Couple has more modern ships than Philippine Navy

He was an agriculture business student when he first met a nutrition student at the dormitories of UP Los Baños in the early 1980s.  They fell in love, got married, became partners in a trading business and built a company that now owns more modern ships than the Philippine Navy.

The Pastrana couple has ten newly-built, state-of-the-art ships, outnumbering the new vessels of the Philippine Navy, which has recently received two retrofitted Hamilton-class cutters from the US and three decommissioned frigates from Australia.  The couple expects to get 20 more world-class watercraft at a cost of $8.3 million to $10 million each before 2020 as they embark on a journey to transform the decrepit and sometimes perilous Philippine shipping industry, connect the islands and change the lives of Filipino travelers. 

The first 10 vessels have already set the bar higher in maritime transport, challenging rivals to improve their standards in order to alter the Philippines’ reputation as the site of the world’s worst maritime accidents.

“I am a regular traveler of the Philippines.  I am from [Matnog] Samar.  We traveled and had a very bad experience in 1996,” Christopher Pastrana says in a news briefing at a restaurant in Makati City.

Pastrana often pondered on the state of ferries or boats he was riding in on the way to his father’s hometown.  “Life is priceless.  Everytime I heard about sea accidents, I felt bad,” he says.

Archipelago Philippine Ferries Corp. co-founders Christopher and Mary Ann Pastrana

He saw the need and the opportunity to provide something better for island travelers. “I told myself that I would do something for this industry.  There’s nothing that happens without God’s will.  So I ended up going into the business, with the purpose of helping the countryside,” Pastrana says.

Pastrana is the chairman of Archipelago Philippine Ferries Corp., operator of FastCat roll-on/roll-off ferries and the co-founder, president and chief executive of Capp Group of Companies. His wife, Mary Ann Ibuna is the co-founder, executive vice president and treasurer of the group.

Pastrana, who graduated from UP Los Baños with a degree in Agricultural Business, and Mary Ann, a board certified nutritionist, formed Capp Industries Inc. in November 1989 to transport bulk cargo for the fertilizer, cement, mining and beverage industries.  His company acquired the RoRo business of the Philtranco bus lines in 2002.

“We took over the subsidiary of Philtranco group which is the ferry business, which we expanded.  From four vessels, we were able to grow to nine vessels—all second-hand from different countries.  We had vessels coming from Japan and Norway.  There were two that were part of the grant given by the Japanese government in the 1980s.  And we grew the company.  But there was a need for us to address issues that would provide better and safer means of transportation system.  In 2010, we embarked on modernization program,” says Pastrana, who holds a Masters degree in Entrepreneurship from the Asian Institute of Management. He also finished an executive leadership program at the Massachusetts Institute of Technology in Boston.

The Pastrana couple saw the need to introduce better vessels and services in the local maritime transport, as the country became infamous for sea disasters.  In the evening of Dec. 20, 1987, passenger vessel Doña Paz ferry collided with oil tanker MT Vector off Mindoro island near Manila, leaving more than 4,300 passengers and crew members dead or missing in what is now considered the world’s worst peacetime shipping disaster.

“It was the worst maritime accident in the world, worse than the Titanic, with 4,000 lives lost.  It is so embarrassing, when you go to conferences and all of these are being mentioned,” says Pastrana, who holds the rank of ‘captain’ in the Philippine Coast Guard Auxiliary.

“I saw the need to bring something better for our countrymen who are deprived of the basic needs in transporting or moving around the country.  We are an archipelagic country, with the second longest coastline in the world and 7,107 islands.  Then, we have a growing economy. We have a very good regional growth.  But there seems to be a lack of focus and development in maritime.  Because of the  opportunity of traveling to different parts of the country, I saw the need to help in this industry,” he says.

Pastrana tried to look for a vessel that would be more suitable for Philippine conditions.  “Our people in the countryside always bring boxes of goods when they travel.  All of these, we tried to hook into our business model so we can cater to every Filipino,” he says.

“I tried to look for a vessel that is more suitable and I ended up finding somebody who sent me a plan from Europe.  I was so impressed by the performance of the vessel, so I tried to contact them, but they could not believe me.  They could not believe that the Philippines would embark on a modernization program,” he says.

Pastrana says the European company did not return his call until he ended up contacting the son of the person he was looking for.  The person on the phone thought Pastrana was an Indian businessman. When the phone was passed to Pastrana’s contact, the person was surprised to learn that he was talking to a Filipino.

“So I invited him and I showed him the Philippines.  That’s where it [partnership] all started.  He said it is high time.  We went around the country. In two days, I took him on a plane, took him in a boat and we went around.  He said let us help each other,” Pastrana says.  

APFC borrowed from Development Bank of the Philippines to finance 75 percent of the $249-million fleet modernization program, with the rest representing equity of the company.  APFC also signed a loan agreement with United Coconut Planters Bank. The modernization program involves the acquisition of 30 RoRo vessels at a cost of $8.3 million to $12 million each from Sea Transport Solutions of Australia, the leading designer and builder of catamaran vessels in the world.

