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Ceylon Shipping Corporation records profit after 5 years

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While most of the SOE’s are in heavy debt, successive governments have enlarged them with new employees who are unproductive making these SOE’s turnaround almost impossible.

Against this backdrop, the Ceylon Shipping Corporation who too have the same woes have made a dramatic turnaround and made a profit just when CSC made its 50th anniversary.

The mentor behind this turnaround is Chairman of CSC, Attorney-at-Law, W. S. Weeraman says that taking the right decisions at the right time and installing new thinking to their employees were two of the key pillars that led to this turnaround.

He said that CSC has the two largest jewels in Sri Lanka’s commercial landscape (Ceylon Breeze and Ceylon Princess) that are her two National Carriers which are used to transport coal. “But I have made these two jewels multipurpose by bringing in additional revenue to the CSC coffers which were not done before.

Today Daily News Business speaks to the Chairman of CSC, Attorney-at-Law, W. S. Weeraman in its column ‘MEET THE CHAIRMAN’.

Q: What were the major areas that led CSC to be in the red?

A: The main was the debt servicing for the two ships that were acquired some years ago and some local debt too.

Q: How did you manage to settle this?

A: The loan is not fully settled. However, we had huge arrears to pay and there was an accumulated interest component on the loan as well as arrears. I know to overcome this we have to use the two ships more productively and firstly to a decision to sail the ships during the peak of the pandemic from the Colombo Harbour. However, I was advised by officials not to do this since the employees would be at risk of the COVID 19 virus. However, we introduced new health protocols and successfully sailed the two ships which brought in the much-needed finances to our ‘kitty’.

I must also thank former Shipping Minister Johnston Fernando for taking a bold decision to open and function the Colombo Port even during the peak of COVID -19 lockdowns while several other ports were shut down.

Q: What were the new initiatives that were made towards this operation?

A: The Coal transport operation is seasonal (six months of the year) and I saw that to make money the ships should be in the water. Also, the freight cost was huge and I saw an opening here and commended transporting merchandise like oil, wheat and other similar commodities which opened up a new business vertical for the CSC.

Q: What are the plans concerning Ceylon Breeze and Princess?

A: The Ceylon Shipping Corporation plans to operate a Container Feeder Service between Colombo and Bangladesh and this will be followed by a second service between Colombo and Oman.

We have already approved an MoU with the Attorney General to be signed with the Bangladeshi Shipping Corporation soon.

In addition, we have successfully had talks with the Oman Ambassador in Sri Lanka to launch a feeder service from Colombo to Oman for containerised cargo as well. Since Colombo Port is attracting large shipping lines regularly our objective is to take containers out of them and reship them to Bangladesh and Oman from the two smaller vessels we plan to take on lease.

We also plan to hire two container ships that could carry around 1,000 to 1,500 TU’s to launch this operation and will soon be calling for RFP’s in this regard.

Q: What are the plans locally by the CSC?

A: We expect tourism to pick up and since Sri Lanka is an island we can exploit the ocean resources to earn more finances.

With this in mind, Ceylon Shipping Corporation Ltd joined with Sail Lanka Yachting Group’, in developing and promoting nautical tourism, cruising and yachting as well as establishing passenger transport systems by ferries. The initial focus would be to develop the Northern Province of Sri Lanka which is rich in tremendous untapped potential for tourism and its development. By developing growth strategies of this industry there is a greater potential to attract local and foreign tourists, benefitting and enriching the local economy with foreign currency.

Q: Are you looking at the cruise market as well?

A: CSC in or around 2011, had a cruise service coupled with passenger and cargo transport between Colombo and Tuticorin, which came to a standstill due to a few operational setbacks beyond its control. This segment was later tested with so many ferry services between Colombo and India, but they too failed. But we found out the grey areas for their failures and will now launch a Luxury Passenger Service between Mumbai Maldives and Colombo providing air connections as well allowing passengers to join from any of the three Ports.

The destinations selected by us will attract not only Sri Lankans but foreigners as well and I believe it will be a success.

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History of CSC

Established in 1971 under the Shipping Act, the Ceylon Shipping Corporation, under the guidance of the first female Prime Minister of Sri Lanka, Srimavo Bandaranaike and led by Minister of Shipping and Tourism, P.B.G.Kalugalla, paved the way for Sri Lanka to enter the global shipping sphere – a milestone in the annals of the history of Sri Lanka.

The first vessel, Lanka Rani and the subsequent fleet; Lanka Sagarika, Lanka Devi, Lanka Shanthi, Lanka Rathne and Lanka Keerthi were purchased with the support of the German Shipping magnate, Vnimar Gesselshaft GMBH of Hamburg. While the acquisition of Lanka Kalyani and Lanka Kanthi were made through sponsorship by the government of China. Subsequently, the corporate merger of the Ceylon Shipping Corporation and the Lanka Tankers Ltd was instrumental in acquiring the oil tanker, ‘Tammanna’.

During his tenure as Minister of Commerce and Industry, the late Minister Lalith Athulathmudali rendered an extensive albeit pivotal to the progress and sustainability of the industry as a whole. Despite persistent challenges, the corporation faced a severe blow, yet the fifth Executive President, Mahinda Rajapaksa took bold steps in reviving the floundering corporation which did not own any ships to being the owners of its largest fleet during his rule.

The acquisition of the vessels, Ceylon Breeze and Princess were utilised to transport charcoal for the Lakvijaya Electricity in Puttalam. The ships were also used for commercial purposes during the onset of the southeast monsoons. Apart from its dual functionalities, the ships which belonged to CSC functioned as a Maritime University, providing a yeomen service to the Sri Lanka Navy.

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