EMEA News
Stena: Private Equity has "Fundamentally Damaged" the Tanker Market
With new orders of ships prolonging depression in shipping markets, Swedish carrier Stena is looking to niche operations and diverse businesses, Carl-Johan Hagman, the company's CEO of Shipping, Ferries, and Drilling, told ShippingWatch.
Hagman said the company's tanker division was seeing solid demand at the start of the year, but private equity firms are unbalancing the market again.
"As soon as the market improves new ships are ordered, and then the positive development quickly disappears again," he said.
"It's completely depressing that the market is so fundamentally damaged."
Hagman said Stena uses its diverse businesses to balance risks, with a "fairly good" offshore market now offsetting some of the problems with tankers and ferries.
"When there's general overcapacity in many places in the market, it's important for us to have three segments so that we can always be active in one area if another area is a little quiet," he said.
"Another thing that keeps us going is our family ownership, which gives us a different kind of freedom than other companies have.
"We're also betting on globalization in several of our companies and we have many different partnerships in place."
Within the tanker market, Hagman said the company is looking at niches including key cargos in particular geographies, as well as liquefied natural gas (LNG).
"There's no payoff from staying in the main markets," he said.
In the ferry business, Hagman said things are going smoothly for the moment, but slowing growth in Europe and new environmental regulations are likely to present a challenge.
"We're not pleased that we have to implement a rate increase that could make customers leave," he said.
"Shipowners may end up relocating ships from the European sulphur emission control areas (ECA) to other regions where the regulations don't apply."
Stena has said it is considering switching a number of ferries to methanol fuel to reduce emissions.
