Ust Harvard Case Stady Solution
Contents
Introduction1
Fundamental Analysis1
Prospect Analysis3
Financial Analysis4
Investment Analysis4
Operating Policy7
Conclusion8
Appendix
Introduction
Ocean Carrier Inc. owned and operated cape-size dry bulk carriers worldwide. Major Cargo type is iron ore and coal. Vessel sizes are 80,000 DWT to 210,000 DWT. Cape-size carriers travel around Cape Horn rather than the Panama Canal due to size constraints. The cargo operations include maintenance, repairs, insurance, supplying of lubricants, maintaining supplies and on board stores.
Fundamental Analysis
Business Model
Mostly chartered on “time charter”basis for one, three, or five year periods. Occasionally spot charter market was used too. Charterer paid a daily hire rate for entire duration. They controlled where the cargo was loaded and unloaded also determined the cargo. Ocean Carriers Inc. supplied a qualified crew along with a seaworthy carrier which complied with international norms.
Operating Policies
Ocean Carriers didn’t operate ships which were more than 15 years old. As per international maritime regulations they underwent special surveys every 5 years for seaworthiness the carriers. To avoid these costs they sold the ships in scrap or second hand market before the third survey.
Market and Competition
To value the market and competitive environment, we imply the SWOT analysis.
Strengths: Since the firm owns new and larger vessels compared to industry, premium is earned compared to market.
Weaknesses: Since the firm depends on basic industries too much, it has not much product differentiation and becomes less competitive.
Opportunities: Over 85% of ships carry iron ore and coal throughout the world. So the demand for iron ore and coal products is basically depends whether the economy is strong or not, which means a great deal of vessels are needed. Australian production and Indian Exports are creating long term demand.
Threats: There is probability of defaulting of Charterer.
Introduction1
Fundamental Analysis1
Prospect Analysis3
Financial Analysis4
Investment Analysis4
Operating Policy7
Conclusion8
Appendix
Introduction
Ocean Carrier Inc. owned and operated cape-size dry bulk carriers worldwide. Major Cargo type is iron ore and coal. Vessel sizes are 80,000 DWT to 210,000 DWT. Cape-size carriers travel around Cape Horn rather than the Panama Canal due to size constraints. The cargo operations include maintenance, repairs, insurance, supplying of lubricants, maintaining supplies and on board stores.
Fundamental Analysis
Business Model
Mostly chartered on “time charter”basis for one, three, or five year periods. Occasionally spot charter market was used too. Charterer paid a daily hire rate for entire duration. They controlled where the cargo was loaded and unloaded also determined the cargo. Ocean Carriers Inc. supplied a qualified crew along with a seaworthy carrier which complied with international norms.
Operating Policies
Ocean Carriers didn’t operate ships which were more than 15 years old. As per international maritime regulations they underwent special surveys every 5 years for seaworthiness the carriers. To avoid these costs they sold the ships in scrap or second hand market before the third survey.
Market and Competition
To value the market and competitive environment, we imply the SWOT analysis.
Strengths: Since the firm owns new and larger vessels compared to industry, premium is earned compared to market.
Weaknesses: Since the firm depends on basic industries too much, it has not much product differentiation and becomes less competitive.
Opportunities: Over 85% of ships carry iron ore and coal throughout the world. So the demand for iron ore and coal products is basically depends whether the economy is strong or not, which means a great deal of vessels are needed. Australian production and Indian Exports are creating long term demand.
Threats: There is probability of defaulting of Charterer.