Dubai’s GulfNav set to expand fleet



Dubai’s Gulf Navigation Holding, the sole maritime and shipping company listed on the Dubai Financial Market, has revealed its plans to rigorously expand its fleet of ships in 2010, grasping the opportunity to acquire tonnage while values are low.

The company has announced that it is in the process of purchasing four new tankers, and with 12 ships currently in operation in the crude oil and petrochemicals fields, GulfNav intends to increase its fleet to 20 ships by the end of 2010.

“We want to grow the company,” said Per Wistoft, Chief Executive Officer. “It’s going to be a year when ship prices stay relatively low, so it’ll be an attractive time to buy new ships. About a year and a half ago, a medium-sized tanker of 50,000dwt would cost between $52m (Dh191 m) and $55m. You can now get the same ship for $32m, so there’s almost a 40% price drop,” he said.

In a climate where order cancellations are rife as companies struggle to commit to loan agreements for newbuilds, GulfNav is ready to swoop in and take on new tonnage while the markets are still low, boosting its fleet ready for the upturn through strategic acquisitions.

“Timing is everything,” highlighted Mr Wistoft. “We have to buy the right ship from the right seller and at the right time, and that will be the biggest challenge.”

This proactive expansion plan comes after the company’s decision to hold back on investment during 2009, as financial instability prohibited much movement in the sale and purchase market. However, with new plans set in place for 2010, Mr Wistoft confirmed the appropriateness of GulfNav’s strategy in securing its future.

“During the past few years we were quite sure that ship building prices would definitely decrease again. GulfNav was very cautious in terms of signing new deals at that time. As a matter of fact, the company made sure not to jeopardize its position and go into any risk of purchasing new ships with such high prices,” he revealed.