State owned vessels operator, Ethiopian Shipping and Logistics (ESL), designs a strategic plan to go head and shoulders above the rest in the coming few years.
The logistics mammoth plans to boost its foreign currency generation by six folds from cross trade, expand its carrying capacity by 3.6 folds and containers ownership by 7.7 folds.
The enterprise which successfully swapped its vessel tankers with huge Ultramax disclosed that its vessel ownership will be increased in the coming five years.
As Wondwossen Kassa (Cap), Deputy CEO for the Shipping Sector at ESL, opines, the upgrade to huge vessels will accelerate the fleet of ESL, the sole cross continent vessel operator in Africa.
As the captain expressed, in line with the forecasts and sector dynamics, ESL has designed a plan that has beefed its lane from five to seven years, “In order to deal with the ever changing shipping dynamics and achieve our vision and mission, ESL has launched its revised 7 year strategic plan.”
After five years, since new players may join the sector in Ethiopia, the multimodal logistics monopoly is now aggressively working round the clock to be ready for the upcoming competition.
Cognizant of the reduction of commodities transported on FOB as a result of increase in commodities loaded from Djibouti, the success of cross trade which has been the backbone of ESL’s revenue is at the center of the logistics firm’s agenda to which it is positioning itself strategically to ensure it is on top of its revenue stream.
Feeders’ service is also expected to be boosted in the coming year, while regional and international circumstances are also included to the designed strategic plan.
“For instance, the peace process in Yemen is expected to be a good market for ESL. Moreover, wind energy has become a new segment in the global arena, such is the case for Saudi Arabia which has new projects in addition to the establishment of new cities in the Kingdom,” the Deputy CEO explained.
Regarding the wind project, he explained that there are several countries undertaking wind project all over the world, however, most of the equipment are manufactured in China that needs transportation.
“To meet the demand, we need to have big vessels that accommodate the latest type of wind turbines,” Wondwossen (Cap) elaborates, adding, “This is the reason which has led us to revise and come up with a new strategic plan to achieve great results in the coming years.”
“ESL, as one of the major players in the Ethiopian economy, always strives to fulfill its ambition for growth and in meeting stake holders’ expectations. Ships fleet expansion and diversification is one big part of the business,” the Deputy CEO said.
According to the Deputy CEO, in this plan, there are three main shipping segments under which ESL is working to engage with and expand its operations.
The first one is the multipurpose vessel operator segment. ESL is one of the known handy size multipurpose (MPP) operator in the shipping market and has a plan to acquire four 62,000metric tons MPP vessels in the coming 5 years. Such acquisitions will further consolidate ESL’s position as MPP operator in the international market.
The second one is the container shipping segment, “Considering the fast changing local, regional and international realities, ESL believes its container carrying capacity and connectivity should be enhanced.”
“Likewise we plan to increase our container inventory from 13,000 TEU to 100,000 TEU and the container deadweight capacity to 237,000 metric tons in the coming 5 years,” the Captain explained ESL’s ambitions, adding, “Such an expansion will help us to target annual container carrying capacity of 400,000 TEU.”
Last but not least was the bulk segment. On this segment ESL plans to acquire 8 Ultramax bulk carries with a total carrying capacity of 500,000 DWT. The main target of this segment is to support Ethiopian bulk import trade and generate enough revenue from the regional and international cross trade market.
At the end of full implementation of the plan, ESL will increase its revenue from cross trade alone by six folds from the current USD 30 million to USD 180 million and its DWT capacity from the current 305,000 metric tons to 1.1 million metric tons after five years.
“We are confident that we will hit our targets,” Wondwossen (Cap), assertively concluded.
