[Sponsored Report] STX Pan Ocean inks $5B deal

Bae Seon-ryung, CEO of STX Pan Ocean, and Carlos Augusto Lira Aguiar - CEO of Fibria, the world’s largest pulp company - pose after signing a 5 billion dollar, 25-year contract.

Korea’s largest bulk shipping company, STX Pan Ocean, has made significant inroads in the global pulp transportation market by securing a large consecutive voyage contract (CVC) with the world’s largest pulp and paper company.

STX Pan Ocean announced the $5 billion deal with Brazilian pulp giant Fibria on Oct. 18 at a signing ceremony held in Sao Paulo, Brazil. Officials in attendance for the event included Bae Seon-ryung, CEO of STX Pan Ocean and Carlos Augusto Lira Aguiar, CEO of Fibria. Under the contract, STX Pan Ocean will transport all of Fibria’s wood pulp exports over a 25-year period starting in 2012.

Producing roughly 6 million tons of pulp and paper each year, Fibria controls roughly 30 percent of the global market and generates net revenues of about $4 billion annually.

At the beginning of the year, STX Pan Ocean restructured the organization of the company to reflect its new approach and focus going forward. As part of this move, it divided the tramper division into two geographically specialized businesses: the Atlantic and Pacific markets. Additionally, STX Pan Ocean developed a “total solution” system for marine shipping, shipbuilding and machinery. This system helped STX Group win a 7 trillion won deal with Vale, the world’s largest iron company.

The contract with Fibria gives STX Pan Ocean a chance to become the global leader in the transportation of wood pulp and sets the stage for further growth in the future.

The company hopes to successfully penetrate the worldwide pulp transportation market - which is currently dominated by European shipping companies - along with steel-focused transportation. Moreover, the company has secured a stable source of revenue, as the CVC spans 25 years.

“STX Pan Ocean’s marketing and operation capabilities are proven in the worldwide market,” an official from Fibria said. “We expect that STX Pan Ocean will provide us with stable shipment services over a long period of time and hope that this contract will be a win-win situation for both sides.”

“This is a result of our moves to seek out new business opportunities and develop strategic business models between shippers and carriers in Brazil and China,” Bae said. “We will put all of our efforts into strengthening our marketing power all around the world to become a global shipping company using all our know-how and overseas networks.”

STX Pan Ocean has been concentrating on finding new business in the global market and has achieved remarkable growth over the years.