The success of Transworld can be attributed to the Herculean efforts of chairman Ramesh Ramakrishnan, who remains determined to steer his company past Middle Eastern rivals in the cutthroat world of shipping.
Ramesh Ramakrishnan, chairman of Transworld Group of Companies (TGC), remains humble when discussing his success in creating a shipping empire that's worth approximately US$70 million dollars.
The company has insightfully diversified to provide a range of shipping related services including ship owning, shipping agencies, ship management, freight forwarding, logistics, marine and container repairs, container and inland storage.
Although the group is constantly strengthening its operations, the acquisition of ships is a big driver for TGC. The company has recently expanded this division by purchasing two new vessels to propel them further in the region as a leading supply chain provider.
Ramakrishnan's passion for the high seas was inspired by his father, who established Transworld in 1977. "My father started his career as a stenographer in a shipping company and moved to Dubai in the early 1970s. He saw the potential in the trade route from Dubai to Mumbai, and that is how Transworld emerged," explains Ramakrishnan.
TGC now has over 20 offices worldwide, but the journey to establish this growth has not always been smooth. "My father bought his first vessel in 1982 when he invested all his savings into a secondhand French vessel that could carry all kinds of cargo," says Ramakrishnan.
"At the time, there were fears that the business was going to fail. The market in India was very controlled, which made it difficult for a young company trying to secure business," complains Ramakrishnan.
However, Transworld managed to secure deals with a number of shipping agencies in India, including the United Arab Shipping Company and Malaysia International. The success of these partnerships enabled the company to enhance its ship owning organisation. "My father purchased another ship in 1985, before he passed away in 1989," he adds.
After the death of Ramakrishnan's father, the company employed a different tack to its operations. "After relocating to Dubai to take the helm of Transworld, I decided to operate the business in a slightly different fashion," he explains.
"We needed to become a more customer friendly common carrier to be competitive. We gradually became known as a common feeder operator in the region, and the issues surrounding Indian ports meant people used Dubai instead, so we offered this service to customers."
The company created alliances with Balaji Shipping (U.K.) Limited in 1990. This placed over 200 containers in the company to enhance productivity. "To operate as a common carrier feeder, we needed the support of a NVOCC to counteract issues of wasted space," elaborates Ramakrishnan. "Balaji Shipping has now become a substantial player in both the Indian subcontinent and the Middle East."
"To build on our presence in India, we purchased another shipping company called Shreya Shipping in 1992," continues Ramakrishnan. Branching into this area was a consequence of the tremendous opportunity that arose from India's talks of liberalisation.
"Our decision to start owning Indian flagged ships was an investment that we knew had great potential. As a company, we would have priority with these vessels and access to over 7000km of coastline," he adds.
Transworld's existance in India for over three decades almost makes them pioneers in the subcontinent. "Our expertise in this field has resulted in us having an unbounded confidence in the regional market," he asserts.
Today, Transworld Group claims to control 15-20% of India's liner business to any port, with the ship owning venture growing to cover 18 container feeder ships of 500-15000 containers. This strong market presence is not solely isolated to India though, as offices in Singapore and Malaysia help to channel the Far Eastern market. But it is the UAE that lies at the heart of the organisation.
"Dubai is crucial to the company for not just business reasons but sentimental ones too, as the company was seeded in the UAE by my father," reflects Ramakrishnan.
As the shipping industry grew in Dubai, so too did the acquisition of vessels by Transworld. "The huge drive in acquiring more ships was part of an important business strategy. We realised that having just one entity alone in Dubai would not allow the company to grow," reports Ramakrishnan.
"The company's increase in ownership has resulted in the business having a broader base. We have attracted more companies as we are able to offer a more cost effective solution to our customers."
Expansion in this arena is essential for shipping companies as trade in the Middle East region is growing between 6-7% annually due to the emergence of shipping powerhouses. "We can expect more increases in business activities within the region, thereby fuelling the need for shipping solutions, which has seen an exponential growth within the past years," enthuses Ramakrishnan.
