Dear Friends and Colleagues, As we bid farewell to 2019, I recap some of the main global events that are relevant to our business. I am afraid it looks a little bleak. The China-US trade war is still ongoing and not yet resolved. Similarly, Brexit is not yet resolved. There is instability in the Middle East and economic and social progress in Africa has declined. Commodity prices are low – apart from oil. Oil prices are high and stable, resulting in high costs for developing non-oil-producing countries.

The year gone by has been one of the most prolific for natural calamities according to the leading insurance companies. Climate change – global warming – is fast becoming critical! With ships adopting the IMO 2020 guidelines of low Sulphur fuel, shipping companies have expressed concerns over the jump in fuel costs by US$ 200 to 300 per tonne for low Sulphur fuel. The oil and gas exploration fleet remain deeply distressed, and the dry bulk sector, for most sizes of vessel, remains bearish.

Ok, now for some interesting positives. On the container shipping side, we’ve continued to see the big lines and consortiums putting large ships (20,000+ TEUs) on Asia to Europe and the Asia to North America trade routes. In the last quarter of 2019, the tanker market recovered well from its historic lows and settled at levels that are acceptable to both the owners and the charterers. The gas carriers are continuing to perform well and there is continued demand for tonnage.

That was a global snapshot. Back in India, 2019 saw us coping with similar challenges, such as non-performing assets (NPAs), the problems of the banking industry and sick companies. In contrast, asset sales and auctions in the steel sector were reasonably successful. Essar Steel was bought by Arcelor Mittal, Bhushan Steel by the Tata Group, the Electrosteel Group by Vedanta and Monnet Ispat by the Jindal Group. Similarly, we have seen some of the older distressed power companies also changing hands.

If these trends continue into 2020, we can be sure that by 2021, the liquidity crunch and the NPA problem will have been solved, leading to a healthier investment climate. Let me paraphrase Darwin: the fittest survive, not necessarily the fastest or the biggest. Always remember, dear colleagues, that the fittest are disciplined and hard-working people who do not have “cheat days”. Our mantra is Honesty, Humility, Innovation, and Perseverance.

One of the objectives of the government of India for the present fiscal year and the next is an ambitious and aggressive disinvestment program. The main public sector companies that have been shortlisted for disinvestment are Bharat Petroleum Corporation Ltd. (BPCL), Container Corporation of India Ltd. (CONCOR), Shipping Corporation of India Ltd. (SCI), Air India Ltd. Interestingly, each of these companies are deeply and closely linked to the maritime, transport or logistics space.

For 2019, I would like to express a very warm thanks to our very special guests “In Conversation”, Ms. Birgit, Marie Liodden, Mr. Stuart Munro, Shri. Pravir Pandey and Dr. Bruce Tomlinson. Not only is Tidings richer due to them, but we believe that the Indian maritime and transport sectors benefit greatly from their thoughts and insights.

I would like you all to join me in welcoming 2020. Let me share with you my New Year resolutions as well as a few predictions. Please, hold me to them during the year or even later.

• Predictions - JMB Group will achieve

1. Terminals

2. Services

3. Logistics

4. Technology

5. Hospitality

I am sure each and every one of you will help me in both upholding my resolutions and making sure that each of my predictions comes true.

Best wishes for 2020!

Krishna B. Kotak
Chairman - J M BAXI GROUP