Asia/Pacific News
Cosulich: I Hope Mandatory MFMs Will Force Singapore's Second-Tier Bunker Players Out of the Market
Timothy Cosulich, CEO of Italy-based bunker player Fratelli Cosulich, says he hopes the mandatory use of mass flow metering (MFM) systems for bunkering in Singapore will result in the port's "second-tier" bunker companies exiting the market, CNBC reports.
"There are suppliers who don't care about their reputation so they can afford to be unreliable yet aggressive on prices. That seriously damages the market and the reputation of Singapore in the bunker industry," said Cosulich.
"I'm very happy to compete with reliable players: players who play by the rules and focus on quality. I hope those second-tier players will leave the market [following the introduction of mandatory MFM use]."
Last year the Maritime and Port Authority of Singapore (MPA) announced that from January 1, 2017 it will be mandatory to use a MFM system for Marine Fuel Oil (MFO) bunkering in Singapore.
Cosulich says the development should not only create a more level playing field in the world's biggest bunkering port by volume, but the exit of the "second-tier" players should also elevate margins by 10 to 20 percent.
"We're just making enough money to break even and I don't expect this to change for the next year or two. It's a very competitive market, considering there are about 60 suppliers at the moment in Singapore," said Cosulich.
"The market is big, but it's definitely not big enough for 60 suppliers."
Looking ahead, while Cosulich expects Singapore to remain as the hub for Southeast Asia, growth for the region will happen elsewhere.
"I believe the growth now comes from neighbouring countries particularly Thailand, Indonesia, Malaysia and the Philippines. These will be the focus [for our bunker business]," he said.
Last week, preliminary data released by the MPA indicated that this year the port has had its best ever sales performance for the first nine months of a year.
