Harry Vafias

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Harrys Vafias: The ambitious CEO of Brave Maritime Corp, Stealth Maritime Inc. & StealthGas Inc.

July 2014

Tell us about your role as CEO?

At the moment I am wearing four different ‘hats’ at the same time. I am the CEO of Brave Maritime, the oldest company in the Group, established in 1972. This is the dry bulk branch of the Group. It owns eight brand new bulk carriers and they had sold the majority of its fleet, 16 ships, between 2004 and 2008. Now we have restarted the company with new ships.

I am also the CEO of Stealth Maritime, which is the tanker company of the Group and which I founded in 1999. That company has 22 very modern oil tankers, half being crude carriers and the other half carry clean petroleum product.

Last but not least, I am the CEO and CFO of Stealth Gas, which is a company listed on NASDAQ for the past nine years. It has about sixty gas carriers, including 17 vessels under construction, mainly in Japanese shipyards. So I am concurrently running three separate shipping companies.

How would you describe yourself in one word?

Ambitious.

How would one of your peers describe you?

I hope that they would describe me as difficult but fair.

Tell us about a time when you realised you had the power to do something meaningful for both the Company and the society.

The turning point for me was when I was given a small amount of money from my family in 1999 to start my own tanker company. I was very young, 21 years old, and I was given some money to start my own operation and it was a very difficult time for me because, on the one hand I was happy and excited that I was starting a new thing but on the other I was scared because I knew that if I made a mistake and did not do well I would lose the family’s trust and go back and work for the family business. Fortunately I did well from that point on so I did not have to return to the family business and could proceed on my own doing my own thing. It was a combination of ambition, hard work and luck, because without a little bit of luck you can never succeed.

Did you have any experience when you started?

I had little experience because at that time I was at university and working part time. Before that, from the age of 14 I would go to my father’s office for two months every summer and I was very young and it was not the same as working full time at a proper job. I did not have proper experience but I had good people around me to help me and advise me, especially in the beginning.

What was the hardest point?

The hardest point was in 2000, in the beginning, when I had started my tanker company and I had two very old, single hull tanker vessels. At that time the tanker “Prestige” sank in Spain polluting a lot of the country’s coastline. As I had similar ships, I was afraid they would not be in demand anymore because no one would want to contract very old single hull tankers. For a couple of months the market was dead for this type of ships but I was fortunate because the market picked up and we made a lot more money than we had estimated.

What was the most satisfying part during that period?

My greatest satisfaction came when I put Stealth Gas on the stock market, because we had a very long road show in which we visited 22 cities in 28 days. I got an award from NASDAQ for being the youngest CEO of a listed shipping company back in 2005 when I was 27 and the company was only nine months old. We succeeded in selling 50% of the company for $120 million. So for me that was the happiest and most successful time in my brief career.

What are the three main things you have learned over these years of experience?

I have learned that debt is very dangerous so you should not have too much debt, because in the bad times it is debt that can kill a company. Secondly, I have to contain my ambition, because ambition is a good thing that drives you but it also causes you to make mistakes as you continuously work on your projects, which is not always a good thing. You have to be ambitious but with certain limits. Finally, you have to be very careful with the people you choose to be around and work with. You have to be careful when choosing partners, employees and managers because at the end of the day their work and their reputation affect you directly. If they don’t do well or make a serious mistake then usually, it’s me that has to pay.

Tell us three things that you have done right and for which you are proud?

One is that I started my own company at the young age of 21. It was the right decision and the right timing in the right segment. Secondly was the decision I made to sell the majority of that company, Stealth Maritime, in 2004. It was close to the peak of the market and we made a very nice profit. Finally, the decision to diversify into gas was very positive for us. Shipping has become a very competitive business and you have to choose specialised niche segments that avoid a lot of competition. If there are a lot of ship owners in the segment the increased competition pushes freight rates down. I chose gas, which was a much more ‘closed’ business and is far more exotic. As a result I had very little competition. Now, by Q3 2015, Stealth Gas will be in control of 25% of the global market in short haul transportation of gas.

That would be your crowning achievement. For someone who works so hard, what would be your motivation to get out of bed every morning?

For me, work is my love affair. I have been working non-stop since a very young age; it is part of my life. I don’t care so much about the money because if you have $50 million more or $50 million less, at the end of the day it does not change your life. You still have the same family, the same house, the same car; it doesn’t really make a difference. It’s a matter of ambition and success. You feel well when you set a goal and you achieve it. I have this ‘bug’ inside me; sometimes it is a good thing and sometimes it’s a bad thing. When I set a goal and then achieve it, I immediately set another goal. I cannot stop and rest and enjoy my previous success. Sometimes it is a bad thing because I don’t enjoy the moment and I don’t have a lot of spare time to enjoy with my family. I am checking my email on my Blackberry 24/7, but I guess this is part of running a commercial group with three different companies and a total of 90 ships. You have to be in love with your work and your email otherwise, you will make mistakes.

I don’t complain. I have chosen this way of life. My family sometimes complains and that is reasonable because they don’t see me as often as they like but you cannot have everything in life. You can’t be a successful businessman, run a lot of companies and have a lot of time for family; you can’t have it all and it’s a give and take. I have chosen this type of life and I have to bear the consequences.

