to double fleet to 10 ships
Aitken Spence Shipping Limited, the shipping arm of the blue chip
Aitken Spence conglomerate, has spent about $27 million on acquiring
five second hand cargo vessels and plans to double its fleet to
10 in the next two years.
“We’re building up our fleet and have just bought two
more cargo ships,” Aitken Spence Shipping chairman and chief
executive officer Parakrama Dissanayake said. “We plan to
own up to 10 vessels in the next two years.”
The expanding fleet of cargo ships is making a growing contribution
to Aitken Spence group profits.
group's Cargo Logistics sector, under which shipping comes, recorded
a 17 percent increase in revenue and a 15 percent increase in profits
from operations in the financial year ended March 31, 2005. Total
group revenue grew 10 percent to Rs 10 billion but net profit attributable
to share holders fell 12 percent to Rs 1.1 billion as the tsunami
hit tourism earnings.
Spence operates its ships through its joint venture with Ceyline
Holdings, a group of companies with interests in different shipping
activities such as ship agency, crewing, bunkers and freight forwarding.
Soaring charter and freight rates have made investing in ships an
attractive proposition to conglomerates like Aitken Spence, which
is now the island’s largest container ship operator.
group, through its Aitken Spence Hotel Holdings subsidiary, is also
the largest hotel company in Sri Lanka. Dissanayake said Aitken
Spence will acquire not only container ships but even break bulk
conventional cargo vessels.
Spence Shipping has given all its vessels on time charter.
The Safmarine Boma, with a capacity of 600 TEU (Twenty-foot Equivalent
Units or containers), the group’s fourth vessel, is on time
charter to Safmarine, part of the Maersk shipping giant which is
trying to take over P&O Nedlloyd.
vessels do not call Colombo and instead are deployed in cross trades
with Safmarine Boma plying between West Africa and Europe and others
on the Korea-China sector and shipping cargo between the Indian
subcontinent and the Red Sea.
not operating the ships but buying vessels purely for asset management,”
Dissanayake said. “The fact that we have a vessel on time
charter to the Maersk group shows they have accepted the management
skills of Aitken Spence and Ceyline.”
Spence’s first ship was the 1,300 TEU Indonesian Star. This
was followed by the acquisition of the 10,000 DWT multi-purpose
vessel Sea Pioneer, and another ship with a capacity of 550 TEU.
The latest vessel to be acquired is the Echo Dani with a capacity
of 558 TEUs.
Dissanayake said demand for ships remain strong and prices are increasing.
The company had got offers for one of its newly acquired vessels
that are much higher than the price it paid. The Aitken Spence group
is also eyeing investments in port terminal operations as part of
an ambitious expansion both locally and globally.
Spence managing director Rajan Britto recently told company shareholders
that it is interested in expanding the scale of its activity to
include port operations.
group is interested in participating in the development of the Colombo
South Harbour when expressions of interest are called for, he said.
The Harry Jayawardena controlled company was earlier known to be
interested in acquiring the Jaya Container Terminal of Colombo port
when the government was considering privatizing or ‘corporatising’