Clarksons Shipping negotiates with 2 companies to establish ship fuel supply worth $200m

We are studying establishment of navigation company with government to build modern fleet with Egyptian flag, says Metawi

Mohamed Metawi, managing director of Clarksons Shipping Agency, said that the company is negotiating with two international companies, in the field of ship fuel supply, in order to establish a station for ships' fuel supply in Egypt with investments of $200m and in cooperation with a government agency.
In an interview with Daily News Egypt, Metawi said that the company is also considering the establishment of a navigation company in cooperation with the government to build an Egyptian naval fleet.
What are the features of your investment plan in the coming period?
Clarksons is a global company based in England and listed on the London Stock Exchange. We have 49 offices in 21 countries with over 2,500 employees worldwide. We began our services in Egypt with three employees in 2010, and now we have over 140 employees.
We provide naval and logistics service to ship owners dealing near the Egyptian maritime borders or at Egyptian ports.
We believe that the state aims to inject new investments in ports and the Suez Canal Economic Zone (SCZone), which will help boost traffic. We are, hence, working to put a plan to match that of the state.
We have recently opened a number of new departments at the company to keep pace with the investment opportunities available in the market now, which will appear soon, thanks to the state's measures in the development of ports and infrastructure for the logistics services.
We also added a sector for vessels leasing, and another for navigation agency at ports. Moreover, we opened a new sector in the Suez Canal and a department for agency of the shipping lines, in cooperation with the international Maersk, and another department for oil and gas.
In the long term, we are considering the establishment of a navigation company with a government agency to own an Egyptian naval fleet. This is almost non-existing in Egypt, but one government company and a few private ventures with very small vessels.
What will the oil and gas department do?
Egypt is now witnessing a rapid growth in the oil and gas sector. The state has been offering tenders for international companies to excavate for oil, especially after the demarcation of the maritime borders in the Red Sea and the Mediterranean. This makes the sector very likely to grow and offer investment opportunities, which is why we are waiting for them.
The oil and gas department will offer transmission services as well as logistics and naval services for the companies with concession rights in Egypt, including services in the Suez Canal, Egyptian ports, or any other type of services within the Egyptian maritime borders.
We rely on the weight of company in participating in tenders to win contracts to offer these services to the companies or through direct contracts with the companies that have concession rights for exploration. We, however, do not have signed contracts in this regard so far.
In addition, we are working to inject investments in the field of fuel supply to vessels. This is not very common in Egypt. The available quantities are not enough, despite passage of 18,000 ships through Egypt every year. Hence, the ships often seek the services before or after transiting Egypt.
Did you take serious steps in this field?
We are currently negotiating with two of the largest companies in this field to establish an Egyptian company that provides fuel supply services to ships in cooperation with an Egyptian governmental company or agency.
The investments of the projects are projected at $200m. We aim to reach an agreement with one of the companies in 2018. The station will be built in the SCZone.
What are your efforts in promoting the Suez Canal?
Clarkson Middle East, which is based in Dubai, has contracted with the Suez Canal Authority to become a promoter for it. We are working hard to boost the traffic transiting the canal.
About 18,000 ships transit the channel per year, which accounts for 12% of global trade, making the canal the most important maritime passage in the world.
The number of ships in the Suez Canal is expected to increase in the coming period, as global trade regains its pace, after the sharp fall in 2017.
We address the shipping lines and the vessels that pass through the Suez Canal, but stopped using it and pass through the Cape of Good Hope to learn about the reasons why they stopped using the channel and solve their problems.
And in coordination with the Suez Canal Authority, we offer these lines discounts on transit fees of up to 75%.
Using an electronic system, we know the routes taken by the ships away from the canal in the past two years. This way, we specify the targeted ships to begin addressing them to use the Suez Canal again.
We started this service in 2016. During the first year we changed the routes of 250 vessels to transit through the canal. We aim to increase the number of ships to 500 in 2018.
What is the size of your business in Egypt in 2017?
Through our various services, we contributed to shipping 5m tonnes of goods and offered naval and navigation services to 320 vessels.
There were restrictions on imports recently. Did that impact your services?
The flotation of the pound and the other measures taken in the same period fall in the best interest of the Egyptian economy. Despite the decline in import flow, exports increased, which balanced trade.
However, imports remained higher than exports. Yet, I expect that the coming period will see the sector increasing again, supported by the geographical location of Egypt, which nominates it to become a main global trade passage, especially as roads and infrastructure develop, as well as the growing number of gas and oil exploration.
There was trend to use huge vessels to transfer goods. Are Egyptian ports ready to serve the ships that big?
The drafts at Egyptian ports are very well suited to the type of goods handled at Egyptian ports. For instance, the grains vessels have a capacity of 5,000-70,000 tonnes. The current drafts are very good for that load. In addition, grains are one of the most imported goods.
Yet, the challenge that will face Egyptian ports in the coming period is the unsuitable drafts for iron ore and coal shipping, which is expected to increase in the coming period, after the investments pumped into the sector by the steel companies.
Furthermore, the reliance on coal to generate electricity will increase demand on coal, which will require ports to deepen the draft to suit the bigger vessels.
These goods usually are shipped on vessels with a draft of 18-19 metres. Dekhila port has a dock for huge container ships with loads up to 170,000 tonnes. There is another dock in Ain Sokhna port that can accommodate ships with loads up to 135,000 tonnes. But the increase in goods quantities will require more depth.
What is your targeted growth rate?
We plan to increase the business size by 100%. We plan to provide naval and agency service to 700-800 ships in 2018.