IRISL Group in New Era

News ID: 66068

Date: 21 July 2016 - 11:00

IRISL group is an active player in almost all shipping and maritime markets including dry bulk, container, general cargo, tanker, chemical, offshore, passenger, logistics sectors and port services. Over the years, IRISL has achieved a well -known regional and global position, particularly in the Middle East and the Indian subcontinent.

The company fleet currently consists of about 160 merchant ships with a total capacity of 5.2 million Dwt.

From 2008 to January this year (2016), IRISL was under crippling sanctions of the UN Security Council, the US, Europe and some other countries.

After successful implementation of JCPOA in January and as a big result of this achievement, IRISL now can freely communicate and cooperate with all major shipping lines and ports around the globe and its ships have access to all around the world. In the meantime access to a wide range of maritime services including marine insurance, international classification societies, repairing and newbuilding shipyards and financial institutes and banks is available as promising consequences of this great deal.

All these firms and many others with credible international presence are eager to work again with this company.

One of the most important issues for IRISL (which stalled by the sanctions for many years) should be the process of renewal and development of its fleet by ordering new ships and financing them so the company would be able to get back on its feet its position and take fair share of global market.

At present, the market for maritime transport is in poor condition. The liner industry continues to plough through a period of incredible change. As it stands, carriers are unable to make money and commercial ill-discipline means that some have resorted to offering zero freight rates just to hang on to market share.

The dry bulk market has been living through some of the worst times in its history in the recent past. the Baltic Dry Index also kept falling during recent months, marking a new low every other day (in February BDI crashed to 290). It is also probably one of the toughest times for dry bulk shipping companies as many have filed for bankruptcy over the past two years, and, with no sign of any recovery in sight, many more could follow suit.

We can see newbuilding prices at low and attractive levels. Fortunately by lifting the sanctions, and at this critical stage, access to financial markets is getting much easier and investment opportunities are almost in hand.

In this respect, the following should be considered as potential opportunities for IRISL.

As mentioned with the sanctions being lifted, IRISL can operate in all global trade routes comprising East Asia, northern China, Europe, Africa, North and South America.

Also in near future, Iran would be among main exporters of oil, petrochemical products and gas condensates. Among main plans of the company should be entering the market for transportation of these kinds of cargoes so as to direct exports of these products to the European and East Asian countries.

IRISL should plan to expand its direct lines of East Asian countries and North China to the Persian Gulf ports and reestablish its Europe- Asia and the Persian Gulf, as well as North and South America services.

Marine insurance has an important role in the maritime industry. Lifting sanctions allows owner members of Kish Mutual Insurance Institute and consequently the institute itself to be able to trade in Europe.

In the field of money transfer and financing, access to the world finance network is possible after JCPOA deal. Financing major development projects that had stalled for years as mentioned before should be a top priority for IRISL.

To ensure to ensure the implementation of international related to safety and doing business, commercial vessels need to possess necessary certificates that are issued from internationally recognized classification societies. Classification societies are categorized in two groups: IACS members and non-IACSs . Now, IACS member institutions including DNV-GL, LR, BV and domestic institutions can class IRISL ships either in the form of dual class or independently.

IRISL has been always in the process of phasing out its old ships and replacing them with new more efficient ships almost before sanctions. But during the period of sanctions the process of ordering new ships to world-class shipyards and so fleet renewal stopped.

But now as mentioned above, the possibility of ordering ships to the yards and access to international finance firms is available. Therefore, the process of determining numbers, types and characteristics of the ships and following negotiations with the banks, credit and financial institutions and shipyards should be pursued by IRISL and hopefully in next couple of years the company would be able to take delivery of new ships.

Expected increases in Iran’s foreign trade and PMO’s plans for expansion of ports terminals and infrastructures will lead to significant rise in import and export of the country and this will give IRISL the opportunity to carry these cargoes and fully establish itself in port operation activities. In this regard, the company should be looking for JV and partnership agreements with terminals and ports and joint exploitation of existing resources.

So while IRISL intends to re-enter new market segments, a good opportunity is available for achieving this goal and the main driver behind this move in a mostly rock-bottomed shipping market is low price for newbuildings and easy financial services fees and additionally expected increase in export of chemical and petrochemical products generally foreign trade by Iran.

By: Reza Razavi Sayad & Marzieh Shahrezaei