Masterbulk eyes opportunities as Star splits

MASTERBULK, the forestry shipping specialist owned by the Westfal-Larsen family, is eyeing opportunities in the wider dry bulk markets as longstanding Norwegian joint-venture Star Shipping splits.

Star Shipping, founded in 1961 and owned jointly by Masterbulk and Grieg Group, has agreed to split into two separate companies.

Star Shipping consists of a fleet of 40 open hatch vessels and twenty handymax bulkers. The open hatch division will be divided geographically between the two owners, according to established sailing routes. Grieg will take over the conventional bulk division.

Masterbulk will take over Star’s main office location and will continue the co-operation in Bergen by marketing its 19 open hatch ships and three ships currently under construction, under the name of Westfal-Larsen Shipping.

The Grieg Group will retain the Star Shipping name within its group of businesses, its share of the open hatch fleet, the handymax bulk fleet and the terminal in British Columbia.

Masterbulk and Greig said that the decision to split the company stemmed from diverging views on future strategy.

Ragnar Nielsen, president of Singapore-based Masterbulk, told Lloyd’s List that views differed on whether to concentrate solely on the industrial shipping business as they have in the past, or to become a more market orientated company.

The difference over future direction is understood to have brewed for a number of years, and current high dry bulk markets have provided an opportunity for the two parties to formally split the Star Shipping joint venture.

Grieg chief executive Elizabeth Grieg said: “It has been 45 years of good business for Star, but the past years have been more difficult with the partnerships as we have had differences in directions. Three years ago it would have been wrong to divide the company, and that is why we had an ongoing dispute, but the way the market has developed has made the division much easier now and creates two strong starting points for the new companies.

Masterbulk, which primarily owns and operates open hatch, geared, handymax drybulk carriers was the party keen to take a more market-orientated approach to business, while maintaining its core industrial shipping.

“Industrial shipping is always interesting,” Mr Nielsen said. But he also noted: “As we follow the shipping market so closely, we realise you can make much more money. There is an opportunity within the trading patterns we have.”

He said that the forestry trades would be the backbone of the business, with the company having strong links in the trades from Indonesia to Europe.

The company now will though look to utilise the periods when the vessels are free to participate in the wider shipping market, and Mr Nielsen said that there would be a greater mix to their business in the future.

Greig Group has a total of 23 open hatch vessels, with four more due for delivery in 2009. Its part of Star Shipping will be brought under the umbrella of the Greig Group.

Masterbulk was one of the first Norwegian shipowners to set-up owning operations in Singapore back in 1995 under the Approved International Shipping Enterprise Scheme.

It is not thought that the split up will create any redundancies with either of the companies.