In a sharp reversal of company policy the Noble Group is now actively adding to its owned fleet. With the volatility of the dry bulk market making forward earnings a tough guess for those relying on charter deals, the diversified commodities trading and transportation firm, which in the past dismissed owning ships as being detrimental to the bottom line, is scouring the market for tonnage.
A 27.4% or US$75m drop in interim gross profit announced on August 10 was largely attributed by chairman Richard Elman to reduced contributions from the chartering division.
According to vice chairman Harry Banga, 'Trying to counter this volatile charter market is a priority.' The plan is to have eight to 10 owned ships. Noble sold two ships last year, which brought its owned number of vessels down to just one. 'We are not going to be a Cosco or anything like that,' said Mr Banga. Chartering remains the key. Last year the company chartered around 1,000 ships and at any given time has at least 100 ships on charter.
Increasing infrastructure ownership as a way to be firmly in charge of the supply chain and counter volatility is a strong theme at the Hong Kong-headquartered firm at the moment with a new fully owned Argentinean grain terminal coming on stream last month, an iron ore terminal due to open in Mangalore, India in three years, and the recent opening of a crushing plant in China's Guangxi province plus three smaller ones in Andhra Pradesh, India. [14/08/06]
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