FESCO AIMS TO BECOME PROFITABLE IN 2003

FESCO AIMS TO BECOME PROFITABLE IN 2003    Far Eastern Shipping Co., the Russian shipping line more commonly known as FESCO, aims to get back into profitability next year, said its new president, Yevgeny N. Ambrosov.
   “I’m sure we can get profit in 2003,” said Ambrosov. “Taking into consideration the world market situation of 2001-2002, during this period (the) shipping industry experienced the worst crises in decades! Dreadful oversupply of tonnage is destructive. But little by little the situation is getting better.”
   Ambrosov was appointed president of FESCO in September, following the change of shareholders of the company. The main goal of the new shareholders is to increase the capitalization of FESCO,    increase its share price, and “finally to reach prosperity,” he said.
   Ambrosov said that the world’s top liner operators “have realized their mistake and now they are trying to improve market situation by mergers with the smaller companies, which are unable to move further.”
   He predicted that the container market will recover through the efforts of all operators.
   “Shipping conferences and alliances, in which FESCO also takes part, are making such efforts,” he said.
   FESCO admits that it is vastly overstaffed and must modernize its organization and fleet.
   Ambrosov, a former vice president of fellow Russian shipping company Sovkomflot, said that differences between FESCO and Sovkomflot are “considerable.”      
   FESCO has a “great amount of workers” earning a “small salary,” Ambrosov said. “I think that such system is completely wrong.”
   FESCO’s head office in Vladivostok employs more than 600 people to manage an owned fleet of 74 ships of about one million deadweight tons. By contrast, Sovcomflot has 77 ships of 3.5 million deadweight tons and about 250 employees in the head office.
   These differences “partly contain untapped reserves that could be used effectively,” Ambrosov said.
   “To make a profit we need the potential abilities of young and energetic specialists,” he added. “Unfortunately now we feel lack of them.”
   FESCO is considering selling its most unprofitable vessels and acquiring second-hand vessels.
   FESCO provides a liner service between the U.S. West Coast and the Russian Far East. FESCO also operates “cross-trade” services on non-Russian trade lanes: the FANAL link between the U.S. West Coast, Oceania, New Zealand and Australia; FESCO Australia Line between Asia and Australia, and FESCO New Zealand Line between Asia and New Zealand.