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TWST: What is B+H Ocean Carriers?
Mr. Hudner: We are a shipping company. We have 15 ships presently, eight of
which are product tankers and seven are combination carriers. It can carry both
wet and dry bulk cargoes and the product tankers carry principally refined
petroleum products and also vegetable oils.
Six of the product tankers are single-hull ships that we are in the process of
converting to double-hull ships. One has been done, and the second one is
underway. Over the next 12 months, we will have all six of them done at a
shipyard in China, and they will then become full double-hull chemical carriers.
They will be completely compliant for all petroleum products, as well as a
number of chemicals, including vegetable oils, palm oils and soft oils, which is
a big part of our business for those particular ships. We see that as an
important building block for the future. I think that's an area that's going to
expand as biodiesel requirements become more meaningful, particularly in Europe
and to a lesser extent in the US.
On the combination carrier side, these are ships that primarily trade wet
cargoes out of Europe to North America and then dry cargoes, typically coal,
back to Europe. So, depending on the balance of the wet and dry sectors, it can
be an extremely interesting business. I'd say that the common denominator of the
types of ships that we own is an exceptional degree of commercial trading
flexibility, both for product carriers and the combination ships. We have
multiple sourcing of cargoes and destinations. You can put together very
interesting trading combinations, the effect of which is to reduce your balance
time and increase your payload time. So we find that quite interesting. I think
that is pretty much where we are today.
We have a good cash position. We are very interested in making further
acquisitions, but we do feel we are at a rather high level in the cycle of
shipping values and earnings, as well as freight rates, and we are being
extremely disciplined in approaching any acquisitions, both in terms of having
long-term employment and in terms of the prices that we are willing to pay. I
expect at some point in the not too distant future, we will see a softening of
ship value, as there is a very substantial order book of new ships being build
up to 2009. We had three big years already - 2004, 2005 and 2006 - with very
significant deliveries of almost all types of ships from Europe and Asia.
Tickers included in this excerpt: BHO
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