The Azerbaijan Caspian Shipping CJSC (ACSC) opened its first-ever shipping management office outside of Azerbaijan earlier this year in İstanbul. Being the company’s first office abroad, the İstanbul bureau works in close contact with their headquarters in Baku and marks the first in a number of prospective steps the company is planning on taking over in the future in the name of further expanding their business internationally. ACSC has already transferred some of their fleet’s operations here, and it seems they will be creating more business opportunities for Turkish shipyards.
Capt. Titos Giannakakis LL.M., MNI, advisor to chairman of ACSC, was recently in İstanbul, where he sat down with Marine Deal News for an interview, during which he spoke about major facts for his company and very broadly about their plans for the foreseeable future.
n Could you please tell us a bit about your company, your new office in İstanbul and their operations?
The company has a long history in the marine transport [sector], because since the middle of the 1900s we’ve been operating internationally but later on most of the fleet was trading within Caspian Sea. After 2013, with the merger of both the offshore fleet and the marine fleet, there became one company called the Azerbaijan Caspian Shipping CJSC.
As the İstanbul office, we’re under the umbrella of the head office in Baku. ACSC does not only operate ships; we have other responsibilities. Normally private shipping companies [are involved in] the shipping sector, by operating ships, and that’s all. Whereas ACSC, as a state-owned company, have expanded into different fields. We’re not only managing vessels but we also have our own marine academy and training center for seafarers. After seafarers graduate from the academy, and complete some sea-going time then they have to take trainings in accordance with IMO STCW in ACSC’s training center. We have modern technology equipment in our training center, like dynamic position (DP) simulator for offshore vessels. […] which is another key sector of our company’s activities
As previously mentioned in 2013, the government decided to merge the offshore fleet with our marine transport fleet, so we currently operate two fleets: an offshore fleet of vessels for offshore operations — such as offshore supply vessels, platform supply vessels, crane vessels, etc. — and also a marine transport fleet, which operates mainly in the Caspian Sea. But now we’ve also started operations outside of the Caspian Sea through the İstanbul office, trading ships mainly in Black Sea and the Mediterranean and later on in Europe too. So this our immediate plan and hope we’ll be able to implement it so that we can expand further.
Our shipping company, in both offshore and marine transport fields, all in all operates about 300 vessels, engaged in both marine transport and offshore sectors.
Our Caspian Sea operated fleet also supports key projects we have with BP, for BP has a big investment [in the region], SOCAR, SAIPEM just to name a few. Now we’re making this move to the İstanbul office with 10 dry cargo ships and one tanker, under CASPDRY & CASPTANKERS management but we’re expecting two more vessels coming up by the beginning of November: one more dry cargo ship and one more tanker. I am personally more oriented towards the tanker field though, because this market does not have significant fluctuations like the dry-cargo market.
Having all these under one umbrella, the Chairman of ACSC, Mr. Rauf Valiyev, has a lot of sectors [on his focus] and different responsibilities: being in charge and leading all our fleets, new-building projects, the shipping company offices, the marine academy, and the training center.
So, being a state-owned company, we also have a responsibility towards our own people; we hire personnel with a view to help them expand and grow together with our shipping company, not just building ships in shipyards, but [we] also help our people develop, become more competent & experienced on international trade and this was one of our goals when we [opened] our office here in İstanbul.
n How many personnel does your company have and how many people work in your İstanbul office?
ACSC altogether has an approximate number of close to 9,000 personnel. At the moment we have about 5,000 seafarers [working on] our 300-vessels.
The personnel we have in the İstanbul office are Turkish nationals, and I get along very nicely with all of them. Shipping doesn’t have any boundaries or ethnic / nationality characteristics. Marine transportation is global, whether you’re based in Singapore, Turkey, Greece, Italy, Hong Kong, London, United States, Russia or China, it is international trading, and this is what we’re trying to do now — to trade beyond the limits of Caspian Sea.
I think it is also good for Turkey, that ACSC started an office here because we employ Turkish nationals. Few at the beginning, maybe more later on, but this is also a kind of investment. I think İstanbul holds a strategic position for our international fleet and we value this very much.
– Are the two upcoming vessels for your İstanbul fleet newbuilds?
The dry cargo ship is fairly new but not a new-construction, whereas the tanker is. It was just launched last June from Krasnoye Sormovo shipyard in Russia. We are also closely related with SOCAR, as you know, and Baku Shipyard, which has the capacity to build offshore and marine transport vessels. In fact, two of our tankers that may join our international fleet are currently under construction in Baku shipyard, due for delivery in 2019.
n Could you please elaborate on your company’s plans for expansion?
