China Navigation Co (CNCo) will split its dry bulk shipping activities from its liner shipping and fleet management business in a move that will establish Swire Bulk as a standalone, privately held company.
The target date for the separation is January 2021, according to a statement released by CNCo on Wednesday.
Swire Bulk will continue to be headquartered in Singapore and John Swire & Sons Ltd will remain as its ultimate parent company.
CNCo described the move to establish Swire Bulk as an independent entity as being a way to “provide the business with the optimal platform to support its growth ambitions and cement its position as a provider of market leading freight solutions”.
Sam Swire, chairman of Singapore-headquartered CNCo, said that while it has been a difficult dry bulk market over the last few years, Swire Bulk had managed to build an excellent reputation in the dry bulk sector over a relatively short period of time.
“Setting up Swire Bulk as a standalone business will give it the independence required for its continued development as a high-quality global dry bulk operator," he said.
"Market leadership in terms of the safety and quality of our operation and our sustainability commitments and initiatives with our partners will remain central to Swire Bulk’s business strategy.”
CNCo added that it would be business as usual for Swire Bulk's customers, tonnage partners and all related stakeholders both before and after it becomes an independent entity.
Japanese-built bulkers to join the fleet
Swire Bulk was established in 2012, and has grown rapidly to become the largest part of CNCo’s business.
The acquisition of Hamburg Sud Tramp from Maersk Line in 2019 boosted its fleet up to around 150 vessels, predominantly in the handysize and supramax/ultramax sectors.
VesselsValue indicates that 28 of these bulkers, which have an average age of four years, are directly owned by the company.
Swire Bulk’s fleet will grow in the coming years with the addition of eight 37,000-dwt newbuildings that Japanese shipbuilder Oshima Shipbuilding will begin delivering from the fourth quarter of this year.
It is described as having firm commitments out to 2038, a diversified cargo base and a balanced vessel operating mix between owned and chartered tonnage.
“Swire Bulk has built an experienced and high-performing team with over 100 employees across nine offices around the world with a strong customer-centric culture and an excellent reputation towards innovative freight solutions and its ability to build high-valued partnerships with tonnage providers, trading houses and our core industrial client base,” Swire Bulk general manager Rob Aarvold said.
Aarvold could be in line to become Swire Bulk’s new chief executive as the Swire group has a tradition of promoting executives from within the organisation rather than parachuting in newcomers.
CNCo said details of a chief executive appointment will be announced “in due course”.
