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Tristar Group defies pandemic, confident of promising outlook

Muzaffar Rizvi/Dubai
Filed on September 12, 2020 | Last updated on September 12, 2020 at 09.40 pm
Eugene Mayne says Tristar did not experience anything majorly disruptive to uts business.

(Supplied photo)

Dubai-based company affirms IPO is part of growth strategy and details will be shared in due course

Tristar Group sees a promising outlook despite the coronavirus pandemic and a slowdown in the global economy, and says the group has a "resilient business model" built on long-term contracts, its top official said.

The Middle East logistics firm received delivery of a third vessel in July this year from Hyundai Mipo Dockyard in South Korea and is confident of achieving strong growth in the coming years.

The Dubai-based company affirmed that an initial public offering (IPO) is part of its growth strategy and details will be shared in due course.

"Getting listed is part of our longer-term growth strategy. We are working through the process and will provide updates in due course," Eugene Mayne, group founder and CEO of Tristar Group, told Khaleej Times in an interview on Saturday.

It was reported earlier that the company was seeking a valuation of more than $1 billion in a share sale that could raise as much as $400 million.

Tristar is a subsidiary of Kuwaiti logistics firm Agility Public Warehousing. It is headquartered in Jebel Ali Industrial Area and operates in 20 countries, offering transportation and storage services for the petroleum and chemicals industries. Its major customers include Abu Dhabi National Oil Company, Total and Dow, among several others.

No Covid-19 impact

Mayne said Tristar has not experienced any major setbacks in 2020 due to the pandemic and is likely to end the year on a positive note.

"We did experience some segmental challenges due to the overnight crash in oil prices and the measures adopted by various governments to contain the pandemic, but we did not experience anything majorly disruptive to our business," he said.

"We saw a slowdown in our cross-border logistics movements due to mandatory quarantining of drivers at border crossings. However, our maritime logistics business benefitted in the first quarter due to the strong tanker market. Our fuel storage business was hardly impacted due to our take-or-pay contract models," he added.

On the maritime front, he said Tristar's business has grown, and as the group expand its operations with new long-term contracts with oil majors, "we expect it to grow further. We have also just taken delivery of a series of new vessels that were contracted in 2018".

"In short, our business model is extremely resilient."

2019 performance

Mayne said 2019 was a good year for the group as it signed several new long-term partnerships and initiated discussions on several pipeline opportunities that will ensure growth for the group in the coming years.

"For the short term, we will continue to focus on strengthening our integrated logistics model by looking for key acquisitions in our areas of interest and ensuring our organic business continues to grow annually in double-digits," he said.

"Despite the global pandemic, our integrated business model is resilient as it has been built on long-term contracts. We will continue to develop and grow this model - a strategy which has worked well for us over the last 20 years."

Challenges

Mayne was confident about the future of the group's shipping business and said it has a bright outlook. "Our maritime business has grown, and as we expand our operations with new long-term contracts with oil majors, we expect it to grow further. We have also just taken delivery of a series of new vessels that were contracted in 2018."

On oil prices, he said as the world recovers from the pandemic and global traffic returns to normal, the demand for the commodity should come back to pre-pandemic days.

"Oil price is a function of supply and demand and therefore oil prices should pick up as the global economy recovers," he said.

Tech integration will always be key

Mayne said the integration of technology is "very important to the group and the management is constantly working to find the newest technology that is both efficient and cost-effective for our current and future projects".

"At the moment, we are looking at robot processing automation and artificial intelligence solutions to help with predictive maintenance and forecasting analysis which will ultimately increase performance and efficiency. We are also looking at smart ship technology on our ships to better improve operating costs on our marine assets," he added.

On the outlook for the economy, Mayne said the environment in Dubai, as in other global markets, is uncertain right now. However, from a logistics industry point of view, the fact that borders are slowly opening is positive news and "we are seeing a gradual return" to pre-Covid levels of operation.

"We are confident that the local market is well positioned for long-term recovery due to the strategic initiatives implemented by the UAE government, and we look forward to contributing to the country's economic recovery."

- muzaffarrizvi@khaleejtimes.com



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