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Hubline explores liquid bulk sector in tie-up with Petronas Chemicals

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Malaysia’s Hubline is expanding beyond the dry bulk sector it entered in 2016 after exiting the container sector the year before, and looking at opportunities in the liquid bulk segment.

The Sarawak-based shipping company said in a stock market announcement that it had signed a memorandum of understanding (MoU) with Petronas Chemicals Marketing (Labuan) Ltd (PCML) to explore the possibility of providing logistic services in the transportation of liquid chemicals.

The agreement ties into Hubline’s five-year plan to look at ways to cooperate and collaborate with PCML to develop its chemical vessel technical capability to meet the latter’s needs. Although there is no contractual obligation, Hubline hopes it will form a basis for working together more in future.

With Petronas Chemicals’ experience as an international marketer and trader of petrochemical products from Malaysia and other sources, Hubline said the collaboration will give it an advantageous platform to expand its existing dry bulk logistics services.

“The MoU creates no contractual relationship between Hubline and PCML but is aimed to provide a framework of cooperation and for any future term arrangement between the parties for dry bulk and liquid chemicals logistic services,” it said.

“Upon the satisfaction of this, both parties may enter into negotiations to secure term arrangements for dry bulk and liquid chemicals logistic services with PCML,” Hubline noted.

Hubline chairman Ibrahim Baki was quoted in local media as saying at the signing that with PCML’s cooperation, Hubline hoped to expand its reach into markets such as Australia, New Zealand and China, which are areas where Petronas also supplies products such as urea.

“Hubline has a fleet size of 25 sets of tugs and barges, fully deployed and servicing the niche Southeast Asian dry bulk market. The current routes cover ports in Indonesia, Vietnam, Thailand, Singapore, and the Philippines, transporting cargoes such as coal, gypsum aggregates, sand, wood chip and scrap iron,” he said.

Hubline quit the container business in 2015 after several years of mounting losses. It restructured and raised money in 2016 to purchase several sets of tugs and barges to expand its breakbulk division and focus on the dry bulk trade.

Depressed freight rates, severe overcapacity and strong international competition after cabotage rules were lifted last year have hit Malaysian domestic carriers badly. PDZ recently announced it was entering the Indonesian market instead.