Bahri Annual Report-2011

Board of Directors Report 2011

Liquefied Petroleum Gas (LPG)

bareboat charter contracts, (26) carriers are on time chartered agreements, (19) carriers operate in the spot market and additional (3) carriers are under construction. Petredec operations cover Asian, European, Caribbean and Middle Eastern markets. Over the past years, Bahri realized remarkable profits from this investment. Bahri’s share in Petredec’s net profits amounted to SAR 135.38 million in 2011, compared to SAR 36.93 million in 2010, marking an increase of 267% over the previous year. During 2011, the construction of (4) chemical carriers was completed and were delivered in June, August, September and October. Also, the (2) carriers purchased in March and April of the same year were also delivered. These vessels joined service in the pool with the (NCC Odfjell) JV immediately upon receiving their delivery. Voyages: The chemical fleet completed (100) voyages during 2011, (45) were completed by the carriers operating under the pool of (NCC Odfjell) JV and (55) voyages were completed by the carriers operating under time-charter contracts. Volume of Shipments: The total tonnage transported by the chemical carriers’ segment in 2011 reached (3.7) million tons of chemicals, oils and clean fuel shipped to destinations globally. Of the total of these shipments, (1.7) million tons were carried by the carriers operating in the pool of the (NCC Odfjell) JV and (2) million tons were carried by carriers operating under time-charter contracts.

Bahri operates in the Liquefied Petroleum Gas (LPG) segment through Petredec Co. Ltd. which was founded in 1980. This Bermuda-based company has offices in Monaco, Singapore and the Bahamas, operating exclusively in the trade and transport of LPG. In 2005, Bahri bought a 30.3% stake in the share capital of Petredec Co. Ltd. The business activity of Petredec in LPG is supported by a fleet of specialized LPG carriers, consisting of (64) vessels of various sizes, of which (17) are owned by the company, (2) carriers are on In 1990, Bahri founded the National Chemical Carriers Company (NCC) with a capital of SAR 200 million, in collaboration with Saudi Basic Industries Corporation (SABIC) with an ownership of 80% and 20% respectively. Additional funds were injected to support the expansion plans of NCC, increasing its capital to SAR 610 million by the end of 2011, shareholders’ equity to be SAR 1,079 million and total assets to be SAR 3,647 million. The National Chemical Carriers Co. Ltd., an affiliate of Bahri, currently owns (19) specialized chemical carriers, operated as follows: (9) Carriers are operating in a commercial pool arrangement with (NCC Odfjell Chemical Tankers JLT) company. (6) Carriers are chartered to the International Shipping and Transportation Co. Ltd., an affiliate of Saudi Basic Industries Corporation (SABIC). (3) Carriers are chartered to Odfjell, a Norwegian company, under a bareboat capital lease arrangement. (1) Carrier is chartered to the Saudi International Petrochemical Company (Sipchem). The purpose of NCC alliance with Odfjell in mid- 2009 is to incorporate a JV company owned equally, to commercially operate the fleet of chemical carriers’ of both companies’ in one pool to transport chemicals, vegetable oils and refined petroleum products throughout the world. This JV will enhance its presence in the global markets with a special focus on the GCC region. Successive receipt and operation of carriers in this pool confirmed the financial returns and the presence of this strategy.

Chemical Transport Segment

Main Routes for Chemical Fleet Globally:

Middle East - Far East.

Middle East – Europe.

Far East - Europe - United States.

Europe - United States - South America.

Europe - Far East.

United States - Europe - Far East.

United States - South America.

South America - Far East.

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