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T&T port to link Brazil, China
Thursday, September 6, 2012
German shipping company in US$45m deal
T&T will benefit from an annual purchase of US$100 million in fuel and other key services from Oldendorff Carriers Trinidad Ltd, a 72-year-old German family-owned transshipment company. Oldendorff, one of the world’s largest carriers of bulk cargo, operates 400 ships. Two weeks ago Oldendorff signed off on a US$45 million foreign direct investment contract with the Trade and Investment Ministry and T&T Free Zone Company Ltd. In an interview with the Business Guardian on Monday, chief executive officer Scott Jones said T&T stands to benefit much more as the US$45 million was just an initial investment, which was spent on equipment only. Jones said the company’s core business is iron, ore and coal.
“We also have a lot of customers in the bulk business, particularly steel and mining companies and power stations that need coal.” Jones said the company was looking for an ideal location to transship its iron and ore from Brazil to China and T&T seemed to be that place. “Oldendorff’s client--Anglo American--one of the largest mining companies, is located up the Amazon River, but because they are up the river, they are restricted to medium-sized vessels. The big problem is that the huge market for iron and ore is in China and some Middle Eastern countries, which are very far away.” “So it is not cost-effective for medium-sized ships to go all the way from Brazil to China on a 75-day voyage, “Jones said. “Therefore, we agreed with the customer that Trinidad seems to be that ideal place to tranship the cargo.” Providing further details on the process, Jones said five million tonnes of iron and ore would be shipped out of Brazil to T&T via four smaller ships, each with a capacity of 50,000 tonnes.
“Two of the smaller ships would stop in Trinidad, where Oldendorff’s has two floating cranes six miles out in the Gulf of Paria. The iron and ore cargo would be transferred into a larger vessel--a 200,000-tonne Capesize bulk carrier,” he said. “It takes about four of the 50,000-tonne ships to fill the larger one and roughly about two days to unload the smaller ship and about nine days to load the 200,000-tonne Capesize ship.”
Jones said it’s a continuous operation, so when one ship leaves, another one arrives, where the ship takes eight to nine days to come back from Brazil and 65 to 70 days sailing from Trinidad to China.
Benefits to T&T
“T&T has benefitted almost double the amount we have contributed due to the different types of services we require,” Jones said. The round-the-clock operation, he said, would have more than 125 ships a year loading and unloading cargo. He said the fuel alone would be well over US$100 million a year in purchases, while the company has already spent money on hotels, apartments, car rentals, spare parts, food and other supplies. He said Petrotrin supplies fuel and they have entered into a partnership agreement with National Energy Corporation to use such equipment as its tugs. Meanwhile, he said they received excellent service from GCM Air and Maritime Customs Brokerage Company Ltd, a Couva-based company, which is responsible for providing custom brokerage services for all of Oldendorff’s transshipment cargo. Jones said he was thrilled to experience a quick turnover in the time it took to set up his operation. “Our exploratory visits were just over a year, but in February, we decided to go ahead with this project, which was premised on receiving an approval from the Government by May, which we got.
“By mid-July, we were operational. It happened quickly. We were thrilled because we heard there are a lot of issues and we could have gotten blocked, but we actually had great support from several Government and private companies.” He said the Trade Ministry was the initial contact and InvesTT, as the facilitator, was very instrumental in guiding and assisting them in receiving all approvals. Oldendorff also liaised with the Ministry of Energy, the Office of the Attorney General, the Commissioner of State Lands, the director of Surveys, Customs and Excise Division, T&T Free Zone Company and Coastal Dynamics. The company, he said, had to obtain letters of no objection from Petrotrin and Centrica Energy that drill for oil nearby. “We dealt with a lot of other countries and I was very impressed with the level of professionalism, the quality of questions and issues we had to go through and I found it to be very reasonable.”
Besides it strategic location, Jones said T&T has a great labour pool. The company has already employed 85 locals, including:
• 12 crane drivers
• 12 pay loaders--tractor drivers--who clean up the cargo
hole on the ship
• 30 linesmen--They control the movement of the barges and help with the tugs
• Supervisors and managers
“We only have 15 expatriates, but this figure would be reduced as it’s our intention for it to become a Trinidadian operation,” Jones said.
He said Oldendorff chose T&T for the following reasons:
• Its proximity to the Amazon River to Brazil: “We were looking for a place that was relatively close so these medium-sized vessels wouldn’t have to go very far.”
• High-quality labour: “People that could service this kind of operation
• A place that has deep waters, but not rough and is protected
• Trinidad is below the hurricane belt because we did want to have disasters in the event of a hurricane.
Jones said there is one challenge impeding his business. Customs and Excise has a law called a Droghers Act, a licence or stamp of approval given by Customs to ships/boats trading from port to port within T&T’s coastal waters. “It means that every time we move from one point to another, I have to get my book stamped. It’s tedious process and a waste of time. It’s too bureaucratic.” Jones said it’s an archaic law that no other country uses. Regarding security concerns, he said they had a lot of discussions with Customs. Jones said where Oldendorff operates up the Amazon River is not a drug exporting area. “We have regular searches on the ships and CCTV cameras monitoring all our operations 24/7 and we have an agreement with Customs that they can come and view our videos at any time.” “I have been stopped by Customs in my boat and have it inspected. I welcome that and I encourage it because it discourages any kind of illegal activities.”