Towage group Adsteam Marine Ltd unveiled a $55 million investment in an Alaskan barge group last week, a move, which was reportedly designed to drive further growth through a foothold in what many perceive as the fragmented United States market.
Adsteam also reported a 44 percent rise in net profit to A$11.44 million, said it was still on track to improve its full year earnings on 1998/99's A$17.12 million net profit. "We are ahead of the same stage last year and we expect to exceed last year at every line," managing director David Ryan said, although he declined to give more details.
Ryan said Adsteam, Australia's largest marine towage operator, had taken a 50 percent stake in the privately-held, Seattle-based Northland Holdings Inc -- its first major international move and largest acquisition since its 1997 A$160 million float.
Other than the U.S. he sees opportunities in Australia in pilotage, port privatization, and harbor towage, as well as in New Zealand and the Pacific.
Through its Northland Services
, Yutana Barge Lines
, and Service Oil & Gas divisions, the group provided common carrier, contract barging, and transport and fuel distribution services between Seattle and Alaska.
Ryan said Adsteam had opted for a partnership rather than a takeover in the U.S because of its considerable experience with joint ventures in Australia and because many Australian companies got "clobbered" in the U.S if they had no local knowledge.
"All future activity in the U.S will be based throughout Northland," he said, adding that he did not see "a perceivable problem" for financing from Adsteam's partners in the early days, even though it was a privately held company. However, he conceded there could be difficulties if the joint venture grew and considered bigger U.S. acquisitions.