‘Not enough seafarers from India, relative to population'

Bernhard Schulte Ship Management (BSSM) is a privately-held company that provides ship-owners shore-based and onboard maritime expertise. It manages a fleet of about 650 vessels and globally employs more than 17,000 seafarers and 1,000 shore-based workers. It also has 35 service and crew delivery centres in 25 countries. Business Line met the company's Hong Kong-based Chief Executive Officer, Mr Rajaish Bajpaee , when he visited India recently. Germany-based Schulte Group owns BSSM.

Edited excerpts from the interview:

What is the ownership model for the 650-odd vessels that your company manages?

About 70-80 vessels are wholly-owned or partially-owned by the Schulte Group through special purpose vehicles. The remaining vessels are assets that the company manages on third-party management basis. The vessels are of all types, diverse flags, with an average age of 8.5 to 9 years.

The two entities (Schulte Group and BSSM) work quite independently, but interdependently. We are the exclusive ship managers of Schulte Group-owned ships, but we also provide services to others. So, we work at an arm's length.

How many of the company's seafarers are from India? How many Indian seafarers do you plan to hire this year?

India is the second-largest source of seafarers for our company. From India, we have about 2,200 seafarers and another 2,000 are on shore leave. We are looking to hire about 400 seafarers this year.

We also hire fresh cadets and train them at our centre in Mumbai, which is equipped with various kinds of simulators including engine and cargo simulators. We were the first to have liquid cargo simulators. In fact, when India for the first time decided to import liquefied natural gas, through Petronet LNG, we were the consultants. We consulted Petronet LNG on size of ships, number of ships and transfer of technology among others.

We train for various companies, including Shell; we have trained across nationalities — people from the UK to Iran.

How was your company affected during the economic crisis of the last two-three years?

The shipping crisis always comes after the real economic meltdown. The recent one was first a financial crisis, which then became a mainstream crisis and then a shipping crisis. It impacted the industry very badly. At one end, there were reducing (cargo) volumes, at the other there was a large overhang of order-book.

But the biggest shipbuilding nations — China and Korea — did not allow shipyards to go bust. The Government backed the yards because of the large employment they provided.

And if ships were being built and delivered, they had to be manned — which is where we come in. For shipyards, the order book is full until end of 2011 and early 2012.

Also, the ship-owner is always looking for greener pastures. If the ship-owner has tankers and sees better returns in reefers, he will sell tankers and buy reefers. So, to access trained manpower for special ships in a short period of time, the ship-owner takes to outsourcing, resulting in demand for our services. There is a basic mismatch between training people and adding ships. Ships can be built in six to eight months, but to turn a cadet into a captain, it takes seven to eight years.

So, are you saying that the demand for your services actually went up, and you were not in any way hit by the crisis?

Well, we did feel the pinch, but there were different kinds of opportunities that came in. Some owners had difficulty meeting their financial commitments. We had to reschedule, restructure (payments).

Some ships had to be sent to the scrap-yard before their due time, as there was no employment. But we cannot say we had less work on our hand; we had more work. We had a turnover (churn) of 20-30 per cent — of new ships coming in and old ships going out. So, the activity was intense.

Was your hiring plan hit? Did you hire fewer people?

Not really. We lost some people. There was a huge demand for specific skill-sets. About 15-20 per cent of our officers were poached, with companies unwilling to invest in training and willing to pay a premium for trained, talented people. But, thankfully, some have joined back too, as we treat our people like assets.

How does the Indian income-tax regime for seafarers compare with those of other countries?

Let us look at it this way. We don't have a fair representation of seafarers, given our population size. India provides a pool of 80,000-plus seafarers, while a much smaller country like the Philippines provides a pool of 3.5 lakh seafarers and China, 2.5 lakh. The Indian Government should bring out policies to encourage seafaring as a profession at different levels — through education, a better tax regime, and by profiling the profession as an attractive career.

How much of a threat is piracy to the seafaring community?

Countries have to take a much tougher stance against the pirates. Today, the Navies catch the pirates and leave them on the beaches, as the pirates can't be tried. So, they are immune to any kind of law, nothing applies to them. In effect, the human rights of the seafarers are less important than that of pirates. It's a paradox. The countries have to agree in the Security Council that piracy is a crime against human rights.

COMMENT NOW