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Grimaldi Ferries invest in economies of scale to beat rising oil prices
Emanuelle Grimaldi has long believed that consolidation in the European ferry market was not only inevitable but desirable. That belief has only hardened as the price of oil has rocketed, putting additional pressure on weak and strong alike, as well as on anyone with a fast ship or an inefficient engine.
As the clouds have gathered, Grimaldi Lines Naples has also acted on that belief. It has started building big: witness the Cruise Roma due to enter service this month, and its sistership, Cruise Barcelona, scheduled to join the fleet in September.
Initially designed as much smaller vessels, they now weigh in at 55,000 tonnes and will have capacity for 3,000 lane metres of rolling cargo, 215 cars and around 2,300 passengers. Two similar ships will follow as Grimaldi Lines looks for the economies of scale he believes are vital in a high-cost, high-pressure environment.
The company has also become an active force for consolidation over the last three years. In 2005, it launched Malta Motorways of the Sea, effectively snapping up national carrier Sea Malta in the process.
Early last year, it established a major presence in the Baltic when it took control of Finnlines. Handily, the company was just taking delivery of five ro-pax ferries that, at 42,000 gt and with a rolling cargo capacity of 4,200 lane metres, responded to Grimaldi Lines demand for size.
Grimaldi Lines subsequently upped the ante with orders for six ice-class 1A vessels with capacity for 3,250 lane metre of rolling cargo and 1,400 cars. And as 2007 closed, Grimaldi Lines was again ready to move on an unsuspecting quarry. In this case, it was Anek Lines and Grimaldi Lines acquired 14% in a recapitalisation of the Greek ferry operator.
It was a somewhat less happy alliance. Mr Grimaldi and Anek Lines managing director Yannis Vardinoyannis clashed repeatedly over the ensuing months over the latter's push for a convertible bond issue closed to existing shareholders.
The prospect of further friction was averted last month in dramatic fashion, with Mr Grimaldi selling his Anek Lines shares to Mr Vardinoyannis and the latter reciprocating with the sale of his recently acquired 27% stake in Minoan Lines.
It is a trade that Mr Grimaldi seems distinctly happy to accept, not least because of the enthusiasm with which it was met by Minoan Lines chief executive Antonis Maniadakis.
Mr Grimaldi notes that Minoan Lines staff might reasonably have feared a foreign takeover, given the fate of so many old shipping names swallowed by larger players in recent years. But he insisted he is firmly committed to retaining both the existing personnel and headquarters, and the brand.
"It has a fantastic service between Heraklion and Athens, which has strong local support and it is a good company that is working well," he said, adding that he was counting on Minoan Lines to develop Grimaldi Lines interests in the Adriatic passenger ferry business.
"Minoan Lines brings local knowledge and top management to this market. It is the right vehicle to develop the Adriatic." Grimaldi Lines has had its eye on the fast developing market between Italy, the Balkans and Greece for some time, aiming to fill a gap in its coverage across the Mediterranean.
Indeed, Mr Grimaldi cited growth on the Adriatic as one reason for the Anek Lines link-up, while insisting that if he did not push forward in partnership with the Greek company, he would pursue it alone. Those ambitions also cover the cargo market, where Grimaldi Lines has four vessels running between Monfalcone and Piraeus.
But the company is also working on cross-Adriatic services, designed to open up new areas of opportunity in eastern Europe. Among those is an extension of its existing twice-weekly service from Genoa to Catania and Malta, with a third vessel due to be added from Catania to Igoumenitsa and Patras.
As Mr Grimaldi puts it: "The idea has always been to connect the periphery to the centre, so cargo might go up the Adriatic to Trieste before coming back to the Balkans. With this service, we are beginning to connect the peripheries of Europe, taking cargo for Greece from Sicily and Malta and connecting to Albania, Romania and Bulgaria."
As the clouds have gathered, Grimaldi Lines Naples has also acted on that belief. It has started building big: witness the Cruise Roma due to enter service this month, and its sistership, Cruise Barcelona, scheduled to join the fleet in September.
Initially designed as much smaller vessels, they now weigh in at 55,000 tonnes and will have capacity for 3,000 lane metres of rolling cargo, 215 cars and around 2,300 passengers. Two similar ships will follow as Grimaldi Lines looks for the economies of scale he believes are vital in a high-cost, high-pressure environment.
The company has also become an active force for consolidation over the last three years. In 2005, it launched Malta Motorways of the Sea, effectively snapping up national carrier Sea Malta in the process.
Early last year, it established a major presence in the Baltic when it took control of Finnlines. Handily, the company was just taking delivery of five ro-pax ferries that, at 42,000 gt and with a rolling cargo capacity of 4,200 lane metres, responded to Grimaldi Lines demand for size.
Grimaldi Lines subsequently upped the ante with orders for six ice-class 1A vessels with capacity for 3,250 lane metre of rolling cargo and 1,400 cars. And as 2007 closed, Grimaldi Lines was again ready to move on an unsuspecting quarry. In this case, it was Anek Lines and Grimaldi Lines acquired 14% in a recapitalisation of the Greek ferry operator.
It was a somewhat less happy alliance. Mr Grimaldi and Anek Lines managing director Yannis Vardinoyannis clashed repeatedly over the ensuing months over the latter's push for a convertible bond issue closed to existing shareholders.
The prospect of further friction was averted last month in dramatic fashion, with Mr Grimaldi selling his Anek Lines shares to Mr Vardinoyannis and the latter reciprocating with the sale of his recently acquired 27% stake in Minoan Lines.
It is a trade that Mr Grimaldi seems distinctly happy to accept, not least because of the enthusiasm with which it was met by Minoan Lines chief executive Antonis Maniadakis.
Mr Grimaldi notes that Minoan Lines staff might reasonably have feared a foreign takeover, given the fate of so many old shipping names swallowed by larger players in recent years. But he insisted he is firmly committed to retaining both the existing personnel and headquarters, and the brand.
"It has a fantastic service between Heraklion and Athens, which has strong local support and it is a good company that is working well," he said, adding that he was counting on Minoan Lines to develop Grimaldi Lines interests in the Adriatic passenger ferry business.
"Minoan Lines brings local knowledge and top management to this market. It is the right vehicle to develop the Adriatic." Grimaldi Lines has had its eye on the fast developing market between Italy, the Balkans and Greece for some time, aiming to fill a gap in its coverage across the Mediterranean.
Indeed, Mr Grimaldi cited growth on the Adriatic as one reason for the Anek Lines link-up, while insisting that if he did not push forward in partnership with the Greek company, he would pursue it alone. Those ambitions also cover the cargo market, where Grimaldi Lines has four vessels running between Monfalcone and Piraeus.
But the company is also working on cross-Adriatic services, designed to open up new areas of opportunity in eastern Europe. Among those is an extension of its existing twice-weekly service from Genoa to Catania and Malta, with a third vessel due to be added from Catania to Igoumenitsa and Patras.
As Mr Grimaldi puts it: "The idea has always been to connect the periphery to the centre, so cargo might go up the Adriatic to Trieste before coming back to the Balkans. With this service, we are beginning to connect the peripheries of Europe, taking cargo for Greece from Sicily and Malta and connecting to Albania, Romania and Bulgaria."
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