Lila Global has called a temporary halt to its ambitious plan to expand its fleet to 70 ships.
Steve Kunzer, chief executive of the Dubai-based shipowning affiliate of cash buyer GMS, told TradeWinds that the company is taking a breather due to high vessel values in the strong bulker and tanker markets.
“Pricing has been such that it’s not been the right time to buy. Sometimes the hardest thing to do in shipping is to not buy and just to sit in your money and wait for price to come down,” Kunzer said.
“No one has ever made money in shipping by buying expensive ships. You’ve got to buy at the right price at the right point of cycle,” he added on the sidelines of the Capital Link Singapore Forum, which was held during the Asian city-state’s annual Singapore Maritime Week.
The Lila Global fleet consists of 36 bulkers covering the size spectrums, three stainless steel chemical tankers and two feedermax container ships.
The company prefers mid-age vessels — its fleet has an average age of 16 years according to VesselsValue data — and it invests heavily in upgrading them in terms of energy-efficient technologies.
Lila Global began as a small sideline business of GMS. However, within two years it grew into a large, diversified shipping company under the leadership of GMS founder Anil Sharma and other GMS executives.
Kunzer was recruited to lead the company in January last year. He was tasked with professionalising it and repositioning it as a standalone entity with its own executive management team.
Although Lila Global has held off buying tonnage since it acquired several capesize bulkers towards the end of last year, Kunzer said it has shifted its focus on further improving its vessels and growing the management team.
“We’ve got a new chief financial officer, a new legal head, a new head of human resources and we have a new head of tanker chartering starting next month. In short, we now have the right people in place to take the business forward,” he said.
Lila Global’s bulkers are deployed on spot and period charters. Kunzer said current fixtures are heavily skewed toward spot as the company takes advantage of the strong market.
Its chemical tankers trade in the GSB J19 pool.
Kunzer does not rule out buying more tonnage if good opportunities arise.
“We’re a value investor. We buy when we see value. We are primed and ready to go if we see something at the right price,” he said.
