Head of group sustainability at AP
Moller-Maersk on what led the world’s biggest container shipping firm to look
at Alang and reduce its dependence on Turkey and China for demolition.
 |
Annette Stube of AP Moller-Maersk says the
topography is better in India than in some of the other places because the
vessels can come right up to the edge of the facility.
|
Bengaluru: Maersk Line, which previously
never looked at Alang in Gujarat to recycle its ships, now has two of its
vessels being take apart at a yard there with plans to have more scrapped
there.
The Danish firm’s decision was a major shot
in the arm for the beleaguered ship-breaking yards in Alang, often in the
limelight for unsafe practices and working conditions.
What led Maersk, the world’s biggest
container shipping firm, to look at Alang and reduce its dependence on
favourites Turkey and China for demolition?
Annette Stube, head of group sustainability
at AP Moller-Maersk A/S, reveals the strategy in an interview during a visit to
India last week.
Bengaluru: Maersk Line, which previously
never looked at Alang in Gujarat to recycle its ships, now has two of its
vessels being take apart at a yard there with plans to have more scrapped
there.
The Danish firm’s decision was a major shot
in the arm for the beleaguered ship-breaking yards in Alang, often in the
limelight for unsafe practices and working conditions.
What led Maersk, the world’s biggest
container shipping firm, to look at Alang and reduce its dependence on
favourites Turkey and China for demolition?
Annette Stube, head of group sustainability
at AP Moller-Maersk A/S, reveals the strategy in an interview during a visit to
India last week.
Edited excerpts:
What made you pick India and not Pakistan or
Bangladesh?
India is clearly the best place of the three
places. In India, you have the yards that have made the most progress. You have
the four yards that have the certification of compliance with a global rule. Also,
very important, in India you have the best infrastructure to support
responsible ship-recycling, in particular the waste disposal facility. That’s
not the case in Bangladesh or Pakistan.
Besides, the topography, the way the beach is
laid out, is better in India than in some of the other places because the
vessels can come right up to the edge of the facility. With the latest
improvements made at least in one of the yards (where Maersk ships are being
recycled), there is very little space between the bow or the beginning of the
vessel and the concrete floor which is very important because that means you
can lift the blocks right onto the concrete floor and avoid contamination. So,
there are several things in India that actually makes it a better place.
Alang yards have come a long way; they have
the right infrastructure in terms of the waste facility and the topography
supports ship-recycling in a much better way.
Is there a commercial reason behind the move?
We get $1-2 million less when we sell a vessel,
depending on the size, in Turkey and China. It’s just more expensive to recycle
there. The conditions in China and Turkey have for years been better than in
India, Pakistan and Bangladesh. So, there is lot of investments already going
into those yards, I believe, higher salaries as well and better infrastructure.
So, all these things coming together, it has been a more expensive choice; but
the only choice for us really (until now). It’s a market play. They will do
what they can do to get the best prices. That’s how it works.
So, will you ditch Turkey and China in
future?
No, we won’t totally ditch Turkey and China.
We probably still have vessels going to these places. Sometimes it is relevant.
For example, a few months ago, one of our vessels had a big collision outside
the coast of China and it really didn’t make sense to tow it all the way to
India, it was taken care of in China. Also, some of our smaller vessels, the
(oil exploration) supply vessels, if they have been operating in Europe, then
they would probably go to Turkey.
So, the large container vessels, we would probably
take all to India because there we can decide the last trading routes. If they
have been trading in the US, then we can shift them to another trade lane
towards their end of life so it doesn’t have to go without any containers in
the last voyage. That’s just a matter of logistics actually.
For the large container vessels, we would
probably seek to take all of them to India at this point, but we are not ruling
anyone out. It’s also a matter of price and as long as the yards can live up to
our standards.
Is there is a change in your vessel scrapping
strategy, more younger ships being retired?
Previously, the vessels have been older, more
than 20 years old. Typically, I do believe we will see younger ships being
scrapped, we are already seeing that from some companies because of the general
trade and market conditions. So, it’s likely the age of the vessels destined
for scrapping will be going down.
What was it like earlier?
We used to scrap between two and six ships
depending on world trade and steel prices. Steel prices are very volatile so
that really change a lot actually… but in that range. We have been reluctant to
put an exact number to that because of this volatility in steel prices, because
we don’t know how the world trade is developing. Of course, we hope it goes
well; so that means we will employ more ships and that they will be scrapped at
an older age. So, we are reluctant to give out those numbers.
Maersk could take the two ships to a
particular yard in Alang of its choice because the ships were sold to a cash
buyer (middlemen) who was a part of the recyclers group. Is that something you
would be looking in future also?
It makes our task easier. Typically, you see,
there are ties between cash buyers and certain recycling yards. So, if we were
to do also with another yard in Alang, there would typically be another cash
buyer we would approach. This is not normal practice. Normally, most shipowners
would contact a cash buyer and they decide they would sell it for the best
price. That’s why we have 70% of all ships going to substandard beaches. That’s
their decision and there is no requirement from owners. This is what we are
changing.
We are putting specific requirements into the
contract with the cash buyer regardless of who it is to make sure that this
vessel is going to this yard or one of these yards that pursue ship-recycling
in a responsible way according to our standards. You can do it with anyone who
is willing to go into those types of negotiations obviously.
Source:
livemint.
14 October 2016
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