Billionaire Wilbur Ross, who has profited from investments in distressed industries such as steel and textiles, is putting money into ocean transportation but isn’t ready yet to plunge into container shipping, the Journal of Commerce reported.
Ross told the Marine Money conference in New York that he’s attracted to shipping because it’s an essential business that’s going through a rough patch.
“Our general strategy is to invest in fundamentally important industries that are distressed by time-denominated factors,” he said. “In the case of shipping, these factors are the excess building and the weak present economic conditions. But eventually excess tonnage will be absorbed and eventually the world economy will strengthen.”
Ross’s W.L. Ross & Co. paid $62.5 million this week for a 19.4 percent share of liquefied petroleum gas carrier Navigator Gas. In August he invested in Diamond S Shipping, which owns a fleet of product tankers.
He said he’s still trying to understand shipping, which he described as an industry that’s extremely fragmented, capital-intensive, highly leveraged and cyclical.
“Shipping is the most volatile industry we have ever seen,” he said. “We used to think that the prices of cotton, coal and steel bounced around a lot, but their fluctuations are mild compared with shipping rates.” Ross said he’s limiting the scope of his shipping investments to liquid cargoes but that opportunities could eventually arise in other sectors.
“We are only now beginning to get our sea legs but we expect eventually to get aboard other types of vessels as well…We are most likely to focus initially on the haulage of liquids but at some time in the future might go into bulk or container carriers as well,” he said.
Ross later told reporters he has no immediate plans for investment in container shipping. “We have our arms full just doing what we are trying to do,” he said. “We are not going to be one inch deep and 1,000 miles wide.”
Ross told the Marine Money conference in New York that he’s attracted to shipping because it’s an essential business that’s going through a rough patch.
“Our general strategy is to invest in fundamentally important industries that are distressed by time-denominated factors,” he said. “In the case of shipping, these factors are the excess building and the weak present economic conditions. But eventually excess tonnage will be absorbed and eventually the world economy will strengthen.”
Ross’s W.L. Ross & Co. paid $62.5 million this week for a 19.4 percent share of liquefied petroleum gas carrier Navigator Gas. In August he invested in Diamond S Shipping, which owns a fleet of product tankers.
He said he’s still trying to understand shipping, which he described as an industry that’s extremely fragmented, capital-intensive, highly leveraged and cyclical.
“Shipping is the most volatile industry we have ever seen,” he said. “We used to think that the prices of cotton, coal and steel bounced around a lot, but their fluctuations are mild compared with shipping rates.” Ross said he’s limiting the scope of his shipping investments to liquid cargoes but that opportunities could eventually arise in other sectors.
“We are only now beginning to get our sea legs but we expect eventually to get aboard other types of vessels as well…We are most likely to focus initially on the haulage of liquids but at some time in the future might go into bulk or container carriers as well,” he said.
Ross later told reporters he has no immediate plans for investment in container shipping. “We have our arms full just doing what we are trying to do,” he said. “We are not going to be one inch deep and 1,000 miles wide.”