SMITen’ with Minette

To most industry watchers in the area, this little blurb on SMIT’s takeover of Prince Rupert based Minette Bay Ship Docking probably comes as no surprise. Rotterdam based tug and salvage giant SMIT, gained a foothold in Canada when it acquired the assets of Rivtow, back at the turn of the millennium. Fledgling at the time, Rivtow was a shadow of its former self, but remained an icon of the west coast tug industry.

It appeared that SMIT took more of a “hands off” approach to the BC operations, for several years. To many, the take over seemed to be more about having a base of operations on the western north American coast, in anticipation of oil and gas activities in the area. But with this acquisition, it would appear that Smit is very serious about its Canadian port operations and willing to invest it the region.

A couple of years ago, changes began to occur at the Vancouver office. SMIT imported the Smit Clyde from Rotterdam, and put her to work at the new container port in the northern BC city of Prince Rupert, where Smit already had several smaller tugs based there, and in Kitimat – mostly serving the forest industry. Several months later, Damen Shipyard built sister ship, Smit Mississippi, was repositioned from Panama to Vancouver. Both vessels are considerably newer than most tugs on the coast, featuring large horsepower ratings and versatile z drives.

Meanwhile, Minette Bay of Prince Rupert, had long operated two distinctive harbour tugs, TP1 and TP2 (3560bhp – 1xMLW-ALCO 251f-16 1100rpm driving two Niigata Z drives mounted in
line, fore and aft), in the port, performing ship berthing for the coal, grain and forestry products being shipped from the city.

In 2008 a new tug was delivered to the company from Washington State’s Nichol Brothers Boatbuilders at an estimated cost of $10 million USD. Pictured, top and bottom of this post. Sporting 4,476kW of power inside its 85 foot long hull, Minette Bay’s TP3, I’m sure, was an irritant to Smit diversification plans, from forestry based activities at its Canadian operations (its primary source of income, economic crisis notwithstanding), to a more traditional SMIT enterprise, ship docking.

Although this acquisition is subject to regulatory approval, I think it represents a significant boost to SMIT Canada’s operation, and will become a major part of its portfolio in the region. Prince Rupert, in the last couple of years as seen dramatic upward swing in its port activity, pushed along by buoyant trade in boxes and raw material in the last few years. Of course these are currently under pressure from the worldwide economic downturn, but operations are well established in the port now, and down turns are not new to the area.

Probably the big story from this, is the near by port of Kitimat and its considerable expansion plan focused on energy import and export and how that affects the dynamic of the two principal tug operators on the coast. If the deal for Minette Bay goes through, SMIT is well positioned in the northern ports of BC, with lots of horsepower, local knowledge and international reputation.

This will of course put a fair bit of cold water on Vancouver based Seaspan International’s expansion plans for the region, floating for several years now. I suspect Seaspan is suffering numerous issues with cash flow and its ability to fund vessel revitalization plans, which I think must be getting to be a serious concern for the aging Seaspan fleet. Meteoric rise of Seaspan in the container ship business, and that sector’s current woes, is undoubtedly putting financial strain on the parent company, the Washington Marine Group, so I suspect the “little coastal fleet” is at the end of that table.

Below is the press release from Smit…

SMIT acquires Minette Bay Ship Docking Ltd in Canada
Rotterdam, 19 March 2009

On Wednesday 18 March 2009, SMIT entered into an agreement to acquire all shares of Minette Bay Ship Docking Ltd in Prince Rupert, Canada. Minette Bay is active in the port of Prince Rupert with three ASD tugs. Minette Bay honorably performed the shipdocking services for Ridley Island Coal Terminal for 25 years. This acquisition enhances SMIT Marine Canada’s current harbour towage operations on the West Coast of Canada. The acquisition is still subject to approval of authorities under the Investment Canada Act.

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