APFC tapped Sea Transport Solutions to build mid-speed RoRo passenger catamaran vessels, especially crafted for the Philippines’ unique weather and sea conditions.  Pastrana says catamaran has the best design for fast ferries because of their speed, stability and large capacity.

“In this business, capital expenditure is substantial and operational expenditure is also significant.  Before, we used to have nine ships with different designs, different parts and different maintenance requirements.  Now, with a fleet of the same [catamaran] vessels, the cost of maintenance is lower and your crew can transfer from one vessel to another,” Pastrana says.

“We have better margin, because the vessels are fuel efficient.  Because we are more efficient, we are lighter, we are faster, we are able to reduce our fuel expenditures,” he says.

“If you think about it, it has a long return [on profit].  But like I said, what is important is the service we provide,” he says.

“Right now, we have 10 vessels. We are building two and there is an order for three more.  Hopefully, we will have 20 vessels by 2018. Before 2020, we will have the entire 30 vessels,” Pastrana says.

Pastrana says with the 10 vessels already deployed, the company could serve three million passengers a year, a number that could reach 12 million by 2020.   “It is a large investment.  We are putting our resources to where it should be, because it really requires a lot of expenditures,” he says.

FastCat began commercial operation on Aug. 2, 2013 along the route of Batangas-Calapan, Mindoro. Since then, it has added routes including Bulalacao, Mindoro-Caticlan, Aklan (April 2015), Iloilo-Bacolod (September 2015), Matnog, Sorsogon-San Isidro, Samar (November 2015), and Liloan, Leyte-Lipata, Surigao (December 2015).

A FastCat vessel can take in up to 275 passengers, seven trucks or buses and 34 cars.  The vessel is fitted with world-class amenities.  “Our shareholders agreed to provide better services. We access loans from the banks  and the banks believe in our vision to make things happen for the maritime industry.  So they lent us, with the 75-25 debt-equity requirement,” he says.

Pastrana says profit is secondary to the company’s vision.  “We reduce risks of maritime emergencies...We are making a difference in the lives of the people and we are helping in nation building because we are connecting the islands,” he says. 

“Moving forward, ten vessels are now here.  We are happy to announce that we have connected most of the eastern and western corridor.  It has been more than five years since we embarked on this modernization program.  The vessels are already here.  We still have problems, but at least we are moving forward,” he says.

The deployment of FastCat, which has an average speed of 16.5 knots or about 29 kilometers an hour, one of the fastest in the industry, has impacted domestic travel when it comes to mobility, convenience, safety, cleanliness and high standards. “We have seen how passengers appreciate our vessels.  We are not stopping here.  We are planning to have more of these ships and connect more islands,” says Pastrana.

Pastrana says he chose the catamaran design because of its flexibility, safety, fuel efficiency and lower operating cost.  Catamaran is a multi-hulled boat or ship which is designed for open waters and suits the weather and sea conditions in the Philippines, he says.

“Before, about 50 percent of our operating cost was fuel.  We were able to reduce that. We also reduced risks of maritime emergencies,” he says.

“We intend to bring up to 30 of these ships, from 30 meters to 60 meters to service about 12 million passengers a year and if we are lucky, 15 million tons of cargo, after we complete our expansion.  That means we will be able to open the eastern, western, central nautical highway, including connectivity to Indonesia and Malaysia.  Our country has to work with our Southeast Asian neighbors to open our borders,” says Pastrana.

Ferries transport about 50 million passengers and 80 million metric tons of products every year. “We believe that connecting people removes cultural boundaries,” he says.

Mary Ann, his wife, also focuses on the business and now takes a post diploma course on maritime management.  She is also the president of Scorpio Transport and Manning Services Inc., an overseas employment agency and Archipelago Philippine Seafarer Institute Inc., a maritime training center.

“We were entrepreneurs.  We started with trading business of bulk materials. We were supplying materials for cement plants, which we do up to now. That business also has a shipping component.  Before we got into the RoRo industry, we did not have background in maritime industry.  Because of that, I enrolled taking Executive Maritime Management at the World Maritime University.  I am doing it for the love of the industry so that we can be experts in what we are doing,” she says.

Mary Ann says APFC’s vision is to set the standard in ferry transportation by providing exceptional performance and customer service.  

A FastCat vessel, which has fully air-conditioned business class and premium economy sections, complies with international, environmental and maritime safety standards.  Mary Ann says FastCat is fitted with complete alarm systems and emergency lifeboats and life vests. Passenger seats are upholstered with a fire-retardant, durable and eco-friendly e-leather material.

FastCat has a clearance between the water and the hull of three meters, or three times higher than most RoRo vessels.  It is built with twin hulls and 10 water-tight compartments for better stability, two steering control systems for automatic and manual operations and four American Bureau of Shipping-certified Yanmar engines, which emit less toxic substances than the average RoRo vessel.

