CSL’s partnership includes a 50-per-cent stake in the cement carrier Furuvik and other vessels.CSL
Ship owner CSL Group is expanding its global presence by taking a 50-per-cent stake in a fleet of cement vessels that serve markets in Europe, Asia and the Caribbean.
The partnership with Eureka Shipping Ltd. of Cyprus gives CSL access to the construction materials trade, a niche market that has weathered the shipping crisis better than other marine sectors, said Louis Martel, chief executive officer of Montreal-based CSL.
Mr. Martel said CSL is not releasing terms of the investment in the Cyprus-based carrier, which operates nine cement powder ships with capacities of 3,000 tonnes to 10,000 tonnes.
Eureka’s parent company, SMT Shipping, runs a fleet of 45 bulk ships. Eureka’s ships serve cement makers and customers in the Baltic Sea, Atlantic Ocean and other areas.
CSL, with a fleet of about 60 bulkers around the world, is owned by the three sons of former prime minister Paul Martin. CSL has operated four or five much larger cement ships in the Australian market for more than a decade, Mr. Martel said by phone.
The global shipping market has seen a long list of bankruptcies, mergers and partnerships after rates collapsed in the financial crisis of 2008-09. Ship owners that expanded their businesses with inexpensive debt found themselves chasing a dwindling supply of cargo and were forced to pare their fleets by sale or scrapping.
Since its peak in 2008, a closely watched gauge of demand for shipping of bulk industrial commodities has fallen by 85 per cent. The Baltic Dry Index, which tracks charter rates on major ocean routes, has risen by 42 per cent in the past 12 months.
“[For] every ship type, the market was booming up until 2008ish,” Mr. Martel said. “After that, some sectors kind of collapsed. [Cement carriers] ships dropped in value but not as much as the containers, the tankers, the generic bulk carriers because they are serving a very niche market. That’s all they do – carry cement for those very large cement companies.”
Threats of a trade war between the United States and China have rattled ocean trade markets, but the impact has been limited beyond U.S. soybeans, JPMorgan analyst Noah Parquette said in a research note.
Meanwhile CSL says it recently reached an agreement to end a brief strike by 36 deck officers represented by Canadian Service Merchant Guild on 12 ships that sail Canadian waters.
Eric Atkins