Located strategically at the convergence of key shipping routes along the Straits of Johor, Singapore has, since 1819, served as a transshipment hub, facilitating trade around the world. Playing a vital role in this cornerstone industry are marine logistics companies that facilitate the movement of resources to Singapore and other regions.
One such company is Marco Polo Marine (SGX Code: 5LY), established in 1991. It is an integrated marine logistics company that has been listed on the mainboard of the Singapore Exchange (SGX) since February 2009. Having weathered the oil and gas (O&G) 2017 crisis, it has expanded its client base beyond the O&G sector by becoming one of the few shipping players to support offshore wind farm projects in Taiwan.
With the rise in demand for commodities, especially fossil fuels and renewable energy, ship chartering services offered by Marco Polo Marine may well be sought-after. Here are 5 things to know about Marco Polo Marine if you’re interested in oil and gas businesses.
Marco Polo Marine is a Shipyard and Shipping service provider, could you elaborate on the products/services that you provide for clients?
Marco Polo Marine operates two main business segments:
Shipyard – the shipyard provides shipbuilding, ship maintenance, repair, outfitting, and conversion services for shipping vessels. Located in Batam, Indonesia, it features three dry docks and occupies 34 hectares of land, with a seafront spanning 650 metres. This makes it capable of accommodating various vessel requirements.
Marco Polo Marine’s Shipyard in Batam, Indonesia
Ship Chartering – the offshore division oversees a fleet of 14 OSVs, which includes two Maintenance Working vessels (MWV) and 9.5 sets (19 vessels) of Tugs and Barges. The OSVs are primarily chartered by companies in the Oil & Gas (O&G) and renewables sectors, particularly for offshore wind farms. The Tug and Barge division supports the construction sector, providing transportation services for aggregate materials to Singapore.
Marco Polo Marine’s Ship Chartering Segment
What are some of the Group’s potential catalysts that investors can be excited about in the near term of 1 to 2 years?
Addition of CSOV to the fleet – The new CSOV will give us a first-mover advantage in the North Asia region to service the high-growth offshore wind farm market through our Taiwan subsidiary PKRO and is expected to contribute strongly to the company’s top and bottom line from FY2024 onwards.
Expansion into Japanese and South Korean Offshore Wind Farm Markets – The strategic partnerships with KWS in Japan and Namsung and HA-E in South Korea provide us with access to both the Japanese and South Korean offshore wind farm markets. These partnerships will expand our presence in the APAC offshore wind sector, allowing us to potentially capture a portion of these two significantly large markets.
Sustainability and ESG have increasingly been a key focus, how is Marco Polo Marine committed towards sustainability?
We have actively kept pace with emerging technologies aimed at addressing climate change, environmental protection and sustainable resource management while maintaining economic feasibility. We have also participated in government programs and initiatives promoting sustainable businesses.
Recycling Efforts – the Group adopts a responsible approach to recycling non-renewable materials like steel and copper in our operations. These materials are sold to recycling mills as part of our commitment to reducing environmental strain and supporting The Sustainable Singapore Blue 2015 initiative.
Reduced Energy Consumption – over the past three years, we have successfully reduced energy consumption by adopting inverter technology in welding sets and graving dock pumps at our shipyard. Additionally, we have fully transitioned from fluorescent and mercury lights to energy-efficient LED lights for general lighting purposes.
Improving Shared Air Quality – to reduce sulphur dioxide emissions, we have taken measures to ensure compliance with International Organisation for Standardisation (ISO) 8127:2017, which sets the fuel standards for marine distillate fuels. The company ensures that its vessels use marine gas oil with a sulphur content not exceeding the maximum limit specified by the ISO standard and the relevant provisions of the International Convention for the Prevention of Pollution from Ships (MARPOL).
Interest rates are expected to stay elevated for the next two years. What impact does this have on the Group’s businesses and how is it managing this risk?
We currently have close to zero debt on the balance sheet, so that is not a risk at this juncture. However, considering our current expansion plans, we will be very mindful not to overstretch ourselves if we need to take on some debt, which may be inevitable at some point in time.
Read Also: 5 Things To Know About Kim Heng Limited (SGX: 5G2), Transiting From Marine & Offshore To Renewables
Could you elaborate on the future direction for the Group’s various business segments?
Shipyard – The Group has been stepping up marketing efforts to actively engage regional ship owners in Indonesia to secure more shipbuilding projects. We are also expanding our international customer base for ship repair and maintenance. To date, we have secured several new build contracts for the construction of vessels, with deliveries scheduled up until 1HFY2024.
Ship Chartering – We will continue to support the Taiwan offshore wind farm market through our subsidiary, PKRO. We are currently constructing our own CSOV, which will be integrated into our fleet around 3QFY2024. This addition will significantly enhance our capabilities to effectively meet the unique requirements of the offshore wind farm industry.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 16 August 2023 and have been republished with permission. You can read more on Marco Polo Marine (SGX Code: 5LY) on the SGX website.
The post 5 Things To Know About Marco Polo Marine (SGX Code: 5LY), The Company That Transports Aggregate Materials Supporting Singapore’s Construction Sector appeared first on DollarsAndSense.sg.
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