During the year, our chemical business had renewed multiple contracts with oil majors and leading chemical manufacturers. These renewals had helped the chemical business segment to reduce its exposure on the weak cargo demand. As part of our business portfolio rebalancing efforts, we had undertaken a fleet rationalisation initiative to reduce our fleet size and focused on cost optimisation while maintaining operational excellence. During the year, we disposed of four (4) Bakawali class vessels and three (3) Kantan class vessels which helped to reduce the impact from the challenging chemical tanker market. We have increased our presence in Intra Asia, a niche regional market, where the earnings have improved as compared to the previous year. Stable freight rates are seen for both chemical and palm oil shipment which is in line with our strategy to continue focusing in this niche regional market. As for the 2015 outlook, the chemical segment remains lacklustre and challenging. The growth rate in the total seaborne trade for chemical products is expected to be slower in view of weaker demand from key importing economies whilst the vegetable oil sector is expected to remain stable. It is also observed that many plans for new petrochemical plants have been deferred and this can further dampen any upside to the earnings in this segment. Moving forward, our chemical business segment will continue to focus on its targeted niche and specialised chemical and palm oil shipping market. p 63 MISC BERHAD - Annual Report 2014
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