Seypec tanker: operations propelled into profitable territory

Seypec tanker: operations propelled into profitable territory

23-December-2015
R82 million profits for 2015 after successful turnaround
Revenue reaches a SR715 million high
Effective Business Plan guarantees sustainable growth
Seychellois seafarers receive a massive boost through international exposure

The Seychelles Petroleum Company (Seypec) reported a first positive net cash flow surplus on its tanker operations since the past six years although it had been showing a positive operating net cash flow. This successful turnaround concludes a combination of forceful efficiency-driven policy coupled with circumstantial elements in the tanker business worldwide.

Sustainable growth
On a relative basis, tanker operations look attractive and prospects are more conducive for a continued path to a profitable era.
“We have finally steadied the ship and turned around by posting a net cash flow of US $6.3 million (R82 million) for this year,” Seypec’s chief executive Conrad Benoiton told Seychelles NATION.
“Revenue has climbed from US $39.2 million in 2009 to US $54.8 million in 2015, a leap of 39%. Profits prior loan repayments on overall activities of the tankers have soared from US $1.3 million in 2013 to US $15 million in 2015. The end result is this unprecedented net cash surplus of US $6.3 million in 2015 part of which will be handed as returns to the government of Seychelles, our main shareholder, for the benefit of the Seychellois people,” Mr Benoiton said.
The company now enjoys a greater financial flexibility in these relatively good times with expected average annual net surplus for the next 4 years hitting R122 million (Fig 1 ). These solid results and warming prospects contribute to a very positive operating and financial performance of the company as a whole.
“This has been possible through a combination of positive underlying tanker market conditions and the company’s proven business model,” Mr Benoiton stated.
“We continue to improve the efficiency of our operations, and firmly believe that our significant shipping activities are a source of strength and stability going forward. While the geopolitical and economic outlook remains especially difficult to predict, we remain optimistic about the prospects for further tanker market growth. It is a fact that we have long suffered an unjust bashing, but Seypec has resiliently thrived with its tanker operations through all adversities. Now comes the time to handover these returns to the nation and to continue marching forward with high standards of operational ethics,” said Mr Benoiton.

The winning formula
Since 2013, Seypec has secured a valued partner for its tanker business. This strategic partnership signed with the highly efficient German company GTS (German Tanker Shipping GmbH & Co) has brought the operations and results to new heights. By linking with the German company, Seypec has pressed the button of a winning formula which is the pivotal element to the turnaround apart from the favourable global oil transportation situation prevailing worldwide.
“GTS has a strong foothold in the market, including a significant global presence and low cost operations due to its ability to spread overheads,” Mr Benoiton explained.
“They excel in supervision, manning, chartering, operations, insurances, supply of stocks and spare parts, maintenance as well as the constant surveillance and improvement of all quality, safety and security standards. Seypec’s decision to link with GTS is therefore a win-win partnership. GTS has now an extended fleet of 18 vessels with the inclusion of the five vessels from Seypec and we benefit from all aspects of the economies of scale. We have attained another level playing field since 2014. Owners worldwide continue in their attempt to balance the books by lowering costs and the popularity to hand over the crewing and operating management is on the rise,” Mr Benoiton added.
This strategic partnership offers better technical supervision, reliable risk management, and expert procurement and financial experience to Seypec. The results have been in line with the initial expectations with the utilisation rate rising from 60 to 93% for the last two years due to a good market performance. This has obviously generated increased, stable and encouraging revenues while guaranteeing a better upkeep of the company’s assets.
“Our partnership with GTS is very positive. We now play in the back garden of the very stringent European shipping territory. Through our partners, we are in a position to dictate terms for doing business, for restructuring and rationalisation of port calls, for tighter controls over agents, and for cut down on various cargo handling expenses. These efforts have significantly contributed to the overall results. But another massive advantage of this joint venture is the immense cutting for the Seychellois seafarers for their training and employment in the most attractive area of the world,” Mr Benoiton said.

