TradeWinds: Greece’s Aquavita battles for China chartering grip
Evgeniy Lavrenko is starting over in the search for the right connection with Chinese charterers but he still believes a European bulk operator can compete for their business
Athens-based bulker operator Aquavita International is not shutting up shop in China despite the departure of its last chartering man in Qingdao.
Competition for suitable commercial personnel is a challenge and principal Evgeniy Lavrenko acknowleges he may remain without a Chinese foothold for some time.
Aquavita’s outgoing Qingdao manager, Charles Zhang, is helping recruit to fill his former position after moving across town to Winning Shipping. TradeWinds has recently reported on a string of opportunistic capesize and post-panamax purchases by Singapore and Qingdao-based shipowner Winning.
Zhang’s departure follows that of former colleague David Zhao early this year to provincial government-controlled Shandong Shipping Alliance (SSA). SSA has grown its dry bulk team, not because of new acquisitions but because of the redelivery of ships from long-term charters.
Zhang and ex-Banchero Costa (Bancosta) broker Zhao both signed on with Aquavita three years ago to help it build new relationships in China. But that has proved difficult and Aquavita’s book of business remains heavily weighted towards Europe.
The Ukrainian-Greek company, founded in 2006, currently runs about 50 ships from handysize to post-panamax, none owned and only three or four chartered in for longer than two years. It has reported steadily growing cargo volumes in recent years, from 8.5 million tonnes in 2010 to 16.2 million tonnes last year. But Lavrenko says that, in the current market, it has been a struggle to increase volumes while remaining profitable.
Fortunately for this year’s business, Lavrenko grew pessimistic during early 2014 and, last July, Aquavita gradually began selling paper freight. A series of panamax forward freight agreements (FFAs) for full year 2015 done at rates around $10,000 per day have cushioned the company against historically harsh spot rates.
Positive signs in today’s market make Lavrenko think it may be time to readjust his short position.
“July is usually the weakest market of the year but this year, July has been stronger than anyone expected,” he said. “And every shipowner knows the market will improve but nobody knows when.”
On the cargo side, Lavrenko sees an underserved market in China, with many companies that have become relatively large charterers but without having time to develop chartering experience.
Chinese charterers are like charterers anywhere else in the world, Lavrenko says, in that they will source freight based on price and reliability, not so much on nationality.
“There are many new ship-operating companies that may be able to offer a very low freight rate from time to time but how they perform is the question,” he said. “Industrial clients need you to perform on time. If the market goes against an operator, it may be difficult to perform. But we always perform.”
Aquavita counts Chinese grain companies among its customers but Lavrenko says that, in general, it has been a challenge for a company like his to find suitable personnel who can build the kind of relationships with Chinese charterers that his has done with European and other international trading and industrial clients.
“We are not a Norden or Oldendorff but we have developed relationships with a few good clients and served them, and we want to communicate the message that we can provide good services to Chinese clients,” Lavrenko said.
BY BOB RUST BEIJING