Israeli Odd Couple

In the late 1940s, Mila Brener and Ya'acov Meridor would have seemed the least likely candidates imaginable for the job of rescuing the sinking British shipbuilding industry. Both men were then Zionists fighting British forces in Palestine--the Russian-born Brener as skipper of a blockade-busting refugee ship, the Polish-born Meridor as deputy commander of the bomb-wielding Irgun underground and sometime inmate of British prison camps in Kenya and Eritrea. But last week, Brener and Meridor's little-known Haifa-based firm, Maritime Fruit Carriers, completed placement of roughly $700 million in orders and options for 26 ships--the largest transaction from a single customer in British history.

The order, which included ten supertankers of 260,000-to 330,000-ton carrying capacity, is only part of Maritime's plan to add a lucrative business in hauling oil to its rich slice of worldwide fruit shipping. Altogether, Maritime now has 23 VLCCs (very large crude carriers) under construction throughout the world, including three 265,000-ton monsters being built in the U.S. by Bethlehem Steel Corp. for $235 million.

All of the tankers will be operated by Maritime's newly formed American subsidiary, General Maritime Corp., which will thus become the second U.S. shipper to operate VLCCs. General expects to announce soon the full composition of its board, which already includes Sol Linowitz, former Ambassador to the Organization of American States, and ex-Secretary of the Navy John Chaffee.

As they do with the rest of their fleet of 48 ships, the two Israelis hope to sell 70% to 80% shares in the tankers to other shippers--who, they believe, will be eager to invest. Meridor and Brener expect that the world energy shortage will more than double demand for supertankers over the next decade, and they foresee soaring construction costs for shippers who try to build their own vessels.

Cost-Cutting. Shrewd timing has characterized Maritime's operations since its inception. In 1953, Brener foresaw the need for fast, modern, refrigerated ships known as "reefers." Meridor, a confident entrepreneur and ex-member of Israel's Parliament, was impressed, but the two moved cautiously, acquiring their first reefer in 1960 and building up an "intelligence network"--a staff of 40 researchers who keep track of world shipping needs and who have predicted temporary declines in shipyard activity. The moment to build at relatively low cost came in June 1963, and the partners ordered from Norway four reefers that were fast enough (21 knots) and big enough (400,000 cu. ft.) to deliver twice as much fruit each season as conventional ships. These "core class" reefers--designed by Israeli engineers and largely financed by government-guaranteed loans--eventually grew into an armada that by 1971 totaled 36. All were then leased to Maritime's main competitor, Sweden's Salen, for $500 million. The agreement gives the two firms control of more than half the world's privately owned refrigerated ships.

Maritime did not rest on its reefers. While Brener, now 51, concentrated on operations and planning, Meridor, 59, sniffed out investors, government subsidies and tax loopholes. The pair also perfected the cost-cutting construction techniques that they learned while assembling their reefer fleet. Today, Meridor estimates, they save from 5% to 25% on the cost of every ship by not going into details like "the color of plastic on the walls of the captain's cabin." Last year Maritime netted profits of $ 13 million on revenues of $82 million.

The two Israelis could be in a predicament if, for any reason, demand for their ships suddenly declines. Maritime has built its flotilla on a thin money base: only $102 million of equity in a fleet that will soon be worth roughly $1.7 billion. Typically, Maritime covers the down payment on a ship out of government subsidy, leases the vessel while it is still being built, and takes out a mortgage loan to cover the remaining construction costs, with the lease as security.

Meridor and Brener see nothing but smooth sailing ahead. They point out that Maritime has long-term charter contracts that will bring in $2 billion over the next 14 years. The two middle-aged guerrillas also predict that peace will soon come to the Middle East--and that in a few years, even Arab nations will be leasing Maritime's tankers.

This file is automatically generated by a robot program, so reader's discretion is required.