“We are safety-conscious. We are internationally classed.  We are being audited by ABS [American Bureau of Shipping] annually.  Insurance companies also audit us.  We are very transparent.  We make sure we deliver,” she says.

“We are also the fastest.  We run 16.5 knots, against competitors running 9 or 10 knots.  What it takes competitors three hours, we get in 1 hour and 45 minutes.  What we give people is valuable time—time they should spend with their family, time they should spend for work or to be productive. We are getting there fast,” she says.

Mary Ann says FastCat also provides convenience that cannot be found in other vessels.  “We have state-of-the-art, air-conditioned accommodation.  We have entertainment on board and we have cafeteria. We set the standards high,” she says.

“The way we run the company, we affect the industry in so many other ways.  We have a lot of retired seafarers coming to our office and they share their stories.  They said they are so touched that there is now a serious player in the maritime industry.  They come to me and say, whatever we can do, let us help you. A lot of retired seafarers help us make this happen,” she says.

Pastrana says APFC’s expansion program also involves connecting the archipelago to Southeast Asian neighbors. “We are expecting to cross Malaysia from Palawan by the first quarter next year.  We will do a trial run in May in Kudat [Sabah] to Palawan.  The actual commercial run will probably start next year,” he says.

“We believe that being able to provide connectivity, seamless travel, to move people and goods freely, from east, west, central, all over the islands will help develop this country and help in nation building,” Pastrana says.

He says once the connectivity plan is completed, transporting cargoes between Luzon, the Visayas and Mindanao will be much easier, faster and cheaper.  “One container to Cebu will probably take you 12 to 14 days and to Mindanao, it is a bit longer at about 16 days.  I am talking about the time to book the container, consolidate, schedule, deliver it and the time you get to the destination.  If we complete our connectivity and alliance, you can bring your cargo to Cebu in 17 to 21 hours daily.  Through the integration and seamless transportation, you can bring your cargo to Mindanao in 28 to 31 hours daily,” he says.

Pastrana, currently the president of Interferry, an international organization of ferry owners and operators, says APFC teamed up with Philtranco and Jam bus liners to boost domestic tourism.  “They are targeting to reach 1,000 buses in combined fleet in the next two years.  We hope that more Filipinos will visit other parts of the country.  The Philippines is one beautiful country.  I myself have reached only 15 percent of the archipelago.  Together, let us discover the country, the people, our fellowmen,” says Pastrana.

Filipinos traveling via Jam Liner (which plies the Manila-Laguna-Batangas-Quezon route) and Philtranco (which covers Manila to Pampanga, Bicol, and parts of the Visayas and Mindanao) can now visit the islands of Mindoro, Boracay and Palawan through FastCat’s RoRo service.

Mary Ann, however, says major challenges remain along the way.  “It was not an easy journey since 2010, when we started the program.  We were subjected to a lot of challenges such as fuel prices, weather, fire, wind, government permits, ports’ permits, local governments’ permits, Marina permits, PPA permits,” she says.

Pastrana says the government should also recognize the need to deploy modern vessels.  “It is frustrating that we cannot get along with different agencies in government, because if you look at countries, you can register and operate a boat in Japan in seven days from the time the ship was delivered.  Here, we received a ship in December [2015], but it was given permit to operate just two weeks ago.  It took so long.  It was not a problem with just one agency.  It was with several agencies in government.  In fact, it took us three months to get our first vessel to operate,” he says.

While studying in the US, Mary Ann talked to a lecturer to vent her anguish.  I was telling him it was just too hard.  He said ‘if it is too easy, everybody else will be doing it.’  So maybe, we have a mission to accomplish.  It is hard. When I pray, I say Lord it is like trekking a mountain and that mountain is now Mount Everest... But when people appreciate what we do, it is worth it,” she says.

In 2010, APFC became a member of InterFerry, a highly renowned shipping organization representing ferry operators from 38 countries. InterFerry welcomed Pastrana into its board in 2014 and appointed him president in 2015.  The 41st Annual InterFerry Conference will be held in Manila on Oct. 15 to 19, 2016.

In 2014, the Maritime Industry Authority recognized APFC for its positive impact on the Philippine maritime industry and its efforts to modernize domestic shipping.  The Health Department’s Bureau of Quarantine also awarded FastCat as the ‘cleanest vessel of the year’ in 2014.

Aside from operating FastCat vessels, the couple’s Capp Group is also into tugs and barging operations, ship management and repair, port operations and maritime training.

Pastrana, however, says APFC looks beyond profit as the main goal.  “Profit is secondary. We are making a difference in the lives of the people and we are helping in nation building because we are connecting the islands,” he says.

“We want every Filipino to enjoy a ‘ferry’ safe, ‘ferry’ fast, and ‘ferry’ convenient trip,” he says.

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