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Cargill says move to order bulker ships an asset play
Cargill Inc’s move to order bulker ships is taking advantage of low vessel values and the U.S. agribusiness company has no plans to become a long-term ship owner, the group’s shipping chief said.
The dry bulk shipping market is in a fifth year of one of its worst downturns on record after shipping firms ordered large numbers of new vessels between 2007 and 2009 - just in time for the collapse of the global economy after the 2008 financial crisis.
Overcapcity has sent vessel values for large “capesize” ships to record lows.
Cargill, one of the world’s largest privately held corporations, recently said it had formed a joint venture with another company to purchase capesize ships from a shipyard in China. The Minneapolis-based group last owned ships in 2003.
“Cargill traditionally is not a shipowner - that is not the way we intend to go,” said Cargill’s head of ocean transportation Roger Janson. “We have ordered some vessels because the asset price is good,” he told a Lloyd’s List shipping summit in London.
The value of a five-year old capesize ship has slumped to just over $30 million from more than $150 million at the height of the boom.
Janson said Cargill planned to run the vessels with its joint venture partner until the market picks up and would then look to sell them.
“The idea is not to run them for the next 20 years. We do not want to be a long-term ship owner. It’s an opportunistic play,” he said.
Janson said Cargill could look at other ship orders but that would depend on the opportunities on offer. (Reuters)
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