Unique training and development platform for Seychellois
Indeed, the commercial deal engaged by Seypec with GTS has offered a unique opportunity to Seychellois seafarers as they are now given the possibility to integrate a global oil shipping sector. Together with the Seychelles Maritime Academy (SMA), Seypec has devised a comprehensive and long-term strategy to enhance and consolidate the training and deployment of local seafarers. The platform is now much wider with the 18 vessels of GTS where the seafarers can operate giving them inestimable international exposure. It also puts them into focus with the high-level continental European certification after acquiring standard operation procedures.
“This is part of or Corporate Social Responsibility programme and all the training costs are supported by Seypec,” Mr Benoiton explained.
“We have to-date 108 Seychellois trained or being trained and employed as seafarers in the Seypec crew pool. Crewing is a vital element to operating tankers but also an expensive one. Seypec therefore fulfils an obligation to train Seychellois nationals overseas which would have been otherwise difficult for the SMA. We have roughly invested R58 million in the last 10 years training and developing skills of our local crew. We shall not stop on such positive track as we have already decided to recruit many more young aspiring seafarers for pre-sea courses in Sri Lanka and subsequent placements on board of our fleet during 2016. Apart from the investment in career development, we are also proud to note that the local crew members are helping the country to earn foreign exchange with an important amount of their salaries which is repatriated every year to the tune of R72 million,” noted Mr Benoiton.

Diversification with an objective
At a time when the investment in the tanker business is yielding dividends to the nation and the company, the actual concept of such venture is proving Seypec right. This major strategic diversification allows a host of advantages to permeate into its main activity of importing and distribution of petroleum products in Seychelles. The decision to broaden the financial capabilities with a strong asset base is the biggest ever foreign investment by any local company. Today, Seychelles has an asset value of over R1.3 billion in the tankers, representing the residual value of the vessels. This also gives a massive asset value on the balance sheet of Seypec triggering countless advantages when dealing with its suppliers. “We must admit that we have massive leverage when we negotiate for oil imports and our suppliers reckon that the company has the financial answers. This lowers interest rates and eliminates many costly financial guarantees as confidence in our company rates high. We are also very happy that we are self-invested and did not require any rupee from public funds nor any guarantee from the government. It must be stressed that this profitable investment had been fully endorsed by the government and this far-sighted outlook some years ago is now showing results,” noted Mr Benoiton.
This ‘go abroad’ policy was characterised by a vision whereby Seychelles must aggressively seek overseas opportunities. The tanker fleet capable of hauling a substantial portion of oil distribution nationwide and operating in international waters epitomises this declared policy.
An economist stated to Seychelles NATION, “This is a quest for reliable energy supplies and the best way to minimise our vulnerability is to increase our preparedness for less than normal times. This concept involves commercial interests pursuing profits under the banner of enhancing national energy security. The coherent plan for the creation of a national tanker fleet shows that the government of Seychelles did not economise on this strategic national interest. Today, the oil tanker build-up is still driven primarily by commercial factors with a major national interest underlying factor. No other small country in the region has such a fleet to guarantee its petroleum exploration interest along with direct energy security supplies given any eventuality.”

Upholding the Seychelles flag worldwide
Today five tankers – Seychelles Pride, Seychelles Pioneer, Seychelles Progress, Seychelles Prelude and Seychelles Patriot – proudly and efficiently display the national flag of the country on the oceans of the world. The Seychelles Paradise serves the domestic needs of fuel and LPG gas on Praslin and La Digue and provides yet another profitable offshore bunkering service in the region.
“The structural domiciliation of Seypec’s five tankers in the Isle of Man have given way to numerous unjust speculations but is now proving its effective logic and advantages,” a financial specialist affirmed.
“The fact that these tankers are officially registered in this recognised financial hub adds considerable goodwill: it helps a lot to secure loans in foreign currencies at a lower interest rate than would ever be possible in Seychelles, it is an easy gateway to secure these loans without back-breaking conditions and it gives the utmost credentials and trust-building to Seypec when dealing with partners for the import of petroleum products for the country.”
In the past years, Seypec has registered a savings of no less than R540 million on interest rates for the loans contracted.

