TORM establishes joint venture with Guangzhou Shipyard International and ME Production to manufacture scrubbers to reduce sul...
November 09 2018 - 4:12AM
TORM establishes joint venture with Guangzhou Shipyard
International and ME Production to manufacture scrubbers to reduce
sulfur emissions
TORM plc (“TORM” Ticker: TRMD) has established a joint venture
with ME Production, a leading scrubber manufacturer, and Guangzhou
Shipyard International (GSI), which is part of the China State
Shipbuilding Corporation group. The joint venture, ME Production
China, will manufacture and install scrubbers in China and deliver
them to a range of maritime industry customers for both
newbuildings and retrofitted vessels. TORM holds an ownership stake
of 27.5% in the new joint venture.
“Our long-standing relationships with GSI and ME Production
helped to facilitate this unique joint venture at a time when
demand for scrubbers is expected to increase significantly. This
strategic move provides us with a substantial economic interest in
a venture that has the potential to be a large-scale international
scrubber manufacturer. It will also result in TORM obtaining
attractive prices for the scrubber investments that already have a
short payback time,” says Executive Director of TORM Jacob
Meldgaard.
TORM has ordered a total of 16 scrubbers with ME Production
China and signed a letter of intent for additional 18 scrubbers
with the new joint venture. With these orders, TORM has committed
to install scrubbers on 21 vessels and potentially up to 39 vessels
or roughly half of TORM’s fleet. The CAPEX related to the confirmed
scrubber orders is on average estimated below USD 2m per scrubber
including installation costs. TORM expects to be able to obtain
financing for a significant portion of this investment.
“We are very pleased to enter into a joint venture that will
leverage the synergies of a leading scrubber manufacturer, one of
the world’s largest shipyards and TORM, one of the world’s largest
product tanker companies. In addition to the economic potential of
the joint venture, it allows us to secure availability of
high-quality scrubbers, which could pose a challenge to some owners
as we approach the 2020 deadline for sulfur compliance set by IMO,”
says Head of Technical Division at TORM Jesper S. Jensen.
IMO 2020 sulfur regulations
From 1 January 2020, the limit for sulfur emissions from fuel
oil used on board vessels operating outside designated emission
control areas will be reduced to 0.50%. This will significantly
reduce the amount of sulfur oxides emanating from vessels and
should have major health and environmental benefits for the
world.
By installing exhaust gas cleaning systems, also known as
“scrubbers”, air pollutants can be limited. These scrubbers are
designed to remove sulfur oxides from a vessel’s engine and boiler
exhaust gases. A vessel fitted with a scrubber can continue to use
cheaper heavy fuel oil, as the sulfur oxides emissions will be
reduced by the scrubber.
Based on the current market expectations for the future price
spread between high and low sulfur fuel, TORM expects the
installation of scrubbers to be an environmentally and commercially
positive business case with a short payback time.
CONTACT
Jacob Meldgaard, Executive Director, tel.: +45 3917
9200Jesper S. Jensen, Head of Technical Division tel.: +45
3917 9200
|
TORM
plcBirchin Court, 20 Birchin LaneLondon EC3V 9DU, United
KingdomTel.: +45 3917 9200 / Fax: +45 3917 9393
www.torm-plc.com |
ABOUT TORM
TORM is one of the world’s leading carriers of refined oil
products. The Company operates a fleet of approximately 80 modern
vessels with a strong commitment to safety, environmental
responsibility and customer service. TORM was founded in 1889. The
Company conducts business worldwide. TORM’s shares are listed on
NASDAQ Copenhagen and NASDAQ New York (tickers: TRMD A and TRMD).
For further information, please visit www.torm.com.
SAFE HARBOR STATEMENTS AS TO THE FUTUREMatters
discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views
with respect to future events and financial performance and may
include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and
statements other than statements of historical facts. The words
“believe,” “anticipate,” “intend,” “estimate,” “forecast,”
“project,” “plan,” “potential,” “may,” “should,” “expect,”
“pending” and similar expressions generally identify
forward-looking statements.
The forward-looking statements in this release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management’s examination
of historical operating trends, data contained in our records and
other data available from third parties. Although the Company
believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies that are difficult or impossible to
predict and are beyond our control, the Company cannot guarantee
that it will achieve or accomplish these expectations, beliefs or
projections.
Important factors that, in our view, could cause actual results
to differ materially from those discussed in the forward-looking
statements include the strength of the world economy and
currencies, changes in charter hire rates and vessel values,
changes in demand for “ton miles” of oil carried by oil tankers,
the effect of changes in OPEC’s petroleum production levels and
worldwide oil consumption and storage, changes in demand that may
affect attitudes of time charterers to scheduled and unscheduled
dry-docking, changes in TORM’s operating expenses, including bunker
prices, dry-docking and insurance costs, changes in the regulation
of shipping operations, including requirements for double hull
tankers or actions taken by regulatory authorities, potential
liability from pending or future litigation, domestic and
international political conditions, potential disruption of
shipping routes due to accidents, political events or acts by
terrorists.
In light of these risks and uncertainties, you should not place
undue reliance on forward-looking statements contained in this
release because they are statements about events that are not
certain to occur as described or at all. These forward-looking
statements are not guarantees of our future performance, and actual
results and future developments may vary materially from those
projected in the forward-looking statements.
Except to the extent required by applicable law or regulation,
the Company undertakes no obligation to release publicly any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated events.
- 16-2018 - TORM establishes joint venture with GSI and ME
Production - UK
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