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May 31, 2001
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Money > Reuters > Report May 31, 2001 |
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Essar to build tanker logistics giantIndia's largest independent shipowner Essar Shipping said on Wednesday it would spin-off its tanker operations into a separate company, which would join with another operator in a vessel-sharing alliance. Essar Shipping's CEO Sanjay Mehta said that Essar's six Suezmax (million-barrel) tankers would be put into a subsidiary company called Energy Transportation International, which would provide end-to-end logistics services to the oil industry. Speaking at the sidelines of an Indian Shipping Conference in London, he said ETI was seeking a "strategic alliance" with another company in the million-barrel tanker sector, with the aim of assembling sufficient tonnage to take on contracts of affreightment. "We should have something to announce on that front within a month," said Mehta. Essar's million-barrel fleet currently trades between the North Sea and West Africa and the US Atlantic Coast, as well as the South-East Asian markets. "In the future we'll focus on South-East Asia: primarily the Indian and Pacific markets, and we'll also substantiate our presence in the Atlantic," said Mehta. He said that the plan was also to invest in tank storage facilities in receiving countries to help service the oil industry's needs for reliable supplies. Mehta said Essar was in the process of being restructured into four separate services: energy transport, coastal transport, ports and terminals and Web-based logistics. Asian port services was picked out as a key investment target for US investors at Tuesday's Indian Shipping Conference in London. Jeffrey Griffin, vice-president of Overseas Private Investment Corporation, said the sector had consistently provided investors with higher-than average returns over the last few years, and they were hungry for more. Essar's port and terminal business would be a wholly owned subsidiary and should be active by the end of 2001, said Mehta. The company is seeking an international partner for the coastal operations, he added.
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