The “Seychelles Pride” has called ports on all continents around the world, including in North and Baltic Europe, the Mediterranean, East and West Africa, North and South America, the Arabian Gulf, and the US Gulf. It currently trades in clean refined oil products in the European waters. The fleet performs at a very satisfactory utilization rate of 93% and is set to pursue on this path for the coming years.
The Seychelles Petroleum Company (SEYPEC) announced that it has settled the entire amount on the “Seychelles Pride” loan with KfW, the German government-owned development bank, based in Frankfurt from which the funds were originally secured. This landmark event comes amidst some quite comforting operational news for the tankers in a bullish commodity transport environment.
The country and the company are both well-positioned to benefit from this favorable environment with the forecast of a positive tanker services market. On a purely financial standpoint, this accomplishment will definitely ease the company’s cash flow, strengthen its net asset value, and further improve its balance sheet.
Apart from streaming and expanding the important financial aspect of the company, the professional upgrade for Seychellois seafarers in the tanker business is as much a matter of satisfaction for the management. More than 125 of the compatriots are now benefiting from the positive exposure on the fleet of tankers operations in tight administratively-controlled areas of the world such as Europe and North/Central America. As a matter of example, the “Seychelles Pride” employs Seychellois in more than 50% of its workforce across ranks at any one time.
The opportunity to work under European Certification due to the partnership with German company GTS German Tanker Shipping, has yielded tremendous human dividends. No financial value can tally with this achievement which allows sons and daughters of the country to acquire valuable expertise and experience in an international environment. Further, the proceeds from their earnings contribute regularly to the economic base of the country with the repatriation of important funds to their families each month. It is expected that the number of Seychellois mariners on the SEYPEC tankers will soon climb to 175 where they are tested and accredited with the most stringent regulations and procedures in the business.
“We value our people most in the company. Our fellow citizens working on our tankers are living a unique and most valuable experience. Apart from this milestone repayment, we also have a sound growth factor for the coming 5 years. Revenues are expected to achieve positive results in this investment business, with all the fundamentals remaining equal. It is now that we start to genuinely reap the fruits of this coherent plan for the creation of a national tanker fleet. Its combined benefits on the human, strategic, and financial considerations by way of strengthening our balance sheet gives real impetus to our drive to pursue in this direction and other sectors,” SEYPEC CEO Conrad Benoiton stated.
The achievement, when put in the right and honest perspective, is primarily a matter of national pride. Seychelles started to invest in the tanker business in 2002 with the clear objective of a vertical integration and more so to create an investment mechanism. Fourteen years later, the forward-looking policy and decision are proving immensely right. The full repayment of the “Seychelles Pride” loan translates into a Rs160M wholly-owned asset for Seychelles and the company, as determined by an international independent valuation.
The biggest ever foreign investment by a small country like Seychelles is now showing its “raison d’etre.” This is a matter of pride, as the tanker project is self-funded without a single rupee from public funds or any guarantee from government. This investment venture was rightfully endorsed by government as a business diversification strategy, a component to growth despite baseless bashing.
The SEYPEC tanker business had indeed undergone some turbulent times since its start, but resilient policies and resilient of its workforce threaded among all these constraints to attain a favorable and profitable era. Latest figures compiled by the national petroleum company highlights very encouraging prospects for the coming years in terms of revenue and cash surplus. The ongoing decline in the crude oil price, which increased refiners’ margins, has driven up product volumes and, therefore, tonnage demand and rates. This can only anticipate the positive tanker market momentum to continue for year 2016, international energy analysts affirm.
For SEYPEC, this positive outlook thrusts its tanker operations into a sustainable profitable territory set to yield a surplus until 2019.
“The very conducive environment of the tanker operations is but one among the manifold factors that have contributed to SEYPEC’s comfortable position today,” an economist commented. “There has been a subtle and successful combination of positive underlying tanker market conditions and the SEYPEC’s proven business model. The domiciliation of the majority of the tankers on the Isle of Man has yielded multiple positives results by opening an easy gateway for acceding funds overseas, improved its credentials and trust-building with its partners resulting in important savings over the past years. The strategic partnership with the German tanker company GTS has lowered costs and balanced the books, improved crew operations and management. Economies of scale have been fundamental to the turnaround with much better technical, risk management, procurement and financial expertise and experience receiving strong endorsement by Oil Majors in positive vetting of the fleet for chartering contracts.”
While reflecting on the landmark of the “Seychelles Pride” full loan repayment, SEYPEC is quite confident on the repayment of the outstanding amounts on the other tankers, due to end in 3 years with 81% paid off on total investments. Seypec continues with its recruitment drive with a third cohort group of young cadets scheduled to join the fleet in the coming weeks.
Seychelles is a founding member of the International Coalition of Tourism Partners (ICTP) .