WHEREVER HE GOES

Logistics Insight Asia, 1/9/2009

After 17 years with GAC in the Middle East, BENGT EKSTRAND recently moved to Singapore to head up the company's Asia Pacific business. He talks to Bob Gill.

Since starting shipping agency operations in 1956 in Kuwait, GAC (an acronym for Gulf Agency Company) has steadily expanded its range of operations and now provides a range of shipping, logistics, and marine services for an array of different industries. With increasing global reach in recent years, the “international company with Scandinavian roots”, has 300 offi ces around the world and employs more than 8,000 people.

Q: How active is GAC in Asia?
A: Globally, GAC is organized into five regions: Middle East, Asia Pacific, Europe & Africa, Indian subcontinent, and the Americas. Given our roots in the Middle East, that region still accounts for the bulk of our revenue (70 percent), while Asia Pacific now contributes about 15 percent.

In this region, GAC’s business activities are concentrated on key markets, and we currently have 50 offices in 11 countries and close to 1,500 people serving customers across all areas of logistics.

We provide customers with warehousing and 3PL, freight forwarding (air, ocean, road), local transport, customs clearance, etc. In addition to our core services, GAC also caters to niche industries providing specialized skills in event logistics, sports logistics, aviation & aeronautical logistics, marine and project logistics.

Q: And what brought you to the region?
A: I joined GAC in 1992 and spent my entire career in the Middle East – in Bahrain, Oman, and most recently at the Dubai HQ from where I ran the regional business. When I was offered the regional director position for Asia Pacific, I saw it as a good move for me and also good for the organization – in that I could adapt and use that 17 years of experience and help to expand our business in this fast-growing part of the world.

In the Middle East, the GAC name is very well known, but is less so in Asia. Hence one of my key tasks is to change that and get our brand out there, and so capitalize on the undoubted opportunities that there are for us here.

Q: Where do you see these opportunities?
A: During tough times, companies tend to look for solutions that will offer them safe solutions and reduce fixed costs. As a result, they turn to outsourcing to achieve economies of scale, as well as “pay for what you use” concepts.

So in terms of opportunities in third party logistics, we have seen a stream of companies looking to outsource their non-core functions with the onset of the global financial meltdown, especially in China, Malaysia, Thailand, Indonesia and the Philippines, where the existing logistics infrastructure may not be geared up to accommodate demand levels and so presents a challenge to both manufacturers and retailers.

Another factor that prompts manufacturers to outsource is the infrastructure investment made by 3PL providers. For GAC, Asia is a region in which we have invested heavily in warehouses – such as in Indonesia and the Philippines – and witnessed considerable success in attracting customers as a result.

Q: How has the economic slowdown affected business?
A: Actually, Asian markets have overall fared well in the past 12 months, in comparison to the US and Europe. For example, while volumes from China are down 25-30 percent, there is still positive growth – albeit at a reduced level – and it will bounce back.

But yes, globally and in Asia, ripples from the global financial crisis have been felt, in particular, in the fast moving consumer goods sector. Volumes are down year on year for the market but GAC has compensated for any negative impact by gaining new business.

We have also been able to minimize the eff ect through a diversified customer base of industry sectors. Indeed, a global logistics provider like GAC faces intense competition when it spread its wing in new countries. Therefore, the diversity and integration of our services portfolio is very significant, especially when dealing with uncertain economic situations.

Q: Which are the key industry sectors for GAC?
A: GAC serves a broad range of diverse companies with unique needs. We specialize in serving customers in the FMCG (consumer goods, textile, electronics), pharmaceutical, automotive, oil & gas, and entertainment industries.

Freight forwarding, warehousing and 3PL for the FMCG sector is vital to GAC’s business, and our customers demand excellence in all parts of the supply chain and are looking for added value and reduce costs to their bottom line.

The offshore oil & gas/project logistics industry is also a key sector in Asia for GAC. Our experience and willingness to enter into newer and more challenging areas like Turkmenistan and Kazakhstan has helped to spur this along. Oil & gas customers also tend to seek out (and pay for) more sophisticated, higher margin logistics services

Another exciting focus for GAC in Asia Pacific is our involvement in logistics services for entertainment shows and events. GAC Events Asia, based in Singapore, offers a portfolio of services for live concerts, product launches, exhibitions and sports logistics.

Q: And how does GAC differentiate itself?
A: I believe it all starts with employees. If you have staff that are happy then they will give that bit extra when dealing with customers, and this translates into professional, reliable service with a personal touch.

To this end, we do look after our people very well – our staff turnover is low and the length of stay is very high. From my experience in the Middle East I can tell you that foreign workers from less developed parts of the world are often not treated so well by companies, which is a marked contrast to GAC’s approach to human resources.

Following on from the previous Vision X – Global Reach initiative to extend GAC’s presence around the world, our new growth strategy, Vision Y – Global Values, builds on that growth momentum and adds an important values component. Our values reach beyond cultural and geographical differences and add a strong human element to all that we do.

Another notable differentiator is enshrined in our tagline, Wherever You Go. This recognizes GAC’s willingness and ability to set up operations and serve our customers wherever in the world they want to be, which can often be in harsh environments.

For instance, in 2008, we were established in three new countries – Algeria, Kazakhstan, Mozambique – all of which were driven by customers requesting that we help them in those geographies.

Q: In terms of marketing, why the strong emphasis on sports sponsorship?
A: GAC had grown noticeably since our first opening in the Middle East and reached to the point where we needed to step up and increase our brand visibility globally. That’s when we chose sport as our key brand-building platform, because it is universal, no-language barrier leisure activity watched by billions around the world.

So GAC’s sponsorship of Crystal Palace, of Manchester United Soccer Schools, of motor racing’s Alex Brundle, to name a few, enables us to widen our global brand visibility to customers, partners, suppliers and employees. It also reflects speed and precision – qualities our customers look for in logistics partner.

Q: Which people particularly inspired you during the course of your career? A: I am inspired and impressed by the early GAC pioneers who came from Sweden and established and supported the company in its early years when the Middle East was hardly the developed place it is today.

They established the basis of GAC Spirit, which we have been cultivating until this day, and set the fundamental platform which sustained GAC’s growth over the years.

Q: Looking ahead, what is your ambition for GAC in Asia Pacific?
A: As I mentioned, GAC’s brand is already well known in the Middle East due to the size of our operations and our 53-year history. My wish is that GAC will soon be the “top of mind” brand for shipping and logistics in Asia Pacific. So when a customer wants something delivered, he will say, “Let’s GAC it.” I believe that we will reach that level eventually.