PH FIRM EYES ASEAN EXPANSION
Tugboat operator Harbor Star Shipping Services Inc., which will start its initial public offering this week, has mapped out a refleeting program meant to claim nationwide market leadership and expand into Southeast Asia by 2020.
In an investors’ briefing last week, top officials of Harbor Star announced plans to expand operations in key ports in Visayas and Mindanao, including Surigao, Toledo (Cebu), Bacolod and Iloilo.
Harbor Star president Geronimo Bella Jr. disclosed during the briefing for the IPO that the company had plans already in place to set up offices in Malaysia and Indonesia in anticipation of the 2015 Asean economic integration.
“We are already set for the challenges ahead. Our expansion plan is anchored on the expected increase in volume of trade among Asean countries and the international market. We have identified Malaysia as our primary market since Johor Port will be one of the busiest ports by 2015 and onwards,” Bella said.
“As of now, Johor and the Port of Tanjung Pelepas have about a volume of eight to 10 million TEUs (twenty-foot equivalent units—a gauge of cargo capacity) yearly, while Singapore currently has about 15 million TEUs yearly. If one is to see the expansion in the ports of Malaysia, then competition will be heavy by 2015 and Singapore may likely be overtaken. So, with more ships coming in, the more they will need tugboats,” he explained.
The conventional outlook in the shipping industry, Bella said, was that Johor Port in Malaysia would be the number one port by 2025.
Apart from Malaysia and Indonesia, Harbor Star is looking at opportunities in Vietnam, Papua New Guinea and Myanmar. The strategy, Bella said, would be to enter into joint-venture agreements with local counterparties or form joint-venture companies to bid for service contracts with port operators.
In the Philippines, for instance, Harbor Star has been a key partner of port operator International Container Terminal Services Inc.
The company began its regional expansion with the acquisition in early 2012 of an ownership stake in Peak Flag Sdn. Bhd., a Malaysian marine services company.
“We’re not limiting ourselves only to the Philippines,” said Rodrigo Bella, company vice president for operations. He told reporters, however, that the priority would be to become the leading player in the Philippines.
Part of the strategy is to diversify revenue stream. In particular, the company is getting ready to service oil exploration players. It is in discussion with oil exploration companies for the long-term charter of its AHTS (anchor handling tug supply) vessel.
Harbor Star is the second-largest tugboat firm in the country with a fleet of 27 tugboats against the leading player, which has 39 tugboats. But Bella said the company was the most efficient in terms of fleet utilization.