A few weeks ago, in the end of year speech, José Manuel Urenda, executive vice-president of Empresas Navieras, gave a hint of what the navigation route of the holding could be in 2010. He named it: "Growing up being responsible". He announced two important plans: to expand Compañía Chilena de Navegación Interoceánica (CCNI) business line from the carriage of containers to the carriage of solid and liquid cargo, in bulk, and reorganize and strengthen port operations it in a large matrix.

In an interview with "El Mercurio" newspaper, Urenda analyzed the effects of what he calls a “double” crisis, with a financial effect and other that emerged from the shipping industry and that meant that CCNI had to negotiate the incorporation to the property of the company of a group of shipowners. "We want to face the future in a more stable manner", he says, regarding the future.






Expand the business line

The staff member found that CCNI was "quite well prepared" for the international crisis. There weren’t orders to build ships—the shipping line mostly operates with chartered ships. Felipe Irarrázaval, in charge of management, had already set his sight on strengthening the company.

In December 2008, and certain that the international crisis was going to hit the sector, they started to outline the financial strengthening plan that was finally announced in August 2009. "The strengthening plan is based on a loss estimate, including this year (2009) and next (2010) and the resources to look into the future quietly, and we reached the conclusion that we needed US$ 105 million", Urenda explains. Once US$ 40 millions were raised through the increase of capital subscribed by the comptrollers and through obtaining bank credits, CCNI is to carry out a new operation involving the incorporation of a German shipowners group with 19.1% ownership.

In view of these facts, Urenda states that “the results of our group are hand in hand with the movement of the maritime activity, which has cycles". That’s why he believes in expanding the shipping company businesses: "CCNI is mainly in the container carriage business, but we believe we ought to look for other types of cargo, such as solid and liquid cargo, in bulk, oil, coal and copper concentrate", he states. What are the investments related to this plan? “The main investments have already been made and maybe only the human team is to be widened, with specialists and obviously contract, when appropriate, an ad hoc fleet", he adds. Are there any deadlines? “This is a plan that might be implemented within two years", he adds.

The shipping line closed in 2009 “in line with what was estimated for” says the executive, "we are quite close to the budget, that was to lose between US$ 40 and US$ 45 million and we will lose US$ 41 to US$ 42 million. "In terms of operation, we will diminish significantly losses in 2010 and we will importantly lower the final result, which for a year in which the crisis will continue to be critical for shipping business is not positive, but is comforting", he assures.


Having an eye on the ports

Another large project that might even be finished within the year is the strengthening of the port area by looking for more efficiencies. As at December 2008, CCNI’s carriage by sea accounted for 73.06% of the holding incomes, services to cargo rendered by Agunsa accounted for 25.48%, and port activity carried out by Portuaria Cabo Froward just accounted for 1.46%.

Urenda says that "the directors must give thought to this idea", that intends to "reformulate and concentrate all the assets in one corporation only".

At present the holding is participating in the ports of Arica, Antofagasta, Coronel and Quellón, in Valparaíso (through VTP) and operates other piers, such as CAP’s in Talcahuano, Port of Sidor in Venezuela. "We now have part (of the port activity) related to the headquarters, to Agunsa and to Froward. The idea is to concentrate all the assets in Froward itself or in a new corporation created for this purpose only, and from said corporation address all the future port projects”. Why the change? "This activity has little relative importance in terms of the income of the group and should be more important because it is very stable and with a more accessible financing".

The group intends to participate in port biddings in the Valparaiso Region with a foreign associate. Urenda says that they intend to participate in the bidding of Valparaiso due to the “ancestral ties” he has to the city but “San Antonio situation is very interesting as well”.
Airport Concession: “We might just recover the capital”

A few months ago, José Manuel Urenda, as SCL’s president – Santiago’s airport concessionaire company, in which Grupo Urenda participates through Agunsa as majority shareholder with 47.02%-, set forth a plan to avoid passenger jam before the new bidding. The project included works above US$ 30 million in exchange of an extension in the deadline of the concession but, once again the reply of the authorities was negative. "Through the Concessions Department we were verbally informed that the government has no intention to grant an extension in the concessions", he states.

Agunsa put directly US$ 20 million when the concession began. Ten years after, the consortium does not see any further profits due to this operation. Urenda assures that "we have pointed up to MOP that we are willing to continue investing and to carry out all the necessary works to keep the service quality, but we need something to return to us the fulcrum". He adds that "within the government policies was the one that the concessionaire must have a fair retribution for the risk they are running when carrying out large investments. In our case, it is most likely that this concession is going to finish and we will, hopefully, recover the capital and zero profit"


Source: Emol.com / Economy and Business