The National Shipping Company of Saudi Arabia (NSCSA) recently joined hands with Petredec Limited, a Bermuda based LPG trader and shipowner that has a controlled fleet of 53 vessels delivered and on order (including two VLGCs), by acquiring 30.3 per cent shareholding with an investment of $50 million.

This transaction represents a number of firsts for NSCSA, including the company's first share acquisition of an existing shipping company, first venture into the gas trade and also its first major investment outside the GCC region. Further, the investment fulfils and fits perfectly with NSCSA's long-term strategy of strengthening international alliances and diversifying the company's portfolio, thus fulfilling its growth ambitions.
It is also noteworthy to mention that the strong crude oil and petrochemicals transportation market in Q4 2004 boosted annual profit figures of NSCSA, which in turn posted a net earning of SR427.8m ($114.08m) in the year 2004, as compared with SR155.6m the year before -- a 277 per cent increase. NSCSA's recently declared result of first-half 2005 also showed a better performance, achieving a profit of SR231.1m compared to SR189m for the same period of last year.
NSCSA has fully paid up capital of SR2 billion, 28.2 per cent of which is owned by the Saudi government and the remaining by leading Saudi businessmen and citizens.
NSCSA now owns a fleet of 11 VLCCs (which include two on order), 22 petrochemical tankers (including 10 under construction) and 4 multipurpose RoRo vessels. NSCSA started its activities with two Container/RoRo vessels in 1980. In 1985, it diversified its activities into petrochemical transportation. During 1995-1996 the company entered into crude oil transportation. In 1997, it established its own Ship Management Company in Dubai and a Container Services Yard at Jeddah.
In 2002, NSCSA further expanded its activities into Freight Forwarding / NVOCCs business and is making rapid strides since then. NSCSA has been playing a vital role in the transportation of project cargoes contributing to the regions' infrastructure development and related requirement of specialist cargo transportation for oilfields, petrochemical and construction industries.
Crude oil
During 1996-1997, NSCSA entered into crude oil transportation by taking delivery of 5 new double-hull VLCCs from Mitsubishi Heavy Industries of Japan. Another 4 double-hulled VLCCs were acquired in 2001-2002 built by Samsung Heavy Industries of Korea. With the 9 VLCCs having an aggregate carrying capacity of about 19 million barrels and a dead-weight of over 300,000 tonnes each and with state-of-the-art technology, NSCSA has joined the elite group of companies engaged in the crude oil transportation and have signed contracts for time-charter and spot charter markets with Vela International (a subsidiary of Saudi Aramco), ChevronTexaco, Shell, ExxonMobil, Tankers International etc.
In October 2004, NSCSA and Hyundai Heavy Industries signed a contract for building two Very Large Crude Carriers (VLCCs) of 318,000 dwt each. Delivery is scheduled within the Q3 of 2007. Thus, NSCSA now owns a fleet of 11 Very Large Crude Carries. With the delivery of the new vessels, the carrying capacity will be increased to about 23 million barrels.
Petrochemicals
In 1985, NSCSA acquired 'Uqba Ibn Nafe,' 43,000 dwt tanker. A year later in 1986, NSCSA and United Arab Shipping Company (UASC) of Kuwait jointly established Arabian Chemical Carriers (ACC) with 50:50 participation by acquiring 44,400 dwt chemical product tanker 'Al Farabi.'
In 1990, looking to the increasing trend in the petrochemicals export business, NSCSA started a subsidiary company, The National Chemical Carriers Ltd Co (NCC), as a limited liability company with a capital of SR500 million, jointly owned by Sabic with 80:20 stake. The company is operating its existing fleet of 10 tankers specialised in transporting petrochemicals and acids with a total dwt capacity of 300,000 tonnes through cooperation with the Norwegian company Odfjell Seachem. NCC, as a result of the company's strategy to reinforce its position in the chemicals transportation industry, entered into a deal with Hyundai Mipo Dockyard of South Korea and placed orders for constructing a total of 10 ships (six ordered in 2003 and four in 2004) with a combined tonnage of 462,000 tonnes and a total value of $364 million. Each vessel will have 46,200 tonnes dwt, with a 54,300 cu m capacity and also have 22 cargo tanks, fully segregated and a speed of 15 knots. The 2003 order of six ships were chartered out in the same year to Sabic under long-term agreement. Deliveries start from the end of 2005 to early 2008. These new orders were part of the company's fleet renewal and expansion programme.
Liner service
NSCSA is presently operating its Liner Service with the 4 Ro-Ro Multipurpose vessels between AG - Indian Sub-Continent - Red Sea - Mediterranean - US/Canada (East Coast) - US (Gulf) ports with 21 days' frequency. The versatility of the vessels makes them highly suitable for serving the trade, catering to RoRo, Breakbulk, Projects, Military and containerised cargoes.
NSCSA, through its global freight forwarding and NVOCC business, serves the customers with logistical and distribution network that include packaging, warehousing/storage, ocean/land transportation, documentation and custom clearance. With sophisticated information technology and office automation, own container yard, a fleet of owned containers as well as own offices and agencies worldwide, NSCSA is well poised to meet its commitments besides offering a reliable and cost effective service to its customers.
The container services yard, with an area of (120,000 sq m) in Jeddah Islamic Port is rendering excellent services to customers offering minimum loading, handling and operational costs for import-export units. A specialised workshop in the yard undertakes repair and refurbishing of containers according to international standards.
Technical management
NSCSA, in the year 1997, established Mideast Ship Management Limited (Mideast), a ship management company of its own in Dubai. The vision was to have professionally qualified ship manager who would fulfill the requirements of the ship owners. Mideast is managing 20 vessels at the moment, which include chemical tankers and crude oil carriers. Mideast has implemented a strategy to achieve its goal. Its functions cover 'one-stop-shop' requirement to offer its clients. Mideast Quality Management System (QMS) is accredited to the standard of ISO-9002, ISM, and SEP by DNV and Lloyds.
Last but not least
With the demand for crude oil and petrochemicals expected to be strong and the prediction of industry to be one of continuous growth, NSCSA has achieved tremendous progress during 2004 and expects to achieve further development in this sector in the coming years.
With the liner shipping front experiencing a strong market growth supported by steady increase in freight rates, NSCSA foresees continuous demand for specialised RoRo / Container vessels due to industrialisation and ever-expanding infrastructure development activities in the Middle East. With this background as well as the strong foothold established on the oil, petrochemical and liner sectors, plans to revamp and expand its activities will be a matter for future interest.