ESLSE to start ferry service


Ethiopian Shipping and Logistics Services Enterprise (ESLSE), the only flag carrier in Africa, set a strategy to commence cabotage and passenger services.
The logistics giant and multimodal monopoly indicated that in its five year strategy it will include more services including adding new medium size vessels to help achieve its goal.
Roba Megersa, CEO of ESLSE, asserted that regarding potential, ESLSE is in a good position in Africa to commence cabotage service to serve coastal areas in the region. Cabotage is the transport of goods or passengers between two places in the same country by a transport operator from another country.
“To commence the operation second hand properties might be assigned,” he said.
The cabotage operation focuses within particular territory that might be in a single country ports or ports cross border. In this case it might be transport from Djibouti to ports in Eritrea or Kenya and others, according to the CEO.
The sea and inland fleet giant has targeted to boost its fleet mainly in the bulk operation. To attain the target ESLSE undertook detailed study to secure two more medium size vessels.
“The study was concluded and is approved by the board of directors to procure brand new vessels,” Roba told Capital.
“There are two options to acquire new vessels; the property that is already being built for others and the deal might be terminated is the first way, or in other way order from the scratch,” the CEO explained.
“If we get a chance for vessels that is under construction the time will be shorter to receive it, otherwise in the coming two years we will get the vessels based on the second alternative,” he added.
According to the plan, Roba said that the vessels will have a capacity of 63,000 dwt, while the multipurpose vessels that Ethiopia operates now have a capacity about 28,000 dwt.
“This size of vessels are known as ‘supramax bulk carrier’ that are highly preferred for bulk carrier in the industry,” he says adding “they are profitable and we can even lease them for others, but at the same time we know the business and have now grabbed the fertilizer, coal and wheat business, due to that these vessels are very crucial for our operation.”
According to the CEO, the new vessels will be different from the current properties. “The two vessels will focus for bulk carrier,” he asserted.
About a decade ago ESLSE bought nine vessels including two tankers that it received in different time frames. The nine vessels consume USD 234 million and the major share was covered by Export Import (EXIM) Bank of China. Roba said that most of the loan has been paid, “so far over USD 190 million have been paid and the balance will be paid shortly.”
“We settle the loan on biannual basis that is approximately USD 17 million for each,” he added. He said that the local portion of the loan has already been settled and the foreign exchange is at its final stage.
The CEO is confident that his enterprise will not face a challenge to finance the brand new vessels that will be purchased in the near future.
“Since we keep the payment schedule we showed our credit worthiness to our lenders,” he said.
“We have a liquid asset and due to that the finance and guarantee issue will not be a problem. Of course we will use foreign finance to buy the new vessels and not need other warrantee to access the finance,” he explained.
The two tankers, Hawassa and Bahir Dar, have about 42,000 dwt capacity and they are the first tankers for the operator.
ESLSE also target to commence passenger transport with ferries. In the region there is a potential to commence passenger services with ferries. The price will be competitive than air transport, according to the CEO. The ferries are bound to take passengers from East Africa to the Middle East. The scheme is also included in the five year strategy.
ESLSE established in the mid-1960s is the strongest vessel operators and is the only cross continent operator in the African continent.
“We have cargo agents at 327 ports in the world, which is very big,” the CEO descried the capacity of his enterprise, “we retain in the market does not mean we have a fleet but we are engaged in consolidation with agents.”
“We are using our network and buy other slots to transport cargos. Partly we are non vessel owning common carrier (NVOCC), which is an operator that may actually does not have vessel but operate in the business like DHL,” he explained.
The enterprise is also engaged on West African market chartered service. “Recently the enterprise has transported a project cargo from China to Senegal. The business is encouraging and we will continue to operate,” the CEO concluded.