Being the shipping giant that is the world’s largest owner and operator of VLCCs (Very Large Crude-oil Carriers), Bahri structures its operations in six business units including Oil, Chemicals, Logistics, Dry Bulk, Ship Management, and Big Data. The company owns 87 vessels, and it has achieved all this success in less than four decades since it started as a small company with a limited number of vessels. To discuss Bahri’s success story further, we met Mr. Hisham N. Alnughaimish, the Vice President of Commercial and Operations Division at Bahri Oil, to tell us how the company has managed to expand globally.
By Abdelghany AG
1. Saudi Arabia and the GCC countries economy depend on oil, how did you manage to protect the maritime sector from the fluctuations in oil prices?
The value of oil transportation is tremendous in the shipping industry. Thus, oil transportation prices are highly affected by the current growing demand for oil. In order to ensure a stable supply of oil to Saudi Arabia and our neighbors in the Gulf region, which in turn will ensure signing long-term contracts with customers, we established a specialized national company that will fulfill the requirements of the oil sector without dealing with external service provider parties.
2. Do you consider yourself part of the Gulf economy pillars?
We are a main factor in the stabilization of the oil transportation prices, not only in the Gulf region but also in the world. We are transporting oil from the Gulf countries and offer our services to all the importing and exporting countries. For example, ship oil tankers in the United States, oil exporters in Mexico and Venezuela, or oil exporters in the West African coast, such as Angola and Guinea, would request us to load cargo and transfer it to China and India during the return of our ships from the American continent due to our clients’ utmost trust. Therefore, we contribute to the stabilization of oil economy for many other countries outside the Gulf region.
3. The smart management approach of your vessels requires constant monitoring and tracking. Is this why you decided to establish Bahri Data?
Absolutely. Data and information are essential to the economy not just for the maritime sector. For us, the oil sector is the most sector that needs data for operational planning. As for the transport of petrochemicals, bulk and general products, the shipping lines of these goods are presented and stable, and they don’t fluctuate as in the energy sector. Currently, we know that data will hardly decide the best way to operate and direct our vessels. However, in the first step, we gather all the information scattered between files and with our employees to be grouped into an integrated data platform, then link it with other external information sources. This will allow us to build an intelligent support system that will make the decision-making easy which in turn will contribute to increasing the efficiency of our resources in the company which ships are a big part of it.
4. Based on that, how did you manage your forecasting, planning and operating your ships?
Currently, we are fully dependent on the human element to analyze the daily market requirements in order to ensure the maximum use of the company's resources. Our staff is working around the clock, and they hardly sleep due to their commitment to the international markets. I am proud to have successfully witnessed this experience with a large group of Saudi national cadres, who are some of the best in the world. We are known among our colleagues and the international market as the group who don’t turn their phones off. Our families are now accustomed to this style of work that became part of our lives. We must stay in contact with each other and exchange information immediately, as the approximate cost of renting the ship can be more than $150,000 daily. Therefore, we invest in every minute of our time, or we might endure huge losses.
5. How did Bahri manage to build such a loyal, dedicated and qualified team?
In fact, without having such a highly dedicated, professional and loyal team, we can’t be successful in the transportation and logistics sector. Many people don’t understand the nature of this business; it highly depends on trust and personal relationships. That’s why, in the personnel selection process, we look for cadres who have exceptional communication skills and who understand the importance of giving priority to customers. If they don’t keep up with this concept, they will find themselves out of business in a short period of time.
We have also developed a special program to train and prepare cadres to work within this culture. The program is called “Maher,” and it targets university students and new graduates, and trains them for a year. The program aims at educating students about the culture of maintaining high-quality services at work and customer satisfaction. We are also working with the University of King Abdulaziz to train students for the skills required in the maritime sector. Furthermore, we seriously think about developing a specialized academy in maritime studies to prepare our future employees.
6. Can we get an overview of your current projects, and do you have any future expansion plans?
Currently, we have 10 Very Large Crude-oil Carriers (VLCCs) under construction with Hyundai Samho Heavy Industries. We received four of them during this year, and one will be completed by the end of the year. The remaining five vessels will be delivered by the end of 2018. Furthermore, we are establishing a $1.5 billion marine investment fund as part of an agreement with the Arab Petroleum Investments Corporation (APICORP). We look forward to acquiring 15 additional bulk vessels through this fund on three stages.
7. What is the capacity of your fleet?
Bahri is considered the largest owner and operator of Very Large Crude-oil Carriers (VLCCs) in the world. We have 40 vessels with the capacity of 12 million TEU. We are also the largest owner and operator of chemical tankers in the Middle East with a fleet of 36 tankers and a total capacity of 1.3 million TEU. We also own five dry bulk carriers and six multipurpose vessels, in addition to six VLCCs and four bulk carriers under construction.
8. What are the potential business sectors that you are planning?
We are currently collaborating with Saudi Aramco, Lamprell PLC and Hyundai Heavy Industries (HHI) to build an international shipyard and offshore drilling rigs at King Salman International Complex for Maritime Industries & Services located in Ras Al Khair Industrial City on the Arabian Gulf coast in eastern Saudi Arabia. This will further our contribution and strengthen our alignment with the nation’s 2030 Vision.
In order to establish this project, we were motivated by the significant rise in the cost of shipbuilding as some has already reached $150 million, making us seriously think about the need to manufacture instead of just being importers. We are also developing our capabilities in the maintenance, ship management, and warehousing fields. In conclusion, we are keen on making the Saudi economy depend on alternative resources other than oil, such as manufacturing, transportation and logistics services that we already have in the Kingdom.
9. Why did you choose Dubai specifically as a base for your operations in the offshore sector?
The UAE has provided us with a lot of facilities to ease our business operations, especially since Dubai has become an international maritime hub and a strategic location to meet the clients and ship owners. Most importantly, at this point, Dubai has easy access to the entire world with daily flights from and to almost each country in the world. This makes us always in direct communication with our clients and partners.
Moreover, the UAE has the most recent technologies in the field of communication, information, hospitality, and services, designed specifically for businessmen. This allowed us to run our business and establish our marketing and commercial activities on the same level as London and many other international capitals that are considered global maritime hubs. In addition to that, Dubai is close to Fujairah, which is one of the biggest international harbors, and this has facilitated our technicians’ arrival to their ships.