World Bunkering > News > Autumn 2009 > FAL - looking for further growth

Dubai Sharjah Border

SB: The FAL group has been around for almost four decades now in the Middle East region. Having been established in 1969 with a head office in Sharjah, UAE, it has grown through the years to become one of the leading independent business groups in the oil industry and also is a dominant player in the oil trading and bunkering businesses of the Gulf Region. FAL Oil has expanded widely through internal growth and has grown as a mature oil trader by developing its trading wing since the 1980s and can be proud of the continuing achievements it is making.

The FAL Group consists of three major companies established to give its customers a complete operational service, namely: FAL Oil Company Ltd – Primarily engaged in bulk buying and trading of oil and related products in cargo lots. It has become a leading oil company in the Middle East with a marketing office in London and Singapore.

FAL Shipping Company Ltd – Engaged in facilitating the above operations as well as the chartering, purchase and sale of vessels. Owning, operating and managing a fleet of over 30 tankers, ranging from 1,000 dwt to 260,000 dwt. It is an independent entity that arranges the chartering of both its own vessels and those of other principals. The whole fleet is maintained under the strictest standard class and with ISM Certificates. The company is also equipped with a fully fledged workshop for maintenance and repairs of their vessels. This enables them to cater to the requirements of the cargo as well as bunkering operations of its sister companies.

FAL Energy Company Limited is the longest established and largest bunkering company in the Arab Gulf and Gulf of Oman. Over the past 10 years, it has established itself as an important bunker player with a major share of the marine market in the area. Due to the strategic location particularly Fujairah and Khorfakkan port on the Gulf of Oman just south of the Strait of Hormuz, UAE, it has positioned itself as one of the largest on shore and off shore bunkering centres. FAL also owns an offshore facility of 260,000 tonnes and other onshore storage facilities of over 200,000 tonnes and two loading oil terminals in the region, namely at Al Hamriyah, Sharjah and Jebel Ali. Additionally, FAL has leased storage facilities at Vopak, Fujairah with a capacity of 180,000 cubic meters.

Fujairah’s current status as Singapore’s leading contender is all the more impressive by the speed at which this growth has occurred. With offices in Sharjah, Khorfakkan and London linked by a state-ofthe- art communication system, FAL is able to provide its customers with a 24-hour service of the highest standard.

DH: Has the strategy changed over the years?

SB: FAL Energy UK Ltd, FAL Oil UK Ltd and lately FAL Oil Asia Pte Ltd (Singapore) have been contributing to the success and exploring newer markets.

FAL Group also has several other major companies involved in such diverse activities as storage, domestic sales and the blending and distribution of marine, automotive and industrial lubricants to position UAE as an oil hub of the region.

DH: What are FAL’s main strengths?

SB: The FAL group’s strength comes from the length of time it has been established in the Middle East Region. Its strong trading partnerships in the Gulf Region have ensured long-term contracts with all the major oil refineries and producers in the area. FAL’s commitment to building a modern fleet of tankers to service the area’s requirements has ensured that it is able to provide a quality of service that remains unmatched.

The company has a major network of suppliers in the SE Asian regions and holds term contracts with many of the leading refineries in the Arab Gulf Region.

FAL Oil Co Ltd has enhanced its market presence with the opening of its new offices in the UK and Singapore. This has helped FAL to venture into newer and prospective markets. FAL’s bunker operations have grown to considerable volumes during this period, and we can now lay claim to being possibly the largest single point bunker operation in the world.

FAL Oil Co Ltd is the largest independent oil and bunker trader in the Gulf Region with total volume sales increasing year over year. Historically FAL has been very strong in fuel oil; however, lately it has expanded and is very active in trading other refined petroleum products and crude oil.

DH: You are continuing to expand both in the Middle East and elsewhere. How do you see the balance between your trading, bunkering, services and shipping developing?

SB: The operations of FAL in the UAE are complementary to the proposed operation in Singapore and other areas due to synergies in sale and marketing, procurement and delivery. We aim to:

• Increase sales volumes by 7% in the first year, and by 4% thereafter for the next four years;
• Diversifiy products and services and try to meet the changing needs of the global market;
• Be socially responsible in terms of staffing, environmental protection, corporate ethics and transparency;
• Develop total solutions for shipoperators globally and locally;
• Create the concept of a “One Stop Centre” and provide other complementary services, including marine service, fresh water supply and ship chandlery, surveying facilities, channelling, crew changes and support, and other value added services;

We are continuing to expand our fleet and have ordered four aframaxes, two each from Hyundai and Sumitomo, that will be delivered at the end of this year.

DH: How has the recession affected the bunkering business in the Gulf ?

SB: There has been slow down in business including bunkering due to less export of crude oil and refined products from the region. This has been in line with global slow down and should not be a worrying factor as it will recover as soon as other markets start to pick up.

DH: Do you see increased demand for low-sulphur fuel for vessels bound for Europe or, later, the US ECAs being a problem for Gulf Region suppliers?

SB: Recently in general we are providing ISO8217:2005 standards in our area which allows us 4.5% max sulphur; however, we do stock low-sulphur fuel oil and supply regularly to those shipowner’s calling at USA and SECA regions.

DH: Do you see major changes to the bunker market in the Gulf region, with more supplies for example coming from Iran?

SB: FAL believes in competition. Its creates more opportunities in the region. Moreover, shipowners and traders can access difference in services provided by other competitors.

DH: What do you see as the challenges facing bunkering generally and large independents like yourselves specifically over the coming few years?

SB: Well, I don’t think supplying enough low-sulphur fuel oil will be one of them. I believe more and more refineries will start producing that grade. I have been in this industry for the past 30 years and I believe we need to adopt our policies to challenges as they come along, otherwise you get left out.

DH: What can you say about FAL’s current plans?

SB: There are three overall objectives:

• To contribute to the national growth of the UAE by way of establishing international business links.
• To be a major operator of onshore storage and terminal facilities allowing it to make its presence felt in the upcoming commodity market of the UAE.
• To be a respectable shipping company in the Middle East region, supporting our oil trading arm.