• SELECT SITE CURRENCY
Select a currency for use throughout the site
Croatia Shipping Report Q3 2012
Business Monitor International, June 2012, Pages: 128
The Croatia Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's shipping industry.
Tough On The Short Term, But Box Traffic Will Hold Up Croatia's new coalition government is sticking to its promise of fiscal austerity, and the intensifying economic headwinds from the European Union - which the country aims to join in 2013 - remain another serious obstacle to short term growth. This has led us to reaffirm our forecast of a 1.5% GDP contraction in 2012. And while in our last quarterly report we took this as a downside risk to our projections of moderate growth in the ports and shipping sector, we have now been moved to cut those projections quite significantly. So while three months ago we were expecting 1.3% growth in total tonnage handled at the Port of Rijeka, we are now projecting a fall of almost 10%. Container movements, we believe, will remain positive, at 3.7%. We see a similar pattern at the Port of Ploce, where tonnage will fall by just under 26%, while box traffic will see growth of 2.5%.
The environment is not all gloom. A number of industry-specific factors are aiding the country's ports and may well become stronger on the medium term. They include new investment in container terminals; continued interest in Rijeka in particular as a possible 'gateway' port leading into the Balkans and Europe, and, related to this last point, the possibility of significant Chinese investment. Despite the ongoing troubles of the Eurozone, Croatian accession, likely in 2013, will also attract welcome investment interest in the energy and transport infrastructure sectors.
Headline Industry Data
- 2012 Port of Rijeka tonnage throughput forecast to fall 9.6%. Over the mid-term we project an average annual contraction of 0.6%.
- 2012 Port of Rijeka container throughput forecast to grow 3.7%. Over the mid-term we project a moderate-to-good average annual increase of 3.5%, ahead of GDP.
- 2012 total trade growth forecast at -2.8% (a steeper fall than the -2.4% we had predicted in our last report).
Key Industry Trends Rijeka Port Announces Q1 Profit Rijeka Port said it had made a profit of HRK2.55mn (US$445,800) in the first quarter, a 298% increase on the comparable year-earlier number. Revenues grew on the back of stronger foreign sales - up by 46%, while domestic sales grew by 27%. Total costs grew by 7% on year-ago levels to reach HRK45.4mn. At the Port of Luka Ploce, however, consolidated net profit slumped by 89.7% to HRK455,300 (US$80,220), down from HRK4.44mn in the first quarter of 2011. The fall in operating income during the quarter was caused by a drop in bulk cargo transport due to difficulties experienced by major customers in Bosnia and Italy, the port operator said.
China Considering Investment in Balkan Ports Chinese investors are reported to be interested in Croatia's port of Rijeka and Bulgaria's port of Varna. China's COSCO, which includes container terminal operator COSCO Pacific as one of its subsidiaries, has stated that it is interested in investing in the Port of Rijeka and has discussed this with Croatia's Prime Minister Zoran Milanovic. China's investors have also shown interest in Bulgaria's Port of Varna, with China's ambassador to Bulgaria Guo Yezhou stating after a meeting with Varna's mayor Kiril Yordanov that Chinese companies could participate in the concession of the Port of Varna. BMI believes that China's interest in Balkan ports stems from a desire to gain routes of entry into Europe. This aim is highlighted by the fact that COSCO is not only interested in operating at the Port of Rijeka, but has also announced that it would be interested in developing a railway link between the port, the Croatian capital of Zagreb and the Hungarian border.
New Container Terminal for Rijeka A consortium of Italian companies and Croatia's Osijek Koteks have signed a EUR70.5mn (US$91.4mn) contract with the Rijeka Port Authority to design and build a new container terminal at the Zagreb pier.
The new terminal will be able to accommodate the largest containerships, while a sea depth of 20 metres (m) alongside will allow the berthing of the newest generation of vessels. The first phase, scheduled to be completed by 2017, will see the construction of a 400m long pier that will be extended to 680m in the second phase. Financial support for the first phase will be provided by the World Bank, while the second phase is likely to be funded through private investment.
Risks To Outlook An intensification of the eurozone financial crisis remains the single most substantial downside risk to our Croatia ports and shipping industry forecasts. At the time of writing this is presenting itself as a medium probability threat, given the potential ramifications of a Greek withdrawal from the single currency agreement. Although Croatia is not (yet) a member of the European Union or of the eurozone currency agreement, it remains highly dependent on the health of the wider European economy, far and away its most important trading partner. Therefore we are particularly concerned about the negative knock-on effect on Croatian exports, coupled with lower domestic demand caused, among other things, by a contraction of the tourism industry. High oil prices are another risk factor, in two senses: by reducing domestic demand, on the one hand, and by impacting the profitability of shipping lines, on the other.
Executive Summary 5
SWOT Analysis 7
Croatia Shipping SWOT 7
Croatia Political SWOT 8
Croatia Economic SWOT 8
Croatia Business Environment SWOT 9
Global Overview – Container Shipping 10
Executive Summary: Rate Decline Risk, Threat Of Another Year Of Losses 10
Slowing Demand A Major Threat To Freight Rates 11
Carriers Thinking Outside Box On Overcapacity, Can Rate War Be Avoided? 17
Lines Must Tackle High Bunker Prices To Avoid Impact On 2012 Bottom Line 22
Evergreen's Order Raises Questions For Future Of Box Fleet Expansions 25
Global Overview – Dry Bulk Shipping 31
Executive Summary: Rates Struggling To Recover From 25-Year Low 31
Bleak Demand Outlook Gives Cause For Concern 32
Lines Withhold Payments As Shipping Struggles In Depressed Market 34
Vale's Valemax Woes Continue, Vessel Values And Demand Plunging 36
Orders Continue As Lines Take Advantage Of Bargain Basement Prices 41
Record Dry Bulk Scrapping Levels No Match For Global Fleet 43
Global Overview – Liquid Bulk Shipping 45
Executive Summary: Bearish View Maintained Despite Industry Optimism 45
Will Increased Asian Crude Imports Offset Excess Tonnage? 46
More Pain For US Tanker Operators Despite Investor Confidence 50
2012 Political Impact On Crude Oil Shipping Emanating From Iran 52
Tanker Operators Scrap In Desperate Attempt To Shore Up Rates 56
Tanker Pools To Grow As Operators Seek Safety In Numbers 58
Industry Trends And Developments 60
Croatia Container Shipping Market Overview 63
Industry Forecast 71
Table: Major Port Data, 2009-2016 73
Table: Trade Overview, 2009-2016 73
Table: Key Trade Indicators, 2009-2016 74
Table: Main Import Partners 75
Table: Main Export Partners 75
Company Profiles 76
Maersk Line 76
Mediterranean Shipping Company (MSC) 82
CMA CGM 86
COSCO Container Lines Company Limited (COSCON) 91
Evergreen Line 00
China Shipping Container Line (CSCL) 10
Hanjin Shipping (Container Operations) 15
Mitsui OSK Lines (MOL) (Container) 19
Demographic Outlook 124
Table: Croatia's Population By Age Group, 1990-2020 ('000) 25
Table: Croatia's Population By Age Group, 1990-2020 (% of total) 26
Table: Croatia's Key Population Ratios, 1990-2020 27
Table: Croatia's Rural And Urban Population, 1990-2020 27