I think it’s really nice to have an office here so that through the Istanbul office we can move ahead with new projects & opportunities. As I said, we operate from Istanbul 11 vessels now but in the future we have plans to expand. The fleet operated from İstanbul, will increase and hopefully in a few years we’ll be able to deal equally well with our competitors and other regional based operating companies. This will take some time, but we just started.
– How many ships will the fleet comprise in the future?
Our fleet managed by Istanbul office consists of small size vessels, about 7,000 gross tons that do regional and coastal trading. In the future, we may have another office elsewhere as well, in a different location. In addition, we have plans to get under our management bigger size ships. The international market of shipping is doing average at the moment, not extremely good, not extremely bad and with the oil prices in the future that may rise slowly but steadily, up to a certain point, this can help, because we have to consider that marine transport fleets are useful all over the world, by trading commodities, including oil which cannot be carried entirely through pipelines or other means of transport such as trains and airplanes. Marine transport fleets world-wide carry about 80 percent of the international trade. The rest 20 percent is carried by airplanes, trains, etc. So still the international maritime fleet will serve its purpose despite market fluctuations.
– Will the new fleet be newbuilds?
Yes, there will be newbuilds. The ships that will be acquired for management by İstanbul office in the future, I believe, will be newly constructed ships.
– Will you order from Turkish shipyards?
This is one of our plans. We also have plans for some of the ships to be built in Turkey, or other locations, but we have our own shipyard in Baku and there is the know-how and the capacity in our Baku shipyard to build vessels of various sizes and tonnages but I don’t want to get into such details now. Of course, we may also need to build locally in order to expedite the process and to support local interests, because my company has close ties with Turkey. So yes, this is one of our goals.
All 11 vessels managed by our İstanbul office, are repaired and dry-docked in Turkey. Right now we have one of our vessels in Tuzla ship-repair facilities. We had three vessels back to back in Tuzla shipyards, so this is another benefit for Turkey. For us it’s time consuming to take a ship from here back to the Caspian Sea for repairs. [When our] vessels need repair or be retrofitted with new equipment, all this is taking place here and believe me it’s a lot of money involved, so this is another benefit for the local economy.
– Have you decided which shipyards to work within İstanbul for the newbuilds?
I’ve been to Tuzla, to various shipyards there, and we’ve made our selection on the basis of quality of service, consistency and punctuality.
LNG technology is important for ACSC
n What do you think about the future of the increasingly popular LNG fuel systems in the maritime industry? We know that in accordance with IMO regulations, emissions must have to be pulled down to 0.1 percent by the year 2020. So will the ACSC also take part in this transformation?
MARPOL is set up by IMO and is the international convention for maritime ships with specific regulations concerning the protection of the environment and the protection of the sea. All vessels, whether they’re trading coastally or internationally, or locally, must comply with these regulations and they are inspected by authorities such as port state controls, classification societies. New vessels, of course, have new technology, for controlling their emissions, because the international regulations for the protection of the environment for marine vessels does not cover only waste water discharges but also air emissions. Although globally there are about 75,000 ships altogether trading internationally, employing about 1,8 million seafarers, the shipping sector as a whole affects only 20 percent of the environment. Most of the bad effect that goes to global emissions, the greenhouse effect, comes from other sources. The most stringent regulations for the protection of the environment are now applicable in the United States.
– But the regulations will expand by 2020, right?
Right now there are regulations concerning sulphur limit contents as well as requirements for new technology. LNG carriers, for example, have the option of using part of their cargo as fuel, which is natural gas, so in this way very little air emissions are produced. And its clean technology. But also the rest of the ships, new or old, they would have eventually to retrofit new technology equipment and follow applicable regulations. Even if there’s a deadline, let’s say, up to 2020 for all vessels to comply, normally there is some grace period, because not all vessels have the same technology. And there are not enough shipyards to accommodate all ships and this cannot be done in one day, it takes time. So yes, of course LNG technology is something that we are concerned because Azerbaijan Republic is a natural gas producer, so this is important for us.
– So how do you see the future of the LNG technology? Is it going to transform the entire marine sector, in let’s say the next 10-20 years?
Definitely this is very important. Shipping and marine transport ships will take some time to adjust to all these changes. For example, there is now a new convention by IMO put in force since Sept. 17, of this year, the ballast water management convention, which requires treatment systems for most ships trading internationally, but as I said for any new technology, even after the implementation of the new regulations there is some grace period for vessels to be able to adjust to such changes.