Times are changing
This year witnessed one of the steepest falls in crude oil prices with higher supply on account of huge pumping of shale oil & gas in US and OPEC not tapering its production volumes.
“In the past, the world has been reliant on OPEC’s (Organisation of Petroleum Exporting Countries) oil,” Mr Benoiton explained. “But times are changing due to oil prices and technology use, and non-OPEC producers are expected to contribute to a significant portion of incremental oil supply going forward. This can affect the logistics of the global oil trade and demand for oil shipments. With orders from China and India looking to capitalise on the low prices to fill their reserves output is expected to remain steady and there is little evidence the current oversupply of oil flooding the markets will diminish.”
The Seypec chief executive concluded by expressing his confidence in the future: “Our company has treaded a meaningful path for over 30 years, serving the nation with utmost dedication and commitment. We have weathered out the difficult periods and emerged as winners. Seypec seeks continued support and patronage of all stakeholders to further build up this great Institution. This all ‘Seychellois Team’ deserves the utmost recognition, they have earned it!”

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Seypec marks 30th anniversary with long service award

31-December-2015

Fifteen employees who have worked with the Seychelles Petroleum Company Limited (Seypec) for between 10 and 44 years have been recognised and rewarded for their long service and loyalty.
Seypec came into being in 1985 following the closure of the Shell Oil company in July of that year. Since that time this government owned parastatal entirely run by Seychellois nationals has a mandate to cater to one of Seychelles’ most fundamental needs, the supply of fuel to meet Seychelles energy requirements across all sectors of the economy.

Seven employees who have clocked 20 years of service and above received special mention and rewards, while the chief accountant of Seypec, Rajagopal Pillay well known as Raza, was recognised and rewarded for clocking more years of service with the company, 44 years in total.
“Before Seypec there was the Shell Oil Company. I started work in 1971 and in 1985 Seypec took over the company until today I am still present and working for the company. I started as a clerk and today I am the chief accountant. I have really enjoyed my time at Seypec,” said a very proud Mr Pillay.
Altogether four employees have clocked between one and five years of service, five of them between 15 and 20 years, five others between 25 and 38, and the longest-serving staff Mr Pillay with 44 years.
Besides Mr Pillay, the employees with more than 20 years of service are Veronique Ciseau, Ray Hoareau, Ralph Durup, Janice Tirant and Adelsine Asba.

The employees received their certificates, tokens of recognition and rewards during a gala evening organised for them by Seypec at the Savoy Hotel on Tuesday.

The event was attended by the Minister for Finance, Trade and the Blue Economy Jean-Paul Adam, the Minister for Social Affairs, Community Development and Sports Vincent Meriton, the Minister for Tourism and Culture Alain St Ange, among other distinguished guests and Seypec management staff.

Addressing guests at the event, the chief executive of Seypec Conrad Benoiton said over the past 30 years Seypec has grown alongside the economy, being an organisation that has always sought to reach out to the people it serves.

He said Seypec has been a platform for economic stability, always recognising that quality matters more than quantity.

“As we celebrate today, we celebrate that drive to always bring better quality to the efficiency of Seypec, the quality of services available to its clients and to the business environment as a whole,” Mr Benoiton pointed out.

Stressing on the fact that there is always room for the organisation to improve, Mr Benoiton said: “Let us also use this anniversary celebration to reflect on ways to continue to improve, let us invite constructive criticism, let us have an open conversation on those areas where there is still scope for improvement.”
At the ceremony Seypec released a limited edition of a book on Seypec’s journey – past, present and future.
Mr Benoiton handed out the first copies to Minister Meriton, Brijeshjivan Shah, as well as Captain Guy Adam, former chairman and chief executive of Seypec.
Mr Benoiton, Captain Adam and the pioneers got the honour to cut the 30th anniversary cake.

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Seypec hands over R445 million to the population in 4 years

31-December-2015
Huge social support to households and services
National interests considerations instead of cheap commercial selfishness
R600 million spent on public service infrastructure improvement over last 8 years

The Seychelles Petroleum Company (Seypec) is playing a major nationwide role as a price stabilisation institution in Seychelles with support to the economy, peaking at USD34.3 million for years 2011 to 2014, say reliable sources from the company. The contribution to contain public transport and energy costs as well as maintaining a uniform price of petroleum products on the entire territory has increased significantly during the four years on account. The trend for 2015 has heralded an improvement of this Price Support Mechanism for national institutions.

