ECONOMY

Greek shipowners sell underperforming reefers and look for profits in other sectors

Refrigerated container ships, better known as reefers, a market traditionally popular with Greek shipowners such as the Restis and Laskaridis families, has not grown on par with other shipping sectors which witnessed great expansion in 2004 and 2005. The competition that container ships with refrigerating systems have faced and are still facing has resulted in the shrinking of their share of the global market. At the same time, the level of rates, despite any temporary rises, has not followed the course of other domains, such as tankers. Consequently there has been a trend away from the reefer market, favored recently by the high levels of prices for used ships, compared with past years. Therefore, market analysts note that if anyone was considering walking out of the reefer market, the current period would be the most appropriate. One of the companies that chose to leave this sector altogether was Elmira Shipping, based in Athens, which a few weeks ago sold all four reefers it owned, constructed in the 1990s. Industry publication TradeWinds reported that the company received $70 million for the vessels, registering a net profit of $10 million. Elmira has left the sector completely, while maintaining its presence in other markets. The company also sold its entire dry-bulker fleet over last year, but has recently gained new presence in this domain by purchasing a new dry-bulk ship. It is unlikely that this will be repeated with reefers, though. Another Greek company, Lagoa Shipping, made considerable profits by gradually selling off its 19 reefers over 18 months. It received an estimated $185 million from these sales, also opting to move out of this domain as far as ownership is concerned, though it has maintained the management of 18 of those vessels, utilizing the know-how of its employees. The Laskaridis family is among the reefer market’s important players. It invested considerable funds in the construction of a large and modern fleet in the early 1990s, so that last year it controlled about 60 ships. However, it chose to sell 19 of its vessels over the last 12 months, receiving some $275 million. This cannot be seen as any sign of gradual departure from the sector, as the company has continued to invest in the market of shipping fishing products with the appropriate vessels. Within this context, it acquired 100 percent of Riga Transport, thereby gaining a strategic position in this market in the Baltic Sea, while a few months ago it signed a partnership with a major Chinese fishing company, a deal worth $350 million. This is why shipbrokers believe that the sales of the reefers were mostly made in order for the Laskaridis family to profit from the high resale price of ships. The Restis group has traditionally had a strong interest in the reefer market, yet in recent years it has gradually limited its presence, turning to major investment in tankers and dry-bulkers. Now the group owns only four reefers, compared to 13 a few years ago. A similar tactic is being followed by Target Marine, of the Komninos family. In recent years, it has sold off six reefers, maintaining today a fleet of only four such ships, while investing in tankers and dry-bulk vessels. A large portion of the Greek-interest reefers sold has been absorbed by Russian companies or others based in the Baltic countries. One of the main reasons for Greek shipping’s turning away from reefers and to other sectors has certainly been the fact that the latter have grown more attractive while reefers have become more unpredictable regarding their future course, unlike what used to happen in the past. Contributing to this was the rise in market share of container ships, which has increased risks for shipowners.