Financial Times

Tokyo Cement mulls buying third ship
Tokyo Cement Company, the joint venture between Japan's Mitsui Mining Company and St. Anthony's Consolidated Ltd. which just spent Rs 1.1 billion on its second ship, a bulk carrier, is looking to buy a third.

S.R. Gnanam, Managing Director, Tokyo Cement Company said the vessels are required to ship the raw material and bulk cement for its milling and bagging plants in Trincomalee and Colombo ports. He said the group was buying second-hand vessels as hiring ships had become expensive with charter and freight rates having risen to new highs. Over the past year charter rates had risen to $20,000 a day from about $4,000.

"We're looking at buying a third ship to handle bulk shipments to Trincomalee," Gnanam told The Sunday Times FT. The company is considering a second hand vessel of 23,000 DWT size. A new vessel would cost around $30 million and is considered too expensive.

Tokyo Cement acquired its first bulk carrier a few years ago and recently took delivery of its second, M. V. Tabernacle Prince, with the capacity to carry 17,500 MT of cement. "We bought a traditional bulk carrier and sent her to China to be re-equipped," said Gnanam. "The vessel and modernization cost Rs 1.1 billion." This vessel was acquired by the subsidiary, Tokyo Cement Colombo Terminal (Private) Ltd., formerly known as Samudra Cement Company.

It underwent a complete re-fitting process at Chengxi Shipyard, China to equip it for fast discharging operations. Unloading of the full capacity of cement carried in the vessel can be completed within two days.

The 20-year old vessel has another 10-11 years of life left, Gnanam said. The ship will be used to discharge bulk cement imported from Indonesia for the bagging plant in Colombo port. The cement terminal in Colombo Port was acquired by Tokyo Cement to enable the company to meet the ever-increasing demand for cement, especially in the western province.

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