RIYADH, 16 August 2006 — The National Shipping Company of Saudi Arabia (NSCSA) has drawn up a five-year development strategy which calls for massive expansion plans. “The expansion plan calls for aggressive growth in the company’s main business sectors, i.e., transportation of crude oil, petrochemicals and general cargo,” NSCSA’s new president Humod Al-Ajlan told Arab News. He replaced Khalil I. Al-Gannas.
Al-Ajlan said that for the implementation of such plans, NSCSA has ordered six VLCCs (very large crude carriers) to be delivered between 2008 and 2009 in addition to the 2 VLCCs, which were already ordered and due for delivery in 2007.
“We have also ordered 10 chemical carriers, 5 of which we have already received and the remaining 5 will be due for delivery between now and 2008 for National Chemical Carrier, a subsidiary of NSCSA.
In addition, orders have also been placed for six more chemical carriers for NCC which will be delivered between 2009 and 2010. “This will make NSCSA well-entrenched as a leading shipping company not only at the regional level but also at the international level as well,” Al-Ajlan said. The new NSCSA president said that NSCSA is competing very well in the world’s biggest market.
He added, “in fact, it can be said that NSCSA, which is a listed company, is the shipping company of Saudi Arabia in the true sense of the term. There are small players, but they are nowhere near NSCSA, which is decidedly the market leader.” He further said that the strategic plan also calls for growth-oriented initiatives in operational, financial, administrative and technical areas as well.
“That means that in implementing our strategy we have to streamline all aspects of our operations. We have an excellent network in terms of reporting which benefits from the latest information technology (IT). We have all aspects of monitoring and support services well in place in our headquarters in Riyadh,” he said.
Currently, the shipping firm is trying to re-engineer its capital structure. Expansion requires additional capital and NSCSA is in the process of raising the needed amount. “We can raise the fund both through capital increase and debt-financing,” he said. NSCSA has already initiated steps to increase its capital as well as debit financing to meet its expansion needs.
NSCSA had earlier invested SR187.5 million for a 30.3 percent share in the capital of Petredec Ltd., which is a Bermuda-based international liquefied petroleum gas (LPG) trading and ship-owning company with offices in London, Singapore, Monaco and Barbados. According to Al-Ajlan, the return on investment of the NSCSA in Petredec is very positive. “We have a good relationship with Petredec. We are represented in its board of directors and executive committee. We are also a part of its strategy process,” Al-Ajlan said.
Petredec controls a substantial fleet of owned and time chartered gas vessels operating worldwide. The Petredec fleet is the largest among gas tankers, aggregating approximately 795,000 metric tons, including two VLGCs, with each having 82,000 metric ton capacity, and two units of LPGs ordered from Hyundai Heavy Industries for delivery in 2008.
