LASCO to overhaul fleet

Latvia's largest shipping company, Latvijas Kugnieciba (LASCO), plans to replace its tanker fleet over the next seven years, according to the company's 2003-2010 strategy report recently approved by shareholders.

Company President Imants Vikmanis said the strategy was based on market research and the fact that LASCO's tanker fleet is the company's most profitable division.

LASCO Deputy CEO Girts Rungainis told journalists that the company plans to invest about $300 million over the next seven years.

The company hopes to raise the money through a combination of bank loans, investors and existing funds.

LASCO's long-term strategy is to remain among the world's six leading medium-size tanker fleets and hold its leadership position on the North European market.

To do this, the company has three main objectives. First, the company wants to form a joint venture that would fund the replacement of the tanker fleet, which will require about 10 new and slightly used medium-size tankers.

Second, the company also wants to sell all of its refrigerator ships by the end of 2005. It will also trim other ships from its fleet, including two gas carriers and a dry cargo vessel.

Proceeds from the sale of these ships will be used toward the replacement of the tanker fleet.

Third, LASCO wants to shed business interests it owns that are not directly related to shipping and to move its administrative offices.

As of earlier this spring, LASCO had 52 ships in its fleet, including 36 tankers with an average age of 18 years.

The fleet will also be affected by impending bans on single-hulled ships that the European Union passed earlier this year. The EU passed the ban after the tanker Presitge wrecked off the coast of Spain, spilling millions of gallons of oil.

LASCO's aging fleet could prevent the company from getting contracts in the future.

The formerly state-owned company is now majority owned by the oil transit company Ventspils Nafta, whose fate is also under question. (See story on Page 7.)