Transportation
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FESCO Group
In 2H2002, Industrial Investors acquired a controlling stake of the FESCO – Far East Shipping Company (www.fesco.ru)
When FESCO has been acquired, it market capitalization on RTS, the Russian stock exchange, was approximately US $42 million. At the 2007, it has reached US $2 billion demonstrating significant added-value created through an in-depth restructurization by Industrial Investors.
In addition to being Russia's largest bulk and container shipping company as well as a leading ice-breaking service provider, FESCO is also Russia's largest container operator.
In 2004, FESCO signed a 14 years service agreement with ExonMobil to provide them with ice-breaking oil transportation in the Russian Far East in support to their massive Sakhalin oil production venture.
Integrating a dominant position in container and bulk transportation all over the Pacific basin with 65% to 85% of all the Russia-Asia routes (China, Japan, Korea, Vietnam, New Zealand, Australia, USA, etc) to the ability to deliver any container all over an 11-time-zone country like Russia opens us the opportunity to act as a one-stop shop in a transportation market strongly supported by fast domestic and international trade.
In addition to significant potential for growth and for the creation of economies of scale, we are also targeting part of the US $900 billion Asia-Europe transportation market.
In 2004, FESCO launched a joint venture with the Russian Railways called Russkaya Troyka (RT). RT is a state-of-the-art container railway car operator allowing any container from any point in Russia or in the world to be delivered to any point within Russia alongside a 4,5 million kilometers railways network creating a container transport transit link between Asia and Europe through Trans-Siberian railroad.
This company will help significantly cut the transportation transit time and cost and will become an important player in container Asia-Europe markets.
To make this and other project more attractive we buy and plan to create Intermodal terminals as the key transshipment hubs between railroad and sea.
In 2006 FESCO acquired 50% in National Container Company (NCC), Russia’s largest container terminal operator. NCC has dominating position in Russian Baltic container ports (over 60% market share with First Container Terminal), strong position in Black Sea (Novorossiysk, Ilyichevsk) and builds CIS’s biggest Ust-Luga Container Terminal.
Since 2007 FESCO controls «Transgarant»-group — Russia’s 4th largest private rail company with excellent team of talented professionals.
«Transgarant» provides a variety of services in railroad transportation of industrial cargo.
«Transgarant» operates a diversified fleet of over 15 thousands railcars, including boxcars, inter-modal double stack railcars, hoppers, grain carriers, tank cars and others.
«Transgarant» transports cargo on 15 out of 17 railroads of Russia, as well as in CIS countries. The company has a network of rep offices and subsidiaries in 20 cities in both Russia and CIS.
In 2007 FESCO acquired 70% in ESF Euroservices, a container feeder company in the Baltic Sea with line services calling major ports in Europe, Baltic States, Scandinavia and Russia, and 50% in Vladivostok Commercial Port (VCP), the main port in FESCO hometown Vladivostok.
VCP has one of the only two large container terminals in the Russian Far East (50% ownership through the port) and started ambitious development program of new specialized terminals (container, automotive).
DEXTER
Dexter project is aimed at creating a nation-wide network of direct flight connections between Russian cities and towns with operational airports, where there is no scheduled direct flights or they are irregular.
The project involves the establishment of cargo and passenger airlines, providing shuttle and on-demand air-transportation services.
Safety, comfort and time-efficiency are the main features of this unique air-service.
The Russian airspace holding Kaskol (www.kaskol.ru) is the key co-investor in this project, together with Industrial Investors.
The project includes pilot and ground personnel training programs, as well as development of service and maintenance infrastructure.
The project will play an important catalytic role in re-establishing and increasing efficiency of direct air communication between many regions of Russia.
Also, the project will have a positive impact on the Russian aircraft manufacturing industry and suppliers, supporting airport infrastructure in many cities of Russia, demonstrating the benefits of innovation and international cooperation to the domestic aircraft manufacturers and offering new creative approaches and best practices to the air transport sector.
IFC will be a source of long-term financing in the form of quasi-equity. IFC's participation will significantly improve the project's ability to attract debt financing at terms and with maturities required for the successful implementation of the project. IFC has approved the following potential environmental, health, and safety impacts of the project:
- aircraft operations safety and emissions and noise;
- maintenance-related hazardous materials, effluents, and wastes management;
- employee health and safety.
VELVET SKYLINES
Velvet Skylines executes on-schedule non-stop charters from Moscow to major European business and leisure destinations (London, Kiev, Pisa, Cannes, Olbia, etc) with the comfort and privacy of a business jet: private air travel on a 13-seat Legacy-600 and a 15-seat Challenger 850; business aviation terminals on departure and arrival
Velvet Clients’ flights provided on per seat basis only: no need to hire the entire airplane; individually assigned seats per flight/ per season, 3-4 seat compartment reservation by request
Velvet uses club approach in sales and marketing: no open public offerings, no media advertisement, exclusive PR events
All aircrafts are 100% ownership of Velvet Club registered in Germany. Velvet’s operator is a German company ”Cirrus Aviation”, all aircrafts serviced by German pilots and Russian cabin attendance.
Industrial Investors is currently analyzing several additional investment opportunities, which would fit ideally into this global transportation matrix.
Industrial Investors probably aligns the sharpest edge in Russia in terms of transportation know-how from a financial and operational point of view. Industrial Investors are able to address any technical, operational or financial issues with proven experience and track record in this sector in order to create added-value for its investors.