Investor Oaktree makes project cargo pivot to Watco

Investor Oaktree makes project cargo pivot to Watco

Industrial Terminals Houston.

Industrial Terminals, on the Houston Ship Channel, is a privately held, dedicated project and heavy-lift terminal now owned by Watco Companies and partner Oaktree Capital Management. Watco also owns adjacent Greens Port. Photo credit: Zeamarine.

Despite a long, ultimately failed relationship with Hansa Heavy Lift that ended in ship arrests and a bankruptcy filing in German courts, Oaktree Capital Management has taken another plunge into the project cargo world, via a partnership with Watco Companies. This venture will be land-based, however.

Oaktree, primary shareholder of now-insolvent ocean carrier Hansa Heavy Lift, in January became a key partner with Kansas-based transportation provider Watco Companies. California-based Oaktree, which manages $124 billion in assets overall, has invested $450 million in non-controlling equity capital in Watco, according to a statement from the company. In early 2018, Watco Companies bought the terminal assets of Industrial Terminals, a specialized heavy-lift and breakbulk cargo facility on the Houston ship channel, from multipurpose/heavy-lift (MPV/HL) carrier Intermarine.  

At the time of the sale, Watco agreed to continue to provide dock and terminaling services for Intermarine through an agreement with long-term service provider Gulf Stream Marine, according to Watco. Shortly afterwards, Intermarine entered a joint venture (JV) with Hamburg-based carrier Zeaborn, forming Zeamarine.

Industrial Terminals — Greens Port Industrial Park in Houston

Watco also owns and operates Greens Port Industrial Park, adjacent to Industrial Terminals on the Houston ship channel. Houston is the largest project and breakbulk cargo port in the US. Watco is one of the largest short-line rail transportation service providers in the US and Australia, owning 41 short-line railroads. Its terminal and port services group operates 86 terminals throughout the United States and Mexico. Watco also owns a mechanical services group and a supply chain services group, according to the company.

Industrial Terminals includes 90 acres of marshaling and storage area, three deepwater berths designed for heavylift and breakbulk cargo, a barge terminal, and rail and truck access alongside the ship berths. Greens Port includes 655 acres, 3 million square feet of warehouse space, and deepwater barge and vessel berths. Greens Port is connected to Union Pacific, BNSF Railway, and Kansas City Southern, according to the company.

Zeamarine was formed in May 2018 as a JV between Zeaborn and Houston/New Orleans-based Intermarine. The JV operates a fleet of approximately 85 vessels with lift capacities of up to 1,400 metric tons (1,543 tons), has several newbuildings ordered, and plans to increase its fleet size further. Zeaborn, established in 2013 and based in Bremen, Germany, became a major player in the MPV/HL sector through the 2017 acquisitions of Rickmers-Linie, the heavy lift/project cargo unit of the financially troubled Rickmers Group, and of the German ship management company ER Schiffahrt. It also owns MCC Marine and NPC Projects.

Contact Janet Nodar at janet.nodar@ihsmarkit.com and follow her on Twitter: @Janet_Nodar.