Global Carriers Bhd is investing some RM250 million over the next five to seven years to replace its fleet of single-hull tankers with double-hull tankers, a move aimed at consolidating its position as a niche clean petroleum product (CPP) carrier, its chairman Datuk Azlan Hashim (pic) said.He said the fleet replacement would also facilitate its regional market expansion plans.“We are in the process of ordering two 7,000 deadweight tonnes (dwt) double-hull tankers from a Chinese shipyard, which will be funded by the sale of our two container ships for RM80 million. This will take about 12 to 18 months,” he told FinancialDaily recently.The shipping company now has six units of 7,000dwt single-hull tankers and a 12,000dwt double-hull tanker, the Budi Jasa, which is currently undergoing testing before commissioning. The new tanker would be used for both the local and regional trades.However, he said Global Carriers would not immediately divest itself of its six single-hull tankers as they could still be used to generate income.“The single-hull tankers will be phased out over the next five years.
They are still earning good money, and we will use the tankers as there is still demand for them,” he added.Double-hull tankers cost between RM37 million and RM50 million each, depending on the tonnage.The plan is to replace all the single-hull tankers with new vessels or convert them into double-hull ones, should it proved to be cost-efficient, he added.“We have to buy new; everyone wants double-hull tankers and there is none (second-hand tankers) in the market. Even if there were, the demand would push up the price, so it’s better to order new,” he added.Azlan said Global Carriers would be able to operate optimally by having 12 tankers with a total tonnage of 100,000dwt, compared with the current 42,000dwt.“We are now making profit and our cash flow is good. We expect to use about RM150 million from our cash flow and RM100 million from borrowings over the next five years to fund the purchase of the new vessels,” he said.Azlan said the company is concentrating on local charters for clients such as Petroliam Nasional Bhd (Petronas) and Shell.He said once Budi Jasa is operational, local charters would contribute 80% to its revenue and regional trades would make up the rest.“We have a strong position in Malaysia; as far as I can see, we have the largest fleet of 7,000dwt tankers. However, we don’t want to depend on a single market and we are consciously trying to diversify into more markets.
“We are looking at the markets in China, the Philippines, Indonesia and Vietnam. Shell operates in the Philippines and Petronas has operations in Vietnam,” Azlan said, adding that the company is in talks with potential customers to charter its 12,000-tonne tanker.He said its regional expansion is expected to take off in a major way when Global Carriers has acquired more ships.He said Global Carriers had no plans to venture into the regional oil transshipment market, which requires larger vessels, or liquefied natural gas (LNG) shipping, which requires a high degree of expertise and more cost. However, he said palm oil and chemical shipments remain a possibility in the future.