Saudi Shipping focuses on maritime academies

As the CEO of one of the world’s largest shipping companies Humoud Abdulaziz Al Ajlan is well aware of the need to invest in the future.

Since he took the helm of the National Shipping Company of Saudi Arabia (NSCSA) in 2006 he has overseen the company’s continued expansion and diversification with investments of eight billion Saudi Riyals ($2bn) in the past four years.

The NSCSA was established in 1979 and has transformed itself from a transporter of general cargo and containers to a heavyweight carrier of crude oil, chemical and LPG (liquefied petroleum gas) as well as specialised ship management.

“Today we have 14 VLCC’s (very large crude carriers) and we have three due for delivery in the next three months so we will reach 17 and each one has a capacity to carry two million barrels,” Al Ajlan told Arroya.com.

“We also have 14 chemical tankers that are due for delivery in next three years.”

These new ships are being built in Korea and Al Ajlan said the company was very only deals with the class A shipyards.

As well as maritime investment from NSCSA there is also government investment in new ports which Al Ajlan believes is essential for the industry to move forward.

“As a country we are trying to develop the capacity for our ships in different locations such as King Abdullah Economic City on the Red Sea, which will really have a major impact,” he said.

“It will change the whole concept of doing business and become a new environment for shipping.”

In 2005 NSCSA acquired a 30 per cent stake in LPG-company Petrodec and continues to make partnerships across the globe for its commodities.

“We believe the shipping industry is globalised and is not to be looked at locally and we had different strategy over the years we would like to develop and we different sectors and focusing on the oil and chemicals and with international companies,” added Al Ajlan.

NSCSA’s net profits for 2007, published in annual report in July 2008, were SR4.3bn ($1.1bn) and Al Ajlan said he expects a significant rise when the 2008 figures are released later this year despite the downturn.

“Once the economy is fixed things will recover quickly: shipping always has these cycles which carry with them positive and negatives.

“But we are diversifying with oil transportation, chemical transportation and general cargo thus improving our overall profitability.”

Al Ajlan said any plans Saudi Arabia had to invest in shipbuilding were still as long way off and for now company’s such as NSCSA would be focusing more on maritime academies.

“I think the time is not now and we need time as shipbuilding is really labour intensive and we have enough with to deal with in other industries,” he added.

“So as long as we can outsource it in an economical way in other parts of the world we will.

“In terms of seafarers, however, we are very low in that department with just five per cent Saudi nationals in our company and we are very supportive in establishing maritime academies.”

One area that also keeps Al Ajlan and his colleagues busy is security, with the Gulf of Aden and the waters off the Somali coast prone to pirate attacks.

Last year Saudi Aramco’s Sirrus Star became the world’s largest ship to be taken hostage by pirates while it was carrying an estimated cargo of $10m worth of oil.

“The situation is really alarming and a lot of arrangements have been set up to protect trading in the Gulf of Aden to ensure that ships are safe,” added Al Ajlan.

“Now we are organising the ships into conveys to pass at a certain time and it is this is being constantly monitored by international organisations.”