Osprey Maritime expands shipping services in Asia<\/p>\n
By Benget Simbolon<\/p>\n
KWANGJU, South Korea (JP): Shipping company Osprey Maritime,
\nthe oil and gas shipping unit of the Bimantara Group, has
\nprocured four new tankers to strengthen its fleet to 23 carriers,
\nin a bid to benefit from the rapid growth of Asian oil and gas
\ndemand.<\/p>\n
Speaking to reporters after the naming of two of the four new
\ntankers, built by Halla Shipbuilding Co., here over the weekend,
\nOsprey's chairman and chief executive officer Tim Cottew said
\nthat the other two tankers would be delivered in June next year.<\/p>\n
Osprey is a public company listed on the main board of the
\nSingapore Stock Exchange with activities in owning, chartering
\nand operating oil and gas tankers.<\/p>\n
Established in 1990 in Singapore, Osprey is 11 percent owned
\nby PT Samudra Petrindo Asia, the shipping subsidiary of the
\nBimantara Group, 49 percent by individual investors from the
\nBimantara Group, including its chairman Bambang Trihatmodjo --
\nthe second son of President Soeharto -- and the rest owned by the
\ninvesting public.<\/p>\n
The two new tankers, Osprey Altair and Osprey Lyra, cost a
\ntotal of US$31 million. They each weigh 46,000 dead weight tons.<\/p>\n
According to Cottew, some 70 percent of the total cost was
\nfinanced by loans from Christiana Bank of Norway and Indosuez
\nBank of France and 30 percent by Osprey's own equity.<\/p>\n
The other two tankers, will be the same the same size and the
\nsame price. They are being built by Halla Shipbuilding at its
\nSamho Shipyard near here.<\/p>\n
Cottew pointed out that the Osprey Altair will soon be
\noperated on a five year charter to the Sabic Marketing (Saudi
\nArabian Basic Industry Corporation) to transport oil and chemical
\nproducts from the Middle East to Japan and South Korea, while the
\nOsprey Lyra will go into service a few months later as it still
\nneeds further modifications.<\/p>\n
\"These new tankers will increase our revenue,\" he told
\nreporters at the naming ceremony, which was attended by Peter F.
\nGontha, a director of the widely diversified Bimantara Citra and
\nvice president of the chemical company Chandra Asri.<\/p>\n
Cottew, who is also the chief executive officer of PT Samudra
\nPetrindo Asia, noted that a large portion of his company's
\nrevenues had been derived from its activities in Indonesia,
\nmostly in transporting oil and gas for the state-owned oil and
\ngas company Pertamina.<\/p>\n
\"Last year, some 78.4 percent of our revenues was generated by
\nthe Indonesian market,\" he said.<\/p>\n
Indonesia is the world's largest exporter of LNG (Liquefied
\nNatural Gas) and the largest oil producer in the ASEAN region.<\/p>\n
\"Our strong connections with the Indonesian oil and gas
\nindustry, built over many years, are the backbone of our group.
\nI am committed to developing and expanding our business in the
\ndynamic country,\" he said.<\/p>\n
But he stressed that his company is also committed to
\ninternationalizing its business. \"Last year, we expanded the
\nIndonesian-derived revenue by 7.6 percent, while the contribution
\nfrom non-Indonesian based revenue grew by over 70 percent,\" he
\nsaid.<\/p>\n
Cottew expressed his optimism about the growth of shipping
\nservices in Asia. \"It is anticipated that Asian oil demand growth
\nwill account for nearly two-thirds of the expected volume
\nincrease in the world oil market until the year 2005,\" he said.<\/p>\n
The shipping company saw its operating profit rise by 10
\npercent from $22.5 million in 1994 to $24.9 million in 1995,
\nwhile its net profit increased by 120 percent to $15.5 million in
\n1995 from $7.0 million in 1994.<\/p>\n
The 10 percent increase in operating profit reflected the
\nfull-year effect of the three tankers the company acquired in
\n1994: Ibnu, Osprey Sky and Osprey Challenger.<\/p>\n
Disincentives<\/p>\n
Asked why Osprey's is based in Singapore and not in Jakarta,
\nCottew noted that having Indonesia as a base for a shipping
\ncompany like Osprey is not attractive.<\/p>\n
\"The situation after last year's deregulatory package is
\nimproving but there are still a number of disincentives,\" he
\nsaid, adding that when Osprey was set up in Singapore in 1990,
\nIndonesia still imposed a 10 percent VAT (Value Added Tax) levy
\non ships.<\/p>\n
Indonesia, he said, cannot provide cheap funds for
\ninvestments and has no legal certainty in terms of the shipping
\nbusiness.<\/p>\n
\"You know, the lending rate in Indonesia is above 20 percent.
\nIn Singapore we can get cheap funds with rates ranging from 7
\npercent to 8 percent,\" he noted.<\/p>\n
Cottew explained that banks do not trust the ship mortgage
\nsystem in the country. \"We found from our experience in arranging
\nfinancing deals that banks, particularly the foreign ones, have
\nno trust in the ship mortgage system in Indonesia.\"<\/p>\n
According to him, there is no guarantee for bankers that they
\ncan confiscate the ships they fund if the shipping investors in
\nIndonesia fail to pay their debts.<\/p>\n
He also said, without elaborating, that in Singapore his
\ncompany can get tax incentives.<\/p>",
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