STX Pan Ocean has entered into the largest consecutive voyage contract (CVC) in the history of shipping industry worth USD 5.84 billion.
STX Pan Ocean has entered into the largest consecutive voyage contract (CVC) in the history of shipping industry worth 7 trillion Korean Won. STX Pan Ocean announced that the company has fixed a 3 billion tons of CVC with Brazilian iron ore giant Vale over 25-year starting in 2011. It amounts to a maximum of KRW 7.06 trillion (USD 5.84 billion).
An official from STX Pan Ocean explained ?We have been putting our best efforts to expand our market sales power despite the recession in shipping industry.? He added that the accomplishment attributes to the leadership of CEO J. C. Lee, President D. Y. Kim and other managements who have concentrated on seeking new business opportunities and developing strategic business models between shippers and carriers in Brazil and China.
Strengthened local marketing power also contributed to the signing of this successful deal. STX Pan Ocean targeted Brazil as a prime new market and a year after Brazilian office status was raised into affiliate, the company hit the jackpot. According to the head of STX Pan Ocean Brazil, T. H. Moon, recent recognition of STX group in Brazil facilitated the mega-contract.
The contract was achieved by a win-win scenario of long-term strategic cooperation between a vessel owner and a major shipper. Vale and STX Pan Ocean found a common ground in this contract, since Vale needed a prominent operator for stable shipment over a long period of time and STX Pan Ocean was in need of a large amount of cargoes to generate new profits during the times of extreme recession in shipping industry.
Vale mentioned that STX Pan Ocean"s marketing and operation capabilities are proven in world market, and that Vale would like to seek further business opportunities in the future.
STX Pan Ocean expects to secure its leading position in global market and to accelerate on market expansion in the years to come. In fact, STX Pan Ocean is still maintaining its position as the world-class bulk carrier transporting 47 Million Tons of cargo during the first half the year. Furthermore, STX Pan Ocean"s vigorous marketing in strategic regions has enabled signing other COAs with a top Chinese steel mill Angang Group for $ 230 million for ten years in last July and another COA for two years with Vale.
President of STX Pan Ocean D. Y Kim remarked that a long-term contract with a mega shipper such as Vale will serve as a great asset for future business opportunities with other shippers and therefore more aggressive efforts of expansion in global market will be followed.
Vale is a Brazilian iron ore giant producing the largest amount of iron ore and nickel in the world. During the 1st half of 2009, Vale reported revenue exceeding 30 billion dollars. The company supplies more than 30% of world iron ore volume being the most influential firm in maritime traffic.