Bahri Annual Report-2017

Annual Report 2017

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The CEO’s message

Bahri has just completed a year characterized by prosperous leadership and success. We are a major Company that has grown to become a national symbol of pride and one of the world’s largest businesses in our sector. We are proud of the fact that we have hoisted the Saudi flag on 36 vessels that have been relaunched in line with Bahri’s objective of raising Saudi Arabia’s standing in the international maritime sector and increasing the volume and reputation of the Saudi shipping fleet and raising Saudi Arabia’s standing in the international maritime sector. We have added seven new vessels to our fleet including five VLCCs and two chemical tankers. The number of ships managed by Bahri has reached 88. In addition, we have operated 387 cargo flights and transported 785.5 million barrels of oil all over the world. To complement our business further, Bahri Logistics has launched six new and advanced multipurpose vessels and five dry bulk carriers. Bahri has increased its international presence and expanded all over the world by establishing new commercial representative offices in Europe and The importance of the maritime shipping industry is demonstrated by indicators and statistics that indicate 90 percent of commercial activity in the Kingdom occurs via the sea, especially as the country enjoys a 1,500-mile coastline. In fact, the Saudi Vision 2030 emphasizes the role of the Kingdom as a key player in the region and highlights the importance of the private sector’s role. The government is keen to reinforce Saudi Arabia’s leading position in the maritime shipping sector and issued a royal decree to offer management and operations contracts to the private sector through a public tender process. This significant shift in the way Saudi seaports operate has helped the government alleviate certain substantial costs by transferring operational control to the private sector while still increasing governmental returns to SAR4.5 billion. Bahri’s endeavors, which include forging many partnerships necessary to grow its business, have been recognized in the form of several awards this year. In 2017, the Company was honored with the Maritime Standard’s award for the USA. We plan to expand our international presence further by opening up similar offices in Asia throughout 2018.

Ship Owner/Operator of the Year and Ship Manager of the Year in addition to receiving The Lloyd’s List Ship Operator Award for South Asia, Middle East and Africa 2017. It also won the Lloyd’s List Intelligence Innovation Award for South Asia, Middle East and Africa 2017 as well as being named MEED’s 2017 Transport Company of the Year. Bahri’s list of 2017 accolades was capped off with the Indian Maritime 2017 Award for Best Shipping Line of the Year in the category of Breakbulk Heavy Lift Operator, and the Company qualified for the finals of the Environment and Safety Compliance Awards. Key partnerships established during 2017 include a joint venture with Saudi Aramco, Lamprell Plc and HHI to establish and operate an international maritime yard at the King Salman International Complex for Maritime Industries and Services; Bahri will contribute 19.9 percent of capital towards the venture, equivalent to SAR522.38 million. Bahri also signed an agreement with Bolloré Group to set up the Bahri Bolloré Logistics joint venture. Bahri owns a 60 percent stake while Bolloré owning the remaining 40 percent. The project aims to facilitate expansion in the logistics management market and tap into the fast-growing supply chain in the GCC. Additionally, Bahri inked an agreement with the Saudi Railway Company (SAR) under which Bahri Logistics will provide transportation and shipping from around the world to SAR’s hubs of operation in the Kingdom, as well as customs clearance services.

launch BahriBunge Dry Bulk Ltd. with $35 million of startup capital. Bahri will owns a 60 percent stake in the venture, while Bunge owning the remaining 40 percent. Moreover, Bahri has signed an agreement with the Lloyd’s Register’s human factors team to improve the Company’s culture of safety among our employees. This reflects Bahri’s commitment to implementing the highest standards of safety measures for workers both on board our ships and in our departments. Bahri has substantially improved its performance and operations in several areas as outlined below: - We improved our performance in the Ship Inspection Report (SIRE) Program by 12 percent. The Company concluded the year by recording the industry’s best global average of 30 percent at the Oil Companies International Marine Forum (OCIMF). - The Company became the main operator for key customers such as Saudi Aramco, S-Oil Corporation, UNIPEC, Reliance, Essar and Shell. - The Company’s performance in 2017 improved by13 percent on the Port State Control (PSC) indicator for ship inspections compared to 2016. Bahri also succeeded in committing no violations. - Bahri’s fleet has undergone 28 inspections by the US Coast Guard (USCG) throughout the year with zero negative observations recorded compared to a similar period in 2016, which saw 22 inspections resulting in three violations. We present to you Bahri’s 2017 annual report, which contains further details on all our lines of business as well as detailed statistical tables and infographics. This is to ensure we are meeting the highest transparency and governance standards which are integral components of our corporate activities. We are forging ahead by entering new areas of operations and examining fresh prospects to improve by identifying the finest technical solutions and highest safety and security standards upon which we can base our business. I would like to conclude by thanking everyone who has contributed to Bahri’s achievements, especially our government headed by the Custodian of the Two Holy Mosques and his Crown Prince together with all related organizations and their staff.

The company have entered into a joint venture with the Dutch firm Koninklijke Bunge B.V. (Bunge) to

Abdullah Aldubaikhi Chief Executive Officer

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