It is with great disappointment that Romas Marine announces the discontinuation and reversal of the planned expansion of the group globally.
During 2019 we started to expand the company by signing broker-agent agreements and established representative offices in Rotterdam, Singapore and Aberdeen. Plans were on the table for Dubai, Houston and Rio.
Having gone through the recessions in the early 90ies, SARS and the Asian crisis in the late 90ies, the brief recession following 9/11, the GFC in 2008 and the terrible tsunami that hit our industry in 2014/2015 we anticipated that we were operating in a market which had nearly recovered from the bloodshed of recent years and were confident the next recession would take some time. Hence our expansion.
Then Covid19 hit.
I survived as a broker through all these difficult times. I moved to Australia with my young family to start a new broking division within Asiaworld in 1999, truly a time when the industry was suffering. During the first year not one single fixture. As a “fixture-junkie” those were tough times which were followed by 7 very good years due to globalization and the consequent resources boom.
Then the GFC hit.
In 2009 we started with Romas Marine in Monaco. Right in the middle of the GFC, still the worst financial crisis since the Wall Street crash in 1929. We struggled but were able to survive. We had to cut costs, adapt, work harder but made it through.
Then 2014’s “oil-crisis” hit.
Even until today the effects of that crisis could be felt in our industry. Companies like Bourbon, Solstad, Tidewater, McDermott and many more had to be refinanced simply as an after-effect of the drop of the oil-price from $ 140 to $ 30/barrel. 15 years after our first fixture less year, we faced a year again without a single contract. We had to adapt once more, cut costs, work even harder for much longer. Work a full year 2015 every day 12 hours, weekends, Christmas, Birthday parties. Not earn a single Euro. In early 2016 we ended up creating an equipment bidding website “RMBIDS.COM” which became a success and allowed us to continue providing services in this dynamic industry. Although RMBIDS.COM stopped, we continue to trade marine equipment to this day. The company grew back to health and we started to employ new people and expand the group.
Then COVID19 hit.
Now we face a recession on the back of this 2015 oil-crisis. The size of the recession seems like a Black hole to an astronaut floating in space. We have no idea how big it will be and what lies beneath. Large Shipowners have no fat on their bones, they have no financial buffers while trade reduces globally with 40%. We can see them “floating” on the event horizon but they may already be long gone.
Unemployment in the US – the world’s biggest consumer – rose with 21 million people in only 3 weeks. No planes flying, means less oil needed. People having to stay home means no cars driving so no or much less oil and/or renewables energy needed. Reduction of 10% output by OPEC seems just the beginning. A reduction of a further 10 to 20% seems likely. 60% of offshore projects cancelled or delayed or stopped. Until a vaccine is found we shall be living in a 1,5 meter / 5ft society. In such a society there is no place for travel, hence much less need for energy. Even the renewables market will suffer tremendously. At this time we cannot see a single glimmer of hope for our sector to return to a level where the oil majors shall invest within 2020 and going into 2021. Investments which are necessary for our industry.
If we look at the developments in Oxford University and make a comparison with 2009/Mexican flu, a vaccine should be available in September/October 2020 with the pandemic declared over towards the very end of this year. We don’t know how much damage the recession will have done by then, but we can only hope to enter a 2021 where at least there is hope for recovery.
Our hearts go out to the families of those whom are affected by this virus be it through bad health or be it through unemployment.
For now as Romas we need to cut costs, work harder, longer and adapt.
Roland C. Brautigam