare metals in the port, 51% of which is owned by a Russian Silvinit company.
Actually SILPORT is a unique example of the Estonia-Russia trade and economic cooperation within the framework of EU-Russia strategic partnership. As of now, 4 stevedoring company are registered and operate at the port.
The SILPORT’s portfolio of assets includes several handling terminals, warehousing area and a passenger terminal. Alexela Sillamäe, owned by Dutch company Trafigura, specializes in handling of light and dark petroleum products. The tank farm of terminal is 300.000 cubic meters of capacity of 10 million tons a year. Alexela Sillamäe has ISO 9001 and ISO 14001 certificates.
Another terminal - Tankchem / EuroChem (owned by Russia’s Evrokhim company), for handling liquid chemical and petrochemical products with a tank farm of total capacity of 55.500 cubic meters for handling up to 1 million tons a year.
There is also Baltic Chemical Terminal (BCT) operating at the port for handling liquid fertilizers and ammonia - with a tank farm of total capacity of 120.000 tons capable of handling 1.7 million tons a year. The owner of the terminal – Akron, a Russian company.
And, finally, the terminal complex Silsteve (equally owned by Silmet, Estonia -50% and by two Russian investors from St. Petersburg holding another 50% stake) to transship general, Ro Ro cargoes of capacity of up to 1.5 million tons a year. There are a 90-hectares parking area for the simultaneous accommodation of up to 45.000 cars and a Silsteve passenger terminal.
Container terminal, currently being developed, has a 850-m moorage wall, berths depth of 14.5 m. The terminal facilities include railroad and autoloader equipment 5 cranes - 3 container reachstackers and 2 universal port cranes. All the terminal facilities spread on the 40-hectare area.
Noteworthy, SILPORT is the closest to Russia EU’s deep-water port, located just 25 kilometers from the border of Russia and the EU. Besides, this is the year-round navigable port. Its berths depth, reaching 16.5 meters, allows taking any large ship that can transit the Baltic Sea via the Danish Straits.
SILPORT was granted an ISPS international safety certificate and is a free zone of the first category (VAT, customs duties and excise taxes are 0%).
- What are the port’s statistics for 2009 - total volume of transshipment, structure of commodities, number of ship calls, investments?
- In 2007 and 2008 – we had some 1.7 million tons of cargoes, in 2009 – 2.5 million tons, as much as 1.5 times growth. Of overall volumes the major categories were petroleum products shipped via Alexela Sillamäe terminal and liquid ammonia and carbamide-ammonia mixture transported from a plant in Novgorod the Great. Then, the third main commodity category, general cargoes and automobiles (in recent 1.5 years Silsteve transshipped about 100.000 brand new cars from Japan, South Korea, Germany and the U.S. markets to Russia and the CIS). And, finally, in fourth place all sorts of liquid chemicals.
Last year we registered about 300 ship calls at our port.
As for investments in the port, there were 5 cranes purchased, including two universal port cranes (of lifting capacity of 40 tons of cargo or 40-foot containers) and three reachstackers. Of this equipment, only one universal port crane was installed, which has been operating from November last year. We prepared a 90-h area for warehousing of automobiles. There is a container terminal under construction. Its completion is scheduled for late 2011. Construction of two 30.000-ton reservoirs completed for liquid ammonia co (last fall, the first ammonia-laden vessel exported the cargo in December 2009 to the U.S.).
- Did the global financial crisis trouble somehow the port activity?
Sure it did, but a lot less than the risen tension in Estonia - Russia relations in April 2007 (a conflict over a Soldier Monument). We had to, freeze part of our investment projects, because of the crisis, including container terminal, which was projected to be operational by early 2010, now postponed to the end of 2011. The confrontation with Russia has led to slump in volumes of freight traffic, million tons of cargo a year. The growth rate of in the first quarter of 2007 (before the conflict unleashed) showed we might have reached 3.4 million tons, or all 5 million tons of cargo without the tension. Plus, those investments that we expected, but in vain.
The saddest example for us is the Nord Stream project. The contract was ready to be signed in May 2007, now all that had slipped to the port of Kotka. The reason here - the Estonian government's refusal to permit exploration and the gas pipeline construction in the economic waters of Estonia. We have lost hundreds of millions of euros and at least 300 jobs in Sillamae.
- What is your forecast on cargo turnover for 2010?
- Despite all the economic and political troubles, we want to increase freight traffic by 25%.But this will depend primarily on the improvement of Estonian-Russian political and trade-economic relations in general.
- Do you expect a decline in trans-shipment through the port with the development of the port of Ust-Luga in Russia?
- Ust-Luga is as well our rival as our partners. For example, in handling of new automobiles. We see a prospect of Kotka Sillamae-Ust-Luga ferry line in both directions simultaneously (two ferries at a time). We are always ready to help in case Ust-Luga gets frozen, as it happens this winter. There is practically no ice here, and we did not used ice-breakers. Actually, competition has a very positive impact on the quality of logistics and port services, and what is most important - the price for the shippers.
- What is the dynamics of oil cargo shipment via the port in 2009 as compared with 2008?
- Growth in exactly half as much, it's mainly heavy fuel oil and VGO.
- What companies provide bunkering services at your port?
- As we do not have special bunkering vessels here we can charge vessels from auto.
- What are the most important investment projects expected in 2010?
- We will continue construction of the container terminal, always looking forward to any Russian investors. The conditions we offer are the most profitable and no bureaucracy in the private port. All building permits are issued very quickly and without delay. So welcome to SILPORT!
Interviewed by Vitaly Chernov.