Navios sees opportunity in container shipping

   The Navios Group is a powerhouse in the bulk shipping world.
   Recently, it has also taken an interest in the container shipping business.
   The Piraeus-based Navios Group consists of three New York Stock Exchange (NYSE) -listed companies and one unlisted logistics company:

• Navios Maritime Holdings L.P. (NYSE: NM) has a fleet of 64 dry-bulk owned and long-term, chartered-in vessels. It has large ownership or economic interest in the other three companies.
• NM owns 20 percent of Navios Maritime Partners L.P. (NYSE: NMM), with a 30 vessel fleet consisting of 25 dry bulk vessels and five container ships. The five 6,800-TEU containerships were acquired from Hyundai Merchant Marine last year and then chartered back to the company.
• NM has a 46.4-percent economic interest in Navios Maritime Acquisition Corp. (NYSE:NNA) with a 43 vessel fleet: 10 VLCCs, 29 product tankers and four chemical tankers.
• NM also has a 63.8-percent ownership in the non-listed Navios South American Logistics, which has interests in the port terminals, barge and cabotage tanker business.

   In addition, the three public companies jointly own yet another company, Navios Europe, which has a fleet that has five tankers and five containerships ranging in size from 2,007 TEU-3,398 TEU that were purchased last year from Germany’s HSH Nordbank when it decided to downsize its shipping portfolio.
   Angeliki Frangou, the chairman and chief executive officer of Navios Maritime Holdings, was at the New York Stock Exchange to ring the closing bell as part of festivities to mark the 60th anniversary of Navios, a company that can trace its roots back to a subsidiary of U.S. Steel.
   Frangou says the company sees an opportunity to expand its involvement in the ownership of containerships. She noted that while the industry has gone through a period of oversupply of ships, “demand is now coming back” and that the market is “cleaning up” as a result of scrapping.
   While ships the company has purchased to date have been second-hand, she said the company is also looking at new vessels.
   She said the company is not exclusively focused on a specific size ship — “We look a particular deal and whether it makes sense,” she said.
   While Navios has a complicated structure, Frangou said this gives investors the option of investing in particular sorts of ships — dry bulk or tankers, as well as a company structured like a master limited partnership focused on cash flow.
   When Frangou gave a presentation about the Navios companies at the NYSE this week, she was joined by Mario Bergara, Uruguay’s Minister of Economy and Finance, who spoke about investment opportunities and the outlook for the Uruguay economy.
   Frangou sees big opportunity to grow Navios South American Logistics, a joint venture with Peers Business Inc. The company owns a fleet of 363 barges, including 72 barges being delivered in the first half of this year.
   The Hidrovia region — which includes the watershed of the rivers flowing into the Rio de la Plata such as the Paraná and Uruguay and their tributaries — accounts for 55 percent of global soybean production and is seeing significant expansion of the iron ore trade. It is also where 69 percent of Argentina’s refining capacity is located.
   Where the Mississippi River system supports about 27,000 barges, there are about 1,700 barges operating in the Hidrova region, so Navios sees significant opportunity to grow the amount of trade moving on the river system between Argentina, Brazil, Uruguay and Paraguay as well as with overseas countries.
   While some of the barges operating in the Hidrovia region are similar in size or even built originally for the Mississippi River, Navios has been ordering new barges from China that are larger. These jumbo barges have a capacity of 2,875 tons compared to a conventional 1,500-ton Mississippi barge.