Grindrod splashes out R1.8bn on expanding fleet

TERRY HUTSON IN YET another big week, high-flying Grindrod announced it was spending close to US $300m (R1.8bn) to effectively double the size of the Unicorn fleet. On top of that another three ships have been added to the Island View Shipping (IVS) fleet, bringing the total number of vessels owned or chartered to about a hundred. Ivan Clark, Grindrod’s MD, said that the 605-TEU Ocean Africa Container Lines (OACL) vessel Range, which was under charter to OACL, had been purchased for US $7m while four new 12 800-dwt oil/chemical tankers had been ordered for $72m. In addition a 32 000-dwt handysize bulk carrier in which Grindrod held a 50% share had been acquired at a cost of $10m. “This follows a $200m order for seven newbuilding products tankers and will see Grindrod with a substantial fleet by the end of 2007. These ships have been ordered or purchased at competitive prices and with the strong rand are good buys in rand terms, although some have been financed in US dollars. These will add further to our stated policy of creating sustainability and growth going into the future,” he said. “When we ordered the 37,000-dwt products tankers, average daily earnings on the spot market were around US $14,000 per day. The current daily rates are in the region of $25,000 per day and even time charter rates are now at similar levels.” IVS has already taken delivery of the 32,000-dwt bulker The Durban Bulker, which will be used in the worldwide IVS/Lauritzen handysize joint venture pool. In addition two new 32,000-dwt bulkers, IVS Pinotage and IVS Merlot have been taken on long term charter, which Clark describes as another material step to meeting Grindrod’s stated objective of continuing to provide shareholders with sustainable earnings.