Polish Steamship Co (Polsteam), one of Europe’s largest bulker operators, is looking to order more newbuildings after undergoing a restructuring programme and returning to profit.
The Szczecin-based company confirms it will take delivery this year of the final four vessels in an earlier newbuilding programme that included several ships abandoned at Chinese yards by the previous board, but that were since renegotiated.
Pawel Brzezicki, who was parachuted in by the government two years ago to stabilise the state-owned company, tells TradeWinds that Polsteam now needs six or seven newbuildings every year.
State-owned Polsteam is Poland's largest shipping company
Headquarters: Szczecin, Poland
Fleet in operation: 61 ships of 2.2 million dwt
Bulkers: Eight panamaxes and 48 handysizes
Other ships: A sulphur carrier and four ferries managed by Unity Line
Chinese opportunities
At the end of next month, Brzezicki will travel to China to seek “opportunities” to build more bulkers. The company’s bulker fleet ranges from 16,600 dwt to 82,000 dwt in size, the largest proportion being handysizes up to 39,000 dwt.
Brzezicki, a former Polsteam general manager between 1998 and 2005, says about $60m in lost advance payments had been recovered in the course of renegotiating cancelled orders at China’s Yangzijiang Shipbuilding and Yangfan Shipyard.
That money instead has been used to finish some of those vessels. About 70% of newbuildings from the earlier investment programme will be completed, although specific figures have not been given.
TradeWinds reported that 12 bulkers of 38,500 dwt were booked at Yangfan and six lakes-fitted handysize units of 36,500 dwt at Yangzijiang. An earlier programme involved 38 bulkers in China.
Managers quit
Brzezicki says many of the previous managers, responsible for newbuilding cancellations in 2016, quit with the threat of bankruptcy looming.
The newly created Polish Ministry of Maritime Economy and Inland Navigation appointed Brzezicki to take charge. In 2017, his first year, the company turned a loss in the previous 12 months of PLN 700m ($188m) into a PLN 150m profit, the executive says.
Brzezicki forecasts that when 2018’s figures are released, the bottom line will show a “much higher” figure.
Two of the latest abandoned vessels to be delivered last month were the twin 36,600-dwt lake-fitted Jamno and Narie from Yangzijiang. They marked the 60th and 61st ships in the fleet. In total, five newbuildings were delivered last year, the others being another lakes-fitted bulker and two handysize ships.
Newbuildings for fleet growth
Brzezicki says Polsteam is now in the position where it can restart ordering newbuildings, at least four in the foreseeable future so the fleet grows by eight vessels by the end of 2020.
He says there is no intention to sell any ships. The fleet is relatively young, with an average age of eight years and plenty of cargoes.
Since Brzezicki took control of Polsteam, its fleet has increased by at least seven ships, including three newbuildings acquired from the builders for cash due to problems raising bank finance.
No tonnage has been sold during Brzezicki’s tenure. Vessels circulated for sale by his predecessors have been pulled from the sale-and-purchase market and continued trading.
Brzezicki concedes that the challenge ahead is finding good shipyards in China willing to build specialist lakes-fitted bulkers with a high dwt but featuring long, narrow hulls to pass through Great Lakes locks.
He says it may be a case of convincing our “old friends”, a reference to the likes of Yangfan and Yangzijiang. Other yards that have built bulkers for Polsteam include Taizhou Sanfu Ship Engineering and Tianjin Xingang Shipbuilding Heavy Industry.
'Serious' volumes moving
Brzezicki says “serious” volumes of cargoes are moving out of the Great Lakes, mainly agricultural products, a market shared with companies including Fednav, Canfornav and Navibulgar. Steel is a key cargo into the lakes.
But, Brzezicki says that globally, the lakes-fitted fleet is ageing, including Polsteam’s approximately 22-year-old, Japanese-built ships, which will have to be replaced.
We are now fully financed and a profitable company
Pawel Brzezicki
He claims banks have renewed confidence in Polsteam following its restructuring. "We are now fully financed and a profitable company,” he says.
Brzezicki says the restructuring included rebuilding his management team, which at the time of his arrival was only a shadow of what had previously existed at the company. It lacked, for example, a chief operating officer.
What he describes as a “controlling department,” axed by the previous management, has been reformed and a purchasing department set up using recruits from a German supermarket chain.
