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Bahri Annual Report
2016 Business Units Performance & Achievements
Bahri Annual Report
2016 Business Units Performance & Achievements
Although the market correction was stronger than anyone anticipated, Bahri Chemicals is continuing its drive to explore and sign more strategic partnerships to provide increased tonnage and cargo opportunities coverage. The expansion of Bahri’s global commercial footprint, through a robust fleet diversification program, thus broadening its product offering, remains a strategic priority. In addition, Bahri’s capital investments, is continuing, to ensure a first class and cost efficient service to its clients.
On the other hand, the launch and implementation of ‘BigData’ program will have far-reaching results, and will allow Bahri Chemicals to gain a market lead over the competition. The market’s recovery in the short to medium term will depend on its ability to absorb all new deliveries. With new ship orders significantly reduced in the chemical sector, there is reason for optimism in the next twelve to eighteen months.
improve the fleet’s trading efficiency and asset utilization, thus gaining a strong foot-hold in strategic sectors and segments. In comparison to 2015, this year’s overall operational and business results were impacted by a global volume and freight rate decline across all major markets. However, in comparison to the competition Bahri’s results were far better. This segment of the industry suffered an average drop in earnings of about 20%, whereas, Bahri Chemicals performance for 2016 was only lower by 11% in comparison to 2015. However, due to its long- term strategy of fleet employment diversification, Bahri absorbed the market correction better than its industry peers. In response to the markets’ downturn, Bahri implemented cost savings initiatives that included the implemention of a major dry docking program to improve its vessels operational efficiency, in addition to fleet-wide fuel saving initiative, which will contribute to minimizing long- term operating costs. This increased its vessels operational efficiency and broadened its access to alternative cargoes. Moreover, Bahri Chemicals built strategic long-termpartnerships with producers and traders in the Far East, South East Asia, Europe and North America. This expansion will provide stability through the cyclical downturns and has helped it to diversify into strategic sectors, such as, clean petroleum products and vegetable oil. This helped Bahri to improve its vessels business efficiency and better asset utilization. All of whichwill contribute to stronger positioning capture a greater slice of global commercial opportunities.
Bahri Chemical’s operations involves the shipping and logistics handling of liquid bulk chemicals, clean petroleum products and vegetable oils. From the middle of 2016, Bahri Chemicals’ business was affected by the increasing crude oil price, which directly impacted costs and led to increased bunker prices. Moreover, the slowdown of the Chinese economy, negatively contributed to Bahri’s operations, however, signs of stabilization towards the end of the year, helped Bahri avoid a hard landing. Moreover, a significant increase in tonnage supply, coupled with severely reduced freight rate volatility and related product movement, adversely impacted all markets during 2016. The clean petroleum and vegetable oil segments, known for their reactive supply and demand dynamics, were most affected by the downturn. As one of the world’s largest owner and operator of MR IMO2 chemical tankers, Bahri Chemicals’ increased scale allowed for geographical diversification and improved efficiency. Historically, Bahri had a relatively limited geographical scope with a focus on medium range tankers. However, with more ships joining its fleet, its global footprint is expected to expand. Going forward Bahri will diversify into other types and sizes of ships servicing its customers’ needs. On the other hand, Bahri Chemicals entered new global trade routes and partnerships, which included the Far East, South East Asia, continental Europe and North America. This allowed it to diversify its operations into strategic segments, such as clean petroleum products and vegetable oils. This in turn, helped
Bahri Chemicals
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