with Christopher Phillips, Director, Seatech Projects & Shipping
Established in 2007, Seatech has grown substantially within four years of its inception. What would be your first assessment of Seatech’s development and growth in India?
During the last four years, we have been aggressive in the market despite of being a very young team. We have a good combination of both young and experienced professionals.
There is a lot of potential in the shipping industry in India, especially on the East coast belt which is really rich in minerals. In the light of a few power companies increasing their activities in the region, there are a lot of project movements on this belt. Even Mumbai has specialized in project cargoes.
Simultaneously, in the West, some of the states – especially Gujarat – have experienced a lot of industrial growth over the last decade.
This is how we have been able to grow from Mumbai. We started our operations at the right place, considering that Mumbai is the financial capital of India, and we have been able to grow extensively from here, branching out into other metropolitan cities of India, and spreading out our offices on the East and West coasts of India.
We started in 2007 with a small office and we saw the branching out as a necessity since we could not support all the agents from the Mumbai office. We now have offices in Chennai, Pune, Jaipur, Bangalore, Kandla, Krishanapatnam, Kolkata, Delhi, and Vadodara. This strategy has paid back.
Seatech’s business is based on a combination of project cargoes and port agency services. The ships that come into the country help us in promoting project cargoes rather aggressively.
The infrastructure in India has drastically increased over the last five years, which has opened up a lot of opportunities for us. For instance, we executed a project for the oil and gas (O&G) industry for a project cargo in Chittagong. The cargo was 200 CBM but the ship needed to have a short transit time.
We have also carried out projects for many of the new ports that have come up on the east coast belt. On the Krishnapatnam coast for instance, which is around 30 nautical miles from Chennai, the port has a move around of about 15 cranes from Antwerp.
We have moved a lot of port equipments as well. We have catered to a lot of international freight forwarders who have establishments in India. As a result, we are very strong with chartering with ships along with having port agencies so it really is a combination of the two.
The company was promoted at a delicate time considering the sharp contraction in world trade and the dropping in shipping rates the two years after inception. How have you been able to absorb the crisis and make your mark in this market?
When we started in 2007, the international market was just starting to drop but collectively India still had demand and there were opportunities available. So while the international markets were facing a crisis, India was still at a point of growth and that helped us maintain our business to a great extent. A lot of import shipments and the overall Gross Domestic Product (GDP) growth in India has been consistent over the past 5 years, from 7 to 7.5%.
Seatech’s main activity is ship chartering and ship broking. As the world economy picks up again, the pressure on margins as an intermediary between ship owners and cargo undergoes less pressure. How has the market place behaved in this sector of activity in 2011?
The market is very competitive and India is immensely price sensitive. Everyone wants good prices but at the same time, if low prices affect the transit time and if companies have to deal with incompetence, caution will creep in.
One of our prime concerns has been piracy – it has been an important issue worldwide, lately. The ships were not paying for armed guards. However, after several incidents, people have begun to invest – I recently dealt with an individual who invested $50,000 for security on board, despite having been wary for a long time on the idea of the necessity of having security on board.
There is price sensitivity in India, but awareness has crept in so there is positive movement.
Seatech’s extensive network and key strategic locations on the east, west and south, and in the hinterland enables the company to direct cargo movement to the open sea. As a manager, what are the challenges in operating in such a massive country, in terms of logistics and allocation of resources?
Indeed, it is very challenging to operate in India given the size of the country, and that is why we had to branch out. We focused on operating from Mumbai and that was not very effective so after branching out and advertising extensively, we have established a significant network.
India is a massive market so operating from the specific locations is the best option for us.
Amongst Seatech’s numerous projects, what have been the most challenging assignments?
Some of the most challenging ones have been during the monsoons since the bigger projects are year long. Among them, we have handled one for one of our associates Combi Lift, based in Denmark. They bought some import cargoes for Essar for a terminal in Gujarat and these had to be discharged in the anchorage. In the rough seas, in the monsoons, executing this project along with our team of experts was very tough.
There are U.N. project cargoes as well, which are time bound and are equally tough – if not more – along with the ones for the O&G industry. Since we know the routes and operations, we feel like we have an edge.
Seatech represents ship-owners/principals at ports offering chartering, clearing and forwarding for all types of cargoes for both import and export. In O&G, the country is importing two thirds of crude oil and exporting downstream 40% of its refined production of oil, mostly through shipping. What are the implications for Seatech?
We are a young establishment; therefore we have to be aggressive with our approach and look into every opportunity that comes our way. We work with Bertling, DHL, Panalpina, and many others. We have support from multinationals and there are a lot of projects coming up so it is a combination of all these aspects that will drive our business forward. We have handled many ships for O&G and we are thinking big at the moment.
One of the Seatech offices is situated in Kakinada. What is the scope of operations there?
Reliance is quite aggressive and active over there. They are importing a lot of missionary, and we are handling a ship called Padmini. 6 heavy modules of about 156 tons each are to be discharged and we are handling the agencies and the receivers are Reliance.
As a new comer to the market but as an Indian dynamic company, how challenging was it to establish strong relationships with the PSUs, dominating the O&G market, whether it is in shipping of across the O&G value chain?
Dealing with PSUs in general is tougher, but we are slowly and steadily working into it with our sales and marketing teams of specialists.
Seatech looks today at the Middle East and Eastern African regions for its future development. What are the next steps in Seatech’s expansion both in India and abroad?
We have created a strong presence in India but we still need to set up more offices. We are also planning to open an office in Shanghai considering there are a lot of logistical movements in China.
Today, I believe that China, Singapore and Dubai would be the right steps forward. Therefore they will be the next steps ahead in our expansion plans. I believe it is too soon to think of areas like Brazil.
We are currently focusing on geographical areas that are close to India. Essar, for instance, has imported its materials from China and most of the east coast belts’ materials come from China as well. Of course there is Europe as well, but most of the materials come from China and for us this country makes good sense as the next step ahead.
If we give you the same period for development again and come back in four years from today, where will we see Seatech?
You will certainly see us as an internationally recognized organization. In addition, we intend to back more O&G projects which we are trying to get on panel, especially with PSUs, and we hope to get on board with this over the next four years.