Tonnage Titans – 9. BW Group
Family businesses often find it challenging to transition into the third generation, but the professionally run BW Group turns that notion on its head.
The company began as World-Wide Shipping, founded by Sir Yue-Kong Pao in Hong Kong in 1955. In 2003, World-Wide acquired Bergesen d.y. ASA, Norway’s largest shipping company, to form Bergesen Worldwide. The combined entity was subsequently reorganised and rebranded as BW Group Limited in 2005.
Today, BW Group comprises of BW LPG, BW Offshore, BW Pacific, BW LNG, BW VLCC, BW Chemical Tankers, BW Dry Cargo, and BW Fleet Management. BW LPG and BW Offshore are also Oslo-listed public companies.
According to IHS Markit data, BW Group’s total tonnage of its in-service and on-order fleet is 13,118,807 gt, with the bulk of its vessels either bulkers, gas carriers, or tankers.
At the helm is third-generation shipowner Andreas Sohmen-Pao. Based in Singapore, he sits on the boards of the Maritime and Port Authority of Singapore and the Singapore Maritime Foundation (SMF), among others.
“What is so impressive in Singapore is that rather than just talking about problems, everyone gets on with actions and solutions,” he said in a 2017 SMF speech.
“While we can take pride in what has been achieved, we clearly have to keep working at it. That is the Singapore way – not to rest on our laurels.”
Sohmen-Pao was BW Group’s chief executive officer (CEO) until 2015. Contrary to the idea of a typical family business, the group is managed by an executive team, led by current CEO Carsten Mortensen and chief financial officer Jakob Bergholdt.
At the same time, key founding principles seem to still guide the organisation.
In a 2015 company publication, Sohmen-Pao noted, “Our founder’s mentality encompassed hard work and frugality. Are those principles still in place today? As a smart CEO once observed, ‘Simplicity equals hard work. Complexity equals no work at all’.”
“It is fitting that [BW Group CEO] Carsten has made it a priority to simplify our operations where we can.”
This emphasis on hard work while embracing new trends is a recurring theme with BW Group. The company never shies away from the debate on shipping regulations, and is a strong proponent of disruptive change for the betterment of the shipping industry.
“There is a lot to be optimistic about when it comes to the future of shipping,” Sohmen-Pao said last September at the London International Shipping Week conference.
“By nature, humans have a built-in propensity for progress, to grow, and to trade. And now we have fantastic tools to help make that happen. There will be bumps along the way – such as Brexit and protectionism – but I think the genie is out of the bottle when it comes to progress.”
Though shipping is known to be risky, BW’s approach has been relatively conservative but with an eye on the long term. This has allowed it to weather storms and ride the shipping cycles, and even expand in difficult times, as was the case with BW LPG.
Amid a deluge of newbuilding liquefied petroleum gas (LPG) carriers, BW LPG completed its acquisition of Aurora LPG in December 2016. This creates a stronger entity, Mortensen told Fairplay in 2017, putting it in a better position to weather challenges.
BW Group has thus maintained its stronghold on the gas carrier sector, and has the world’s largest privately-owned fleet of gas carriers. Globally, it has the third-largest gas carrier fleet, behind Japan’s Mitsui and Qatar Gas.
As shipping enters a new era of rapid technological transformation, organisations are finding it harder than ever to set long-term goals and struggle with situations that have no precedent.
While BW is a firm believer of good old-fashioned hard work, it is just as much a forward-looking organisation that moves with the times.
“Embedded in the corporate DNA is an ability to embrace change while remaining committed to strong values,” Sohmen-Pao said.
“It is this duality – resolute action while accepting uncertainty, adopting changes while being constant to our values – that allows us to face the future with confidence.”