Hong Kong ship owners seize chance as Africa trade soars

Burgeoning trade between China and Africa and sales by German shipping investment funds have combined to create opportunities for two fledgling Hong Kong ship owners.

Tribini Capital and Mandarin Shipping have both acquired container ships from distressed-ship investment vehicles in Germany in the past few months and chartered the vessels to larger shipping lines operating between Asia and Africa.

Cargo volumes from Asia to Africa are growing two to three times faster than volumes between Africa and Europe or North America, shipping experts said. The growth is being fuelled by African consumer demand for Chinese-made mobile phones and other products including chemicals, and by commodity demand in Asia.

The ship owners, owned by separate investors, found they were competing against each other to acquire their ships, with Tribini Capital losing out to Mandarin for two vessels.

Mandarin Shipping director William Fairclough said although the company was not exclusively focused on the container ship sector, "we do see opportunities there given the current problems in the German KG market".

KGs are closed funds that use private investment, mainly from professionals such as doctors and dentists, and bank loans to finance specific investments including in real estate and ships.

But vessel values have slumped since the shipping downturn started in 2008, leaving KG investors facing significant losses that have been exacerbated by long-term charterers returning vessels early or renegotiating charter rates at lower levels. Many funds have closed and sold their vessels.