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Last updateΔευ, 25 Ιουν 2018 11pm

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Back Βρίσκεστε εδώ: ΑΡΧΙΚΗ Conference Conference 2018: The Global Impact of Shipping Θεόδωρος (Ted) Πετρόπουλος, Επικεφαλής της Petrofin Research – The Global Impact of Shipping

Θεόδωρος (Ted) Πετρόπουλος, Επικεφαλής της Petrofin Research – The Global Impact of Shipping

Mr. Ted Petropoulos

Good Afternoon, Ladies and Gentlemen. Thank you very much for being here and giving me the opportunity to give you some key remarks. Because of the shortage of time, and I have been allocated seven minutes, I will try and as quick as I can and I will concentrate on the key points I want to mention. The first point, the first thing I want to concentrate on is why are we the leading shipping force in the world? And I won’t go into the intimate and long list of possible attributes which you have heard all these years, but I am going to maybe attach some importance to something different today.

We have a record of consistent growth, and that growth is uninterrupted and it didn’t even take the big crisis from 2008 onwards for that to be interrupted. If you see in that list which is a bit difficult to see, but Greece is at the top, we have some very big countries next to us, Japan, China and so on.

So, here is the question, why, and is there something knew, something fresh that may add an explanation as to why we are being so successful.

And I would like to point out in this graph, which is a variable by the organizers if you wish to have it —but you can also visit our site at www.petrofin.gr— what we have here are four key-parameters in the evolution of Greek shipping. The red one at the bottom is the number of ships which are Greek owned and that showing a modest growth.

The one further up is the average vessel deadweight, so what we are seeing is the concept of jumboisation where basically each ship that is being bought is bigger than the previous one and so one. And this applies from our research across all sectors. Everything is affected by this. With larger vessels come larger costs, normally sophistication, eco vessels and so on.

The third line, which is the blue line, going up, is the total deadweight. As you see, this is really exploited from a basis of hundred up to two-hundred and fifty approximately, so we are two and a half the size of where we were in 2001. And at the same time the one which is slopping downwards from left to the bottom is the average age of the fleet.

So, as you see, what the Greek fleet has succeeded in doing is to grow, to grow in vessel size, to grow in vessel quality, to reduce the age substantially. So this is quite the revolution. With that as a backdrop, before I go to Greek ship finance let me just conclude my first point.

One of the main reasons that Greek shipping has grown is the fact that it has realised very early on that there are economies of scale; economies of scale in the size of shipping companies.

That realisation came against the trend that Greek owners wanted to be independent alone and sometimes be smaller rather than bigger. They realised that in the world of globalisation and with the international trade growing, they had to be bigger. So this process commenced, and I will give you some key numbers for you to bear in mind.

First of all, the number of companies that have over a million deadweight has grown to 75 in Greece from about 60. Now, the reason I mention this is that these companies, these 75 entities control 80% of Greek shipping, so we have concentration coming in in the numbers.

At the same time small owners which are 1-4 vessels have brought in terms of deadweight to 5% of the total. Now, that is a clear sign that the industry is moving towards bigger fleets.

The benefits which we have, we know about economies of scale are substantial.

I will now move to another benefit which is not perhaps so well printed, which is the benefit of finance. As we all know, finance has become difficult, and it has become difficult because on the European banking model, lets’ face it, that system of European ship finance has failed.

And the reason it has failed is because it wasn’t risk-assessed properly, the crisis that hit showed weaknesses and at the same time the rewards which were demanded by banks bearing in mind the risk capital and the real risk were lower as a result of which enormous loses and a mass exodus of European banks from shipping.

This is not a blip. This is not something that has happened and we come back. By now this has become systemic. We have an issue that European banks have realised that either they will charge a lot more, which is very difficult to do, or they will be very selective in their risk criteria.

And what they have decided to do is move up the quality scale and decide to concentrate on the top Greek names which can now actually enjoy the benefits of not only bank finance but also all kinds of financing including investment links with all the investment funds which are available.

So, if you are big, it doesn’t matter whether you are a public company or you are a private company, you have options and in this market where the world has become a smaller place through communications and where the Greeks are competing internationally, they have to remain competitive.

And to do so, one of the pillars of that competitiveness and in order to finance their expanding fleet and be able to compete in terms of not only numbers in terms of cost but also in terms of presence, in terms of the latest type of ships, and so on, they need the right finance.

So, the main point here is that economies of scale have been further augmented by the available finance options and investment options which bigger companies have.

Now, just to comment on this, we have, we don’t have an issue with the term consolidation. There is nothing negative about it. It is a positive development of an industry that is actually transitioning itself from being highly fragmented and to being a competitive global business.

Greek shipping has stopped being a regional strong business... has become a global player. As a global player, there are rules, and one of rules of the game is that each participant has to be bigger. And that is what Greek shipping has done and that is one of the main reasons that it has not only survived, but it has adapted.

So Greek shipping instead of fighting the change, has actually adopted it, and has developed it faster than just about any other nation, and the results are there for all to see.

We now move to the main Greek ship finance and essentially what we have there is the development. We have here last year’ s results on Greek ship finance where we still see and the new ones are being processed as we speak, we still see European banks at the top, Credit Suisse, DVB, leftover of Royal Bank of Scotland, CSBC and so on. So, we still have the Europeans quite prominent.

From early information which we have received but we haven’t finalised all the entries, there is going to be a massive change this year. So when we publish in about a month’s time all the new analyses, you will see that there have been profound changes and the number of European banks we have reduced are gone from the equation.

I now move on to my last slide, which essentially —one but last— is Bank Lending to shipping. Utilising the information received so far, we have, these are the preliminary figures, we have Bank of China which has actually now risen to the top position, so gone are DMB, the Bing Europeans, of course HSH, RBS and so on, all these gone in terms of down the scale and what we now have is Bank of China number 1 and then we have Bank Paribas which has actually defined the trend and staying high, KFW, and then we have China Exim Bank, Subicom and so on. So really we have on the global basis the development of Far East lending.

Collectively the Far East is still about 15%-20% of the total, but of course this is just the tip of the iceberg. Behind all these numbers which are only bank finance we have the massive ship leasing activity which has taken place in the Far East.

And moving on to my last slide, what we have on the right and side, here, are the end 16, top 40 portfolios, we just did that on the top 40 portfolios then, because we felt that we did not have yet the accurate information we wanted.

And what we have is the preliminary end seventeen and we are showing there is basically the changes, whether or not they are up or down in various numbers and the main points and you can have a copy of this, is that the Bank of China has gone to number 1 spot, the overall global portfolio which is 400 billion, about 15%-20% is Chinese, the biggest traditional player has moved substantially down the ladder and we now have the rebound of Japanese banks.

Chinese banks are still there of course, working with the supports of... in Greece of eksartisi and of other players and they are developing very fast.

On the other hand, we now have the re-awakening of Japanese banks which are coming in either in the leasing model or in the finance model.

So, and this is just a list of some Chinese leasing companies. The number is growing all the time and they are adapting and becoming much more able to handle European owners, still, the process is a long and torturous one and requires normally 2-3 months, however, where you have projects that are not time-sensitive, it can happen.

So, that is my main message today. Greek shipping is growing for many reasons but one of the main reasons is economies of scale and the adaptability and use to financial and investment tools which are not available to the smaller owner, and this is good for Greek shipping because it is growing in a robust way. Thank you.

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