6. The last decade of the Millennium

or: How to take the bulls by the Horns; loose, but survive nevertheless

6.1 Coal flying High

Ambitious dreams of fast expansion despite of a narrow German market lead to investments in a coal stockpiling, handling and screening operation in Sunderland (UK) and later Immingham.
The opening of the East grants new opportunities to OAM. New trade relations with coal mines in Workuta (Russia) and Kasachstan are improved and become particularly important in the following years: the growing differential between the coking and the steam coal market dry up the traditional supply from Canada.

 

New trades with South Africa and Venezuela are being developed. While some of the new and the traditional trades are producing a healthy increase of profits a few of the new ventures lead to a severe indebtedness.
Mr Kranzusch's directorship of the company ends after five years.
Otto A. Müller has to dispose of its participation in the aggregates trade, the environmental company, the AC trade and two vessels in order to reduce the imminent pressure from its banks. The British venture is sold under the pressure of liquidation procedures from its creditors.

 

For the next few years OAM is left with very limited resources in a difficult coal market and under pressure for further consolidation.
Despite of the known problems which are shaking Eastern Europe during the period of transition when necessary changes take place, tonnage can be increased year by year. Dropping prices on the world energy market and an artificial stable Russian Rubel lead to increasing pressure and an almost complete withdrawal of the Russian coal from the international market in the late 90ies until the Rubel alternates to free fall in late 1998 and hopes are revived.

 

The Asian Crisis dominates the raw material (and indeed shipping-) markets from 1998 onwards.
At Devco severe mining disruptions due to geological problems lead to another severe cut back of operations. The hope for Devco to come back to the export market seizes completely.

One after another Russian coal mine is bought up by the new conglomerates of the new Russian industrial magnates drying out the supplies for OAM.

Indonesia, after a sharp devaluation of their currency and an over supply of coal in the pacific region becomes even more keen to place tonnage on the European market. OAM makes contacts with a variety of suppliers for large vessels, the only economic way to haul the coal over the long distance. After a number of efforts eventually a shipment of a self loading vessel is agreed with one of the smaller independent producers.

In a nerve-racking balance between hope and disaster the vessel waits 3 moth's before she is loaded. The demurrage bill leaves the Indonesian supplier bankrupt but the coal eventually arrives in the Rostock power plant.

In 2003 OAM Coal Trade buys South African Coal through a source in the Czech Republic. The Coal is sold to some German utilities but it is not delivered. With a second purchasing contract the coal is contracted with Russia, but the contract is frustrated as well and after the coal prices reach a historic peak with a world wide energy shortage OAM Coal Trade has to give up.

 

6.2 Difficult parting of good friends

After acquiring 25 % in two 4.000 t newbuildings, MS "Magdalena" and MS "Cemile", OAM had started a newbuilding program for four sister vessels in joint venture with Dutch partners. This leads to the idea of stronger integration also in other activities. During the negotiations for setting up a new venture with two Dutch partners it transpires that one of the Dutch partners is in financial difficulties. This finally ends in a new joint venture set up with equal participation between OAM and Heinrich Hanno & Co. BV (Rotterdam) covering all aspects of shipping, i.e. chartering, technical management, crewing and financing. The two new companies are set up in Hamburg (OAM - Hanno Shipping GmbH) and Rotterdam (Hanno OAM Shipping vof).

This joint venture lasts for three years only before the POOL brakes apart in 1997 after about 25 years of operation. OAM and Hanno dissolve their joint venture and divide their investments leaving Hanno with a fleet of 11 vessels and OAM with a little bit of cash in a depressed shipping market (two years later Hanno sells his shipping interests to Arklow Shipping Ltd. in Ireland.)

 

 

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