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Seypec achieves massive breakthrough

18-March-2016
Company settles entire Seychelles Pride loan

The Seychelles Petroleum Company (Seypec) 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 amid some quite comforting operational news for the tankers in a bullish commodity transport environment.
The Seychelles Pride has called at ports on all continents around the world, including in North and Baltic Europe, Mediterranean, East and West Africa, North and South America, the Arabian Gulf, the US Gulf. It currently trades in clean refined oil products in the European waters. The fleet performs at a very satisfactory utilisation rate of 93% and is set to pursue on this path for the coming years.
The country and the company are both well-positioned to benefit from this favourable 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 our compatriots are now benefiting from the positive exposure on the fleet of tankers operating 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 five 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’s chief executive 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 the 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 R160 million 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’être. 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 rightly fully 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 resilience of its workforce threaded among all these constraints to attain a favourable 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 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,” added the economist.
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 three 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.
The following are some pictures of Seychelles Pride and Seychellois seafarers.

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Daniel Hoareau: From fishing technician to tanker Master

05-April-2016


Seypec welcomes another Seychellois vessel Master on Seychelles Pride

Thirty-six-year-old Daniel Steven Hoareau was appointed Master of the Seychelles Pride, one of the Seychelles tankers, in early March this year thereby crowning a blistering career with Seypec (Seychelles Petroleum Company).
The journey for this young Seychellois from his days at the English River school to the summit of a seafarer’s life is a just reward for his limitless abnegation, flawless application and diligent professionalism.
Upon his appointment in March, Captain Hoareau accessed the most coveted post by everyone who embraces a career at sea. Today he becomes a paragon for all young Seychellois who want to rise the degrees of employment at sea.
An emotional Captain Hoareau told Seychelles NATION that his achievement is the recognition of his dedicated work since joining the marine community.
“The journey to become a Master has been both challenging and exciting. This is a childhood dream come true! The Master position is a demanding job requiring competencies to tackle most difficult situations and this aptitude only springs from serious training. This job demands patience and serious studies. It involves taking every bad situation as a learning experience, having a positive attitude, not dwelling in the past and keeping motivation always on high peaks. It also requires qualities such as respect for all those around and finding a mentor for accurate guidance.”
The success in the career of Captain Hoareau, who joined the company in 2005, is also a matter of pride for Seypec which is witnessing a fair return on its investment in valuable human resources available in Seychelles.
“We have always believed in the potentials of our people, we have always endeavoured to develop their talents and to offer them the best opportunities,” Seypec’s chief executive Conrad Benoiton told Seychelles NATION.
“We pride ourselves to having a wholly Seychellois workforce and we shall always pursue in this noble venture. We are indeed honoured to welcome another son of the country at the head of one of our tankers. Captain Hoareau has an in-depth understanding of the vessel he is now to head. I have every confidence that he will continue to uphold the high standards that our customers and other stakeholders rightly demand from an ocean carrier,” Mr Benoiton added.
Captain Hoareau reflects on his new role in a quite favourable context of the tanker activities.
“I am delighted to take on this role. It comes at a time when the markets are just beginning to recover and when our fleet is rejuvenating and growing its breadth of capabilities. Our tanker service has a bright future and I look forward to being a part of that,” he said.
The new Seychelles Pride Master is also very grateful to those who have initiated and consolidated him in his choice of career.
“I would not have been able to achieve my goals in life without the encouragement of my supportive wife and kids. They are the pillars of my achievement. I would also like to take this opportunity to thank my late father Captain G. Hoareau, my family, friends and Seypec for taking part in my journey. I must send a special thank you to my uncle Captain B. Hoareau, R. Sauvage, Captain G. Adam, Captain E. Hoareau and my mentor Captain R. Morgan,” he said.
From his early childhood in the 1980s, the young Daniel Hoareau contemplated the ocean and had that cherished desire of making it his work place. After joining the Seychelles Maritime School in 1997, he went on to achieve the grade of Fishing Captain at the Reunion Island Maritime School. It was a turning point in his already successful career when he was recruited by Seypec and very soon he was going to have all that lead to the top levels in the merchant navy. A term at Singapore Maritime Academy gave him the Deck Officer Class 3 qualification and he was then admitted to the prestigious Australian Maritime Academy where he unhooked his grade of Deck Officer Class 1 & 2. The young Officer Daniel Hoareau was put into orbit to reach other summits in Australia where he was received as Master Mariner Class 1 in 2015. It was the key which finally allowed him to be in full control of a ship worthy of that name in March this year.
During the past years, Captain Hoareau has worked on several tankers of the Seypec fleet. He started as a 3rd Officer on the Seychelles Pioneer, then progressed in the capacity of 2nd Officer on the Seychelles Patriot and Seychelles Progress to reach the level of Chief Officer on the Seychelles Pride in 2013 before attaining the post of Master of the same vessel this current year. This remarkable track record has only been and is still possible through immense sacrifices.
The life of a Master is one of long journeys away from home and Captain Hoareau reflects on the strongest bonds that tie him with his loved ones. “When I sign off the ship, I try to keep my work away from my family and this allows me to balance the time when I’m not at home. I like to spend time with my wife and kids enjoying every minute of it. In fact my wife is the balance of my family. She always motivates me and lets me know what the kids like, so I can surprise them with a gift when I come home. I am lucky as she takes good care of us and she does her best to explain to the kids why I’m not there when I’m needed. Sometimes this could be hard when my vacation is cut short due to training or a new contract. It’s always a challenge when you are away for so long as I’m at home about four months a year only and I have been doing this job for 10 years now. I miss my wife and kids, their birthdays and other fun moments. But there are so many rewards that my job provides: I can be financially independent, I have a very interesting job, I can provide a good education to my kids and I can plan for a good future.”
Over the past years, Seypec has initiated a sustainable policy to build a competent and flexible workforce capable of meeting the challenges of the external and internal environments. The attainment of Captain Hoareau is yet another testimony of this forceful strategy. Training at all levels transcends services ranging from operations, technical, commercial, corporate affairs and protection services.
“During the past years, recruitment and training of local seafarers have taken a greater dimension and this year, 175 Seychellois are expected to be employed on the Seypec tankers around the world,” the company’s Shipping and Crew Manager told Seychelles NATION.
“Continuous training is adamantly on the agenda all throughout the year. Just to mention a few of them, we offer skills and competencies upgrade opportunities ranging from courses on Electronic Chart Display & Information Systems to preparatory sessions covering both navigation and engineering topics aimed at equipping mariners with a global understanding of the undertakings on board a vessel. We also make sure to give personal social education to all first time seafarers with an insight in nutrition, physical exercise, hygiene, sexual education, dress code, working in multinational crews among other topics.”
Captain Hoareau now sets himself the noble objective of mentoring some of our young fellow citizens helping them to climb up the degrees in their careers. He vows to return the numerous and most precious support to others in the same way he himself had received since the outset of his ‘dream-come-true’ journey to success.

