Kim Heng Offshore & Marine Holdings is on the lookout for bunker tankers as part of what chief executive Thomas Tan describes as adopting more aggressive initiatives and commercial strategies to improve revenue and growth.

Tan told TradeWinds that the company wants to expand into fuel and eventually LNG bunkering and, therefore, is keeping a close eye on lists of bunker tanker sales.

“We want to expand our value chain and keep up with changing trends in the shipping business," he said. "We have identified the bunker sector as being a good area to expand into.”

'Good 20%' profit

Kim Heng made its first move into bunker tanker ownership late last year when it acquired the 5,000-dwt Angel Sun (built 2006) at auction for SGD 2.1m ($1.5m). It planned to operate the vessel itself, delivering fuel oil to rigs and offshore vessels on station in South East Asia. But, in the end, it sold the unit as soon as it was delivered.

“Somebody came along and offered us a good 20% margin, so we sold it before we put it into service,” Tan said.

That somebody turned out to be Singapore-based Ocean Tankers, which today operates the ship as Ocean Cougar.

Eyes on more vessels

Tan indicated that Kim Heng is still keen to buy more bunker tankers as a hedge to protect its marine logistics business, which supplies on-station rigs and offshore vessels, as well as to allow it to enter the regular Singaporean bunker sector.

He does not anticipate any problems sourcing suitable vessels locally, especially since there are seven bunker tankers belonging to Brightoil and Coastal Oil under mortgage-related arrests in Singapore that are likely to come up for auction in the near future.

Kim Heng has proven adept at picking up bargain tonnage at auction, buying seven anchor handling tug supply vessels over the past three years. The ships were all relatively modern units that were acquired at a fraction of their building costs, thus allowing the company to operate them profitably in a market where daily rates have made it tough for operators that have high mortgages on similar ships ordered during the market boom.

At the same time, Kim Heng has shown itself to be equally willing to part with its bargain buys if offered sufficient money by other operators.