Local media quoted executive chairman Mohd Azlan Hashim as saying on the sidelines of its annual general meeting that the move was aimed at ensuring the company continues to remain sustainable despite the softer oil prices.
“With utilisation rates plunging gradually to 50% currently, from 80% previously, we need to be on the conservative side and maintain prudent spending and cost management," he said.
Mohd Azlan noted that Silk had entered the downstream market for liquid bulk cargo transportation in the middle of last year. This has cushioned the impact from the slowdown in the upstream business.
“The three tankers that we have are all fully chartered out, meaning it stands at 100% utilisation rate. We will not buy more tankers, but will look at the market needs and demands instead,” he said.
Silk has 21 vessels for its upstream business, of which only 50% are utilised at current crude oil price levels.
Separately, Silk also announced that it would be changing its name from Silk Holdings to Marine & General to better reflect its new business direction after the sale of its highway business.