As with many shipping companies they started out as a family business. Andreas Sohmen-Pao is the third generation CEO in the family-run, multi-billion-dollar BW Group. The company was created through the merger of two family shipping dynasties – Bergesen of Norway and World-Wide Shipping of Hong Kong – whose operations span multiple business areas: crude oil tankers, product tankers, chemical tankers, LNG carriers, LPG carriers, and offshore floating production vessels. Although it is a family-owned company, BW has been active in the capital markets and has had, at various times, publicly traded subsidiaries and bonds. BW Offshore (OSLO: BWO) is currently listed on the Oslo Stock Exchange.
World Wide Shipping was created in 1955 by Sohmen-Pao’s grandfather, Sir Yue-Kong Pao, (commonly known as “Y.K.”). His grandfather’s entrance into shipping heralded what many in the industry called the “new era of Hong Kong’s capitalism.” Y.K. famously steered his company through a downturn in the late 1970s by recognizing the warning signs in the markets and aggressively selling ships while prices were still considered reasonable. With those funds, he paid off debt and built the company’s cash reserves. Within five years, what was once the world’s largest fleet was less than half its former size, and the company avoided the crisis that inflicted pain on so many in the industry.
Y.K.’s grandson, Sohmen-Pao, does not fit the mold of a brash shipping tycoon. He is mild-mannered, carefully choosing his words when he articulates his thoughts. His decorated family history provides him with early memories of shipping during a different era. “I remember standing next to Margaret Thatcher as she smashed a champagne bottle against one of our ships being built in the U.K.,” he says. “Imagine a U.K. Prime Minister taking a personal interest in ships and shipbuilding.”
Sitting down with Andreas was fascinating. I loved hearing in his own words how his family’s iconic company has evolved.
Below is an excerpt from “Dynasties of the Sea” which is under copyright by Marine Money
What makes a family business special is that each generation brings something different to the table to help the company grow. When asked about his contributions, Sohmen-Pao smiles and says it is far too early for him to be commenting on this. “The old saying ‘Rags to rags in three generations’ should serve as a reminder that one needs to keep working hard to succeed, and never celebrate too early,” he chuckled warmly.
Sohmen-Pao described a significant shift in the way businesses are managed now, as compared to his grandfather’s time. “My grandfather ran the business in a way that was perfectly appropriate for his time, and my father does likewise as chairman today. In the case of my grandfather, information was more concentrated, deals with customers were typically longer-term and more relationship-driven, and business decisions could be more centralized. Today’s workforce has a different expectation in terms of involvement. We’re operating in a very fluid and uncertain environment, and we have a flatter organization to cope with the huge increase in information flow. I think it can be dangerous to try to manage exactly as earlier generations have done, because the world is not the same.”
Having said that, Sohmen-Pao emphasized that the company’s core characteristics have not changed, for example keeping a long-term view and treating employees and business partners fairly. The company has always been known for its constructive approach to doing business, its reputation for supporting its customers, and for thinking about the industry rather than just its own needs. Another trait ingrained in the company’s DNA is the willingness to adapt. “Throughout the past 60 years, we’ve moved into new markets, bought companies, and changed management. Through it all, our ability to adapt has enabled us to be true to our heritage, while changing and growing as circumstances require.”