“Singapore’s bunker market has continued to see strong demand, and we may still consider further expansion of our assets when the opportunity arises,” Wong KC, cfo of Wee Tiong Group, told Seatrade Maritime News.
The port of Singapore sold 4.46m tonnes of bunkers in January 2016, up 7.2% year-on-year, according to figures from the Maritime and Port Authority of Singapore (MPA).
Wee Tiong has locked its bunker tankers into mostly short term charter terms for operations in Singapore’s bunker market, where demand levels have remained strong. The company will focus on chartering out its bunker tankers rather than transform into a physical bunker supplier.
In November 2016, Wee Tiong concluded the acquisition of 11 bunker tankers from the now-defunct bunker supplier Searights Maritime Services. The company, with its core business in rice and sugar commodity trading, has divested into the marine fuels sector with the ownership of bunker tankers.
“It is a natural part of business expansion for us. For the past five to six years general commodities prices have not been doing very well. Hence, we acted on the opportunity to enter the marine business when oil prices crashed, and we were in a position to buy Searights’ assets at very competitive prices,” Wong explained.
Wong said that the company does not rule out becoming an accredited bunker supplier in Singapore, but the short to medium term goals are to generate sustainable returns for its capital investments before making fresh investments to establish bunker trading and barging operations.
The addition of 11 bunker tankers from Searights brings Wee Tiong’s fleet to 17, as it already has six bunker tankers acquired earlier from a Malaysia-based bunker player Victory Supply. But four of those ships are currently deployed in Malaysia’s Port Klang.
“We had been an asset light company prior to buying the ships from Searights. With our long term view that oil prices will rise from current levels, coupled with continuing healthy bunker demand in Singapore, we anticipate profitable returns from our bunker tanker chartering business,” Wong said.
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