To tackle the growing demand for sea cargo transportation and fully leverage the booming shipping and marine industry in the region, TGC has awarded an $80 million shipbuilding contract to Guangzhou Wenchong Shipyard (GWS).
The contract was signed by top-ranking company officials including He Fang, deputy director of China Shipbuilding Trading Company and Yin Xueming, chairman of GWS.
"In order to address the ever increasing requirements and demands of the regional trade, we have commissioned GWS to work on the single largest order placed by our company this year, which will boost our fleet to comprise of a total of 24 state-of-the-art vessels to be ready by 2011."
The two 175 metre ships are custom built with two 45 tonne safe working load cranes and are designed with a maximum capacity of 1740 TEUs and a speed limit of up to 21 knots. "These vessels are suited towards TGC's primary short sea routes that provide a weekly connection for container trade from India, Pakistan, Bangladesh, Columbo and the Middle East to the hub port of Jebel Ali in Dubai," reports Ramakrishnan.
Transworld is positioned at the new south facility of Jebel Ali Free Zone (JAFZ), which will be a strong initiative as it means the company can easily tap into the air cargo industry through the forthcoming international airport, Al Maktoum, being built at Dubai World Central (DWC).
The introduction of this vast new free trade zone will support the rapid growth of container trade in the region. In addition, the terminals in Dubai ports are also undertaking significant infrastructural improvements to address the growth in traffic, which officials have projected to reach 20 million TEUs by 2010.
"We are optimistic that these developments will increase efficiency across the industry, thereby saving our customers valuable time and resources through the timely delivery of their goods," says Ramakrishnan. "We are looking forward to reaping the benefits of trade friendly initiatives such as these, as we continue towards strengthening our business resources."
While external factors such as demand in the region do contribute to the company's productivity, also integral to its success is the dedicated team that works alongside the chairman. The group has over 4000 employees, 200 of which are based in Dubai.
"The greatest asset that we have is our people. Our workforce is extremely talented and they add to the dimension of the group. We invest in training and hands on job experience, which is very important," emphasises Ramakrishnan.
Transworld delegates responsibilities to teams, which are monitored through weekly and monthly meetings that outline a clearly laid out growth strategy. Not only does Transworld invest a lot of money in human resources, but the quality and standard of the ships it owns is equally important to its revenue return.
"The challenge for operators like us is we have to ensure investments in the right ships. They have to be fuel efficient in order for us to be competitive with our pricing," declares Ramakrishnan.
Providing Transworld can continue to achieve these initiatives, the company should not be at risk of sinking. Ramakrishnan remains optimistic regarding both Transworld's future and the shipping industry in general.
"I think the growth in this region will continue for the next five to seven years at least. I do not envisage any problems. I could be wrong but what I do know is that we were lucky to be in the right place at the right time," he confirms.
Demonstrating its faith in the market, the company has no current plans to stray away from the region. "We are focusing on the Middle East, India and South East Asia. At the moment we have so many opportunities in this region, if we don't utilise them then there is no point in looking at other parts of the world," unveils Ramakrishnan.
Transworld will continue to grow and improve in the industry to capitalise on the economic boom in the region.
"We are keeping our eye on other possibilities, as after all, like any good company, you need to have a vision to be global. In a few years that will become a reality but for now we want to gain enough muscle in the region to be recognised as international contenders," he concludes.
Headquarters: Jebel Ali Free Zone, United Arab Emirates
Divisions: Ship owning, shipping agencies, ship management, freight forwarding, logistics, marine and container repairs, container storage
and inland storage
Offices: Dubai, Bangladesh, Pakistan, Mumbai, Singapore, Malaysia, United Kingdom and the United States (amongst others)
Group Companies: Clarion Shipping, Orient Express Lines, Balaji Shipping UK Limited, Shreya Shipping and Meridien Shipping Agency (amongst others)