Tropical Shipping Profile
Containerized shipping in Caribbean and Bahamas
Niche player in the Caribbean
High market shares in ports served
Notes:
Tropical Shipping is the leading carrier of U.S. exports from the East Coast to the Caribbean and is one of the largest shippers of containerized cargo in the Caribbean region. The company is a niche player with leading market shares in most of the ports it serves. Its competitive advantage is its reputation for on-time, high-quality service.
Nicor has owned Tropical Shipping since 1982, and it contributed 10% of Nicor’s total earnings in 1999. We are often asked why we have retained ownership over the years since it has little to do with the energy business. The primary reasons include the fact that it continues to be a very profitable business, it generates good cash flow, and it has an experienced and capable management team that provides for continuity. It also provides us with an element of profitable diversification in a very competitive business, which helps us better understand and manage carefully the risks of diversification.
We also believe there continues to be good long-term growth potential at Tropical, and that we can continue to earn higher returns there than we could by re-deploying our capital to alternative investments more closely related to the energy business.