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Anthony Moulinie: First Seychellois to lead as second engineer on a Seypec tanker

07-May-2016
The saying that ‘successful people do what unsuccessful people are unwilling to do’ holds its full weight of truth for Anthony Sam Alfredo Moulinie.Second engineer Anthony Moulinie
His recent promotion as the second engineer on board the ‘Seychelles Pride’ is the natural outcome of persistent and hard work. From the day Anthony Moulinie joined the ‘Seychelles Pride’ in 2002 on a cadetship training scheme, he has always been culturing the appropriate ways and improvising his efforts to grasp out newer opportunities.
“I had a smooth enough climb while others sometimes experienced a bit more difficulty,” the newly promoted second engineer Moulinie told Seychelles NATION.
“I have always been motivated by putting aside any personal distractions and maintained focused to my responsibilities and enjoyed life on board. My sea-going experience added to the proficiency of appropriate training which has aided me to carve out my career. When it comes to marine careers, getting promoted on board a ship requires the same amount of hard work and persistence as that required in any other profession, if not more. Of course, this means being competent at your work is just not enough; it also requires an optimistic and a direct approach,” he added.
The 35-year-old Moulinie has been promoted following highly commended reports for the promotion. This has only been possible as he had continually uphold a high standard in his responsibilities and duties.
“Anthony Moulinie excels at what he does because of his dedication to his work.Seypec as a company keeps an eye on those who show keenness and commitment to their jobs,” Pierre Prosper, the company’s shipping and crewing manager stated.

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