GAC History
Bengt Lindwall was well known as tough leader who demanded a lot, but gave back even more. His strongest values included the importance of loyalty, the treating of his staff as life partners, his love of growth and the value of long standing relationships based on trust with both our own people and our customers. Importantly, he believed in listening and gave his managers the autonomy to run their businesses the way they felt they needed to.
We have taken many of Bengt's attitudes and values and preserved them in formalised structures to guide the way we work in GAC. The GAC Spirit is the embodiment of all that Bengt held dear.
Please read the attached article which highlights Bengt's values and character in more detail.
The Early Years
GAC may have been established in 1955, but its history began over a hundred years before that with a company named Nyman & Schultz (N&S).
By the mid-1950s, Stockholm-based shipping and forwarding company N&S had become the leading shipping, forwarding, and travel agency in Sweden and a man named Bengt Lindwall became Chairman and Managing Director in 1947.
In 1955, two Kuwaiti businessmen called upon Bengt Lindwall to request that N&S set-up a shipping agency in Kuwait. Lindwall was intrigued with the idea and in 1956, the Gulf Agency Company officially began operations.
As in most other Arabian countries, a local partner was required in order for foreign companies to do business in Kuwait. GAC's partners in Kuwait were Abdul Aziz Al Kazemi and Jassim Mohammed Thuneyan Alghanim- the two businessmen who had originally approached Bengt Lindwall.
N&S owned 49% of the new company while the Kuwaiti partners owned 51%, and Bengt Lindwall was responsible for covering all start-up capital of the new GAC.
Initially the business was based upon Scandinavian cement shipments, but quickly branched-out into other projects, such as business from the American and European oil drillers.
Expansion in the Gulf
In 1956 Andrew Weir, a Scottish trading firm in Basrah, Iraq, announced it was closing down its shipping office. They had been the agents for Scandinavian Middle East Line (SMEL) as well as a large Japanese shipping company Nippon Yusen Kaisha (NYK).
This was the opportunity GAC had been waiting for. Moving into Iraq gave GAC a flying start and Gulf Agency Company (Iraq) Ltd. was registered on the 10th of November 1956, less than a year after the first office had opened in Kuwait.
Later in 1956, GAC began dealing with tankers calling at Mina Abdulla, Mina Saud, Khor al Mufattah and Khafji in the Neutral Zone after the Suez Canal reopened. This was the point at which GAC began to acquire the experience that would make its reputation in the international oil and tanker industry.
In 1957 the leadership of GAC decided that the agency must establish offices in all the countries surrounding the Arabian Gulf. The next obvious location would be the island of Bahrain, then the commercial and political center of the Gulf region.
This was followed by an office in Dammam, in the Kingdom of Saudi Arabia in 1958 and Iran in the same year, following its political coup.
Later in 1958, NYK in Japan appointed GAC as its general agent in the Gulf, thanks to the close association of the head of NYK's Japanese delegation, Mr Ariyoshi with Bengt Lindwall.
Oil Boom and the Loss of Nyman & Schultz
The 1960's saw tremendous growth in the oil industry. Many new oilfields were discovered, explored and developed. Major oil companies such as ARAMCO, BP, Texaco and Gulf Oil became the dominant economic and social forces in the region.
The GAC offices around the Arabian Gulf which had so recently been struggling to survive now found themselves inundated with new business.
Meanwhile, in 1966 Nyman & Schultz found itself in deep financial trouble. Transair, a charter airline bought by N&S, began to jeopardise the whole company. The bank had refused Transair further support and had decided to take over Nyman & Schultz.
Bengt Lindwall, the former N&S owner/director, decided that his best alternative would be to buy GAC from the bank. Bengt's proposal was accepted since it was a company outside Swedish control and local partners owned the majority of the shares in each GAC company in the Gulf.
The agreement for Bengt's actual purchase of GAC was signed on the 3rd of May 1967.
Diversification and Growth
The Six Day War of 1967 between several Arab states and Israel meant that the Suez Canal was again closed for eight years this time, and overland trucking became the predominant form of transportation.
This launched GAC's extensive diversification in the 1970s into ship brokerage, chartering and ship management, marine contracting, ship supply services, forwarding, packing and moving services, stevedoring, trucking and air cargo.
These would also be the years when GAC expanded beyond the Gulf to other East Mediterranean ports and Nigeria, and so begin building a truly international shipping and transport organisation.
It was Bengt Lindwall's belief that, regardless of where they were and what time it was, customers should always be able to lift a telephone receiver to make enquires and receive immediate answers (from a GAC representative). To this end, sales and contact offices were opened in Stockholm, Oslo, London, Milan, Connecticut (USA), Athens, Hong Kong, and South Korea.
After establishing offices around the world, GAC now had a sales representative in all time zones and a Principal could always reach a GAC representative no matter what the time of day or night.
1984 Reorganisation
GAC undertook a major reorganisation initiative in 1984 in response to the need to reduce the company's dependence on the Gulf. There was also a need to review the administrative structure of GAC in order to manage its many offices and diverse operations.
In June 1985, GAC was restructured into three divisions – Shipping, Cargo, and Marine. The creation of these three distinct business areas would bring a greater focus and concentration on GAC's core business strengths.
Björn Engblom was to be the operating head and Bengt Lindwall remained as Executive Chairman.
At this time, GAC also endeavored to create a more specific identity for the company. The core values of GAC became:
• Being large is our strength
• Having reliable local partners is our guarantee
• Local knowledge is essential to do a good job for our Principals and Customers
• Scandinavian management competence stands for honesty and hard work
• Constant improvement of GAC's services will ensure quality services
• The Principals and Customers are our backbone – they are the ones paying our salaries, giving us challenges to improve, and supporting us in our daily work – they must be well taken care of.
One outcome of the reorganisation was the decision that GAC would commit funds for growth in the Asian region to diversify from its focus on the Middle East. In the 80's new offices opened up included Cochin in India, Sri Lanka, Pakistan, Philippines and expansion of the Hong Kong office.
GAC Spirit
After the passing of Bengt Lindwall in 1989, his successor Björn Engblom called a Management Information Meeting and delivered his landmark GAC Spirit speech, stating; "The GAC Spirit is our company philosophy, but it is more than that; the Spirit touches on the very soul of our Group and underpins the engagement with which we work and the way we behave towards each other...The GAC Spirit is a generator of further achievements and success. It is the vital ingredient, the mental glue, which keeps all our offices, managers and staff together in a united network."
Chevron
On July 16, 2002, GAC succeeded in gaining the contract as Chevron Texaco's "One World-One Agent".
This led to a 20 per cent increase in GAC's already substantial shipping agency activity, making it a true global shipping agency. For Chevron it meant reduced costs and improved efficiency.
Immediately thereafter, GAC set up two more offices, one in California and the other in Mississippi, close to Chevron Texaco's refineries.
GAC’s Five-Year Strategies
2003 was a year of vision and expansion. GAC launched "Vision X - Global Reach" for the period 2003 – 2007. It was a five year strategy outlined by the GAC Group to spear-head its growth from a regional shipping and logistics business to an international force.
In 2008, the next five-year strategy Vision Y – Global Values was launched taking us up to 2012, along with GAC TIME strategic management system.
GAC Corporate Academy was also launched at this time as the authorised learning and development centre for the GAC Group.
Remember that you may undertake this activity ten times maximum. As these questions may also form part of the final IGW Mastery Quiz in the last module, it will be a good opportunity to ensure you know the content.