‘’I will give you an example from real life. When my father, who also worked very hard, saw that I was also working hard and could be a good successor to his business, started gradually working less and in the end passed the majority of the businesses onto me. If I am lucky and blessed to have children who are as good as or better than I am, I guess I will also gradually give more incentives to my children and hope that they can run the business. Then I can have more free time. But it is too soon to say.’’

What would you say was the best advice that someone ever gave you?

I got a tip from my grandfather, who was a self-made man. He started with $3000 and ended up being one of the biggest meat traders in South America, based in Argentina. He was buying inexpensive high-quality meat in Argentina and selling it in Europe while making a nice profit. He told me not to say a lot of things about what you do or before you do them. Let your actions and successes speak for themselves. As you know, here in Greece there are a lot of politicians and businessmen that say that they will do this and that, they are full of big ideas, but in the end nothing happens. It is better to achieve first your goals and then announce it rather than say a lot of things before you have accomplished something. I have followed that advice.

The second piece of advice I got from a friend of my father, who is also a ship-owner, when I was starting my own business. He gave me some advice that I have followed lately. In the beginning I did not follow it. He told me not to be afraid of big numbers. He told me that if I analysed my moves thoroughly I should not be afraid of doing big things, such as deals that involve large amounts of money. In the beginning, because I was young and conservative, I did not want to do big deals. Then I realized that he was right because the only way to make big money is to make big deals. It was clever advice which I am now following.

We have talked about your journey and how you got here. What is your personal vision and where do you want to lead the companies?

I never stop; I am like a robot. As soon as I get somewhere I want to get higher. For Brave Maritime, the dry bulk company, I sold the majority of the company a few years ago and now I am rebuilding the fleet from the beginning. I would like to find a partner that has the same ambition and goals like me and partner up and grow the company from the current eight ships up to twenty or thirty in the next three to four years, with brand new ships of the best quality. The best quality ships are Japanese-built.

For Stealth Maritime, the tanker company, since we have invested a lot of money into it from 2007-2010, we want to stay put and not do big things with it. If we stay as we are and the ships make money we would be quite happy.

For Stealth Gas, the gas carriers, we will be ordering more new ships, in bigger sizes. We are already the largest LPG company in the world and we currently have $1.2 billion in assets. In 18 months from now we will have exceeded $1.5 million in assets and we will have an excess of 65 ships and maybe we will be close to 30% market share. Don’t forget that we have many strategic investors that believe in me and have become large shareholders in Stealth Gas, like Michael Dell, who bought 9.9% in February. It was important for us to have one of the most successful US businessmen showing his belief in the abilities of our company. Probably, in the next two years we will have one more company from the Group listed on the American Stock Market. We hope that this winter we will have more nice things to announce to our shareholders and our bankers

Now in terms of China, when I saw your interview about NASDAQ you were already beginning to look toward the East. How is this developing?

Currently, as a group we have a total of 90 ships and we are the third largest fleet in number of vessels in Greece and almost 60 of those ships are trading in the Far East. Our biggest and most important geographic area is the Far East. This includes China, Japan, Korea, Indonesia and the surrounding countries.
With China we have a long lasting relationship. We have been doing business with China since the 1980’s. We have been repairing our ships in Chinese yards. Our first order of ships in 1999 was from China, when China was not a very significant builder of ships. Up to now we have many tankers and bulk carriers in China -not the gas carriers. I think that the Chinese shipyards are learning quickly and they will be able to offer high quality gas carriers as well. Between 2006 and 2009 we were the only European company that had gas ships with Chinese flag and crew doing cabotage business in China. We were very proud to be the only European company approved to do that. We have a long lasting relationships with big Chinese groups, such as Sinocan H&A, which is a big Chinese group, and a lot of Chinese large yards that belong to the Chinese state, such as SWS and New Times Shipyard. We have a long lasting relationship, we trust each other and we are very surprised and amazed by the pace of progress in China, especially in the shipping field. Ten years ago the Chinese shipping companies had a few and very old low quality vessels. Now a lot of them have new, very expensive ships and have totally changed the profile of their fleets. The same applies to their shipyards. Ten or fifteen years ago the Chinese yards could only build very simply designed ships. Now they have hired a lot of specialists, they have improved their efficiency and quality tremendously over the last ten years and they can build any type of ship they want. For us it is very impressive success because I would never have imagined fifteen years ago that the Chinese yards would now be the global leaders and able to build these very delicate and complicated ship types.

What would be your personal message to the audience of Fortune China magazine?

As China is becoming the world’s largest superpower, because they have the technology, the money, the people, the ambition and because many businesses around the world want to do business in China and with Chinese companies, for me the most important advice to the Chinese people is to continue to advance, progress and achieve their goals while treating foreign investment with respect and fair terms. As you might remember in Russia there was a lot of foreign investment but because as some of the companies were not treated very fairly by their Russian counterparts a lot of these foreign companies left with a bitter taste and they do not want to re-invest in Russia. The Chinese, which are now at the heart of the global business world, have to be careful to treat their counterparts fairly. They should not give them any special favours, but they should treat them fairly as equal partners, which is the only way to gain their trust and achieve more difficult goals in the future.

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