While the current environment remains challenging, the company formerly known as SILK Holdings, was reported as saying in local media that it saw continuing long-term demand growth for the transportation of liquid bulk petroleum and petrochemical products.
“This demand for clean petroleum products (CPP) had further increased, especially in developing Asean countries for general consumption and industrial demand,” the company said after its annual general meeting.
It added: “Correspondingly, the demand for clean petroleum products/chemical tankers, which is a critical logistic component of the petroleum and petrochemical distribution network, is expected to remain robust.”
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M&G noted however that the slump in oil prices had resulted in a drive towards cost rationalisation within the industry and this would hit the upstream segment especially.
“Despite the improvement in world crude oil prices, actual activity remains muted. There are no clear indicators from the major oil producers on increased spending particularly in the upstream business,” it said.
For example, operating conditions for the marine logistics of the upstream division, spearheaded by Jasa Merin (Malaysia), remained challenging.
Jasa Merin’s vessel utilisation had fallen from an average of 88% in 2014 to an average of 51% and 48% for 2016 and 2017 respectively.
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