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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Shipping sector set for 'solid correction'
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE shipping sector is in for a much-needed shake-up with some large firms destined to go belly up, according to an industry expert.
Mr Neil Baird, a leading Australian commentator, says this recession is a 'solid correction which we much needed to have' in the shipping industry.
Mr Baird, who predicted as early as 2006 that the industry would go bust, said the downturn will have a 'cleansing effect' on companies, allowing them to become more efficient.
'There will be much less slashing and burning in the shipping industry than in the financial and auto industries,' he said, adding that at least one or two big firms will go under, probably in Europe, due to 'overleveraging and stupid management'.
He added: 'We haven't seen a Madoff-like scandal in our industry and we'll probably have one...There will be someone who is a conman who has come into our industry, or who has become one because he's desperate.'
The bankruptcies will be more widespread among the smaller firms, the so-called 'riverbank and m&d yards' that sprouted during the boom years.
Melbourne-based Mr Baird - he was here to launch a biannual Asian shipping and work boat exhibition - predicts the industry will lose about 20per cent of shipping companies, especially the smaller shipyards and owners in China. This is not necessarily a bad thing, as there is now 'a move back to quality', he said.
Mr Baird, who chairs Baird Publications, which publishes magazines and organises exhibitions for the maritime industry, said an oversupply of new ships due to over-ordering during the boom will be a good opportunity to retire ageing vessels, many of which are over 25 years old.
'Not much scrapping has been done over the past few years. A lot of vessels that should have been scrapped were not because we thought there was insatiable demand,' he said.
The downturn will see the industry return to roughly where it was in 2005, with 'much more sensible (asset) prices', he said. 'It will take about 10 to 12 years to get back to the crazy days again, judging from the last two booms and busts.'
This will result in some 'very good bargains' for cash-rich shipowners.
The Asian Shipping and Work Boat 2009 exhibition runs from today until Thursday at the Suntec Singapore International Convention and Exhibition Centre, and features over 80 exhibiting companies from 29 countries, including Germany, Sweden and Norway. YANG HUIWEN
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE shipping sector is in for a much-needed shake-up with some large firms destined to go belly up, according to an industry expert.
Mr Neil Baird, a leading Australian commentator, says this recession is a 'solid correction which we much needed to have' in the shipping industry.
Mr Baird, who predicted as early as 2006 that the industry would go bust, said the downturn will have a 'cleansing effect' on companies, allowing them to become more efficient.
'There will be much less slashing and burning in the shipping industry than in the financial and auto industries,' he said, adding that at least one or two big firms will go under, probably in Europe, due to 'overleveraging and stupid management'.
He added: 'We haven't seen a Madoff-like scandal in our industry and we'll probably have one...There will be someone who is a conman who has come into our industry, or who has become one because he's desperate.'
The bankruptcies will be more widespread among the smaller firms, the so-called 'riverbank and m&d yards' that sprouted during the boom years.
Melbourne-based Mr Baird - he was here to launch a biannual Asian shipping and work boat exhibition - predicts the industry will lose about 20per cent of shipping companies, especially the smaller shipyards and owners in China. This is not necessarily a bad thing, as there is now 'a move back to quality', he said.
Mr Baird, who chairs Baird Publications, which publishes magazines and organises exhibitions for the maritime industry, said an oversupply of new ships due to over-ordering during the boom will be a good opportunity to retire ageing vessels, many of which are over 25 years old.
'Not much scrapping has been done over the past few years. A lot of vessels that should have been scrapped were not because we thought there was insatiable demand,' he said.
The downturn will see the industry return to roughly where it was in 2005, with 'much more sensible (asset) prices', he said. 'It will take about 10 to 12 years to get back to the crazy days again, judging from the last two booms and busts.'
This will result in some 'very good bargains' for cash-rich shipowners.
The Asian Shipping and Work Boat 2009 exhibition runs from today until Thursday at the Suntec Singapore International Convention and Exhibition Centre, and features over 80 exhibiting companies from 29 countries, including Germany, Sweden and Norway. YANG HUIWEN
