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Pooling agreement expected to bring continued success.

Pooling agreement expected to bring continued success

The success of Algoma Central Corp.'s marine division is expected to continue this year, but on a lesser scale than in 1990, according to the division's controller.

Greg Wight attributes the success of Algoma Central Marine (ACM) to last year's pooling agreement with the American firm ULS Corporation. The arrangement combined Algoma's six bulk carriers with 10 operated by ULS, creating a 16-vessel fleet.

The deal has allowed Algoma to use its six bulk carriers more efficiently, Wight explained.

"Because of the cargos available to the pool, we have access to a large amount of iron ore that is coming down from the St. Lawrence," said Wight.

The iron ore being shipped by the pool originates from mines in Quebec and Labrador.

The key factor behind the signing of the agreement was Dofasco's decision to cease operating the Adams and Sherman mines in northeastern Ontario.

Wight predicted that the volume of goods being shipped will decline this year due to the recession and to the reduction in grain shipments from Thunder Bay.

He added, however, that Algoma's self-unloading carriers will help to buffer the company from the downturn.

Algoma invested $32 million over the past two years in the conversion of two bulk carriers to self-unloaders. The company now operates 12 self-unloaders, more than any other Canadian-owned company.

"The bulkers are tied to the success of grain crop sales and the sales efforts of the Canadian Wheat Board. The self-unloaders are more competitive," explained Wight.

He added that some of the company's remaining bulk carriers are currently laid up because of the decline in grain shipments.

It is hoped, however, that the grain industry will show some signs of recovery this year.

Algoma's self-unloading vessels can carry such commodities as iron ore, coal, limestone, salt, sand and gypsum, and they are operating at full-capacity.

Three of the self-unloaders have certificates allowing them to trade beyond the inland waters of the St. Lawrence. One can service St. John's Nfld. and St. John N.B., and the second can service the eastern seaboard of the United States, the Caribbean and the western coasts of both Canada and the U.S. The third vessel can trade worldwide.

Algoma is the second-largest carrier operating on the Great Lakes, and it employs about 550 people at full production.

Algoma Central Marine has become the single-most profitable division of Algoma Central Corporation.

"It's the largest revenue producer in the company," said Wight. "The division generated revenues of $121 million last year."

In addition to its fleet, the marine division also operates of a ship repair facility in Port Colborne, Ont., a technical supply group specializing in marine consulting and design, and a controller marine group which makes the necessary arrangements for the one self-unloader to operate in the Caribbean.
COPYRIGHT 1991 Laurentian Business Publishing, Inc.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Focus On Sault Ste. Marie; Algoma Central Marine combines its bulk carriers with those operated by ULS Corp.
Author:McDougall, Douglas
Publication:Northern Ontario Business
Date:Apr 1, 1991
Words:471
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