Dubai World asset sale includes Inchcape Shipping Services of Campbeltown origin
published this on 6:29 pm, Monday, 8th February, 2010Business| Community News| Kintyre | Comments (rss) | Respond | Ping |
Istithmarh, the investment wing of £14BN debt-laden Dubai World, the world’s largest independent marine management company and owner of the QE2 – now also likely to be sold, has already begun the sale of transport assets like Inchcape Shipping Services.
The Inchcape disposal – said to have a price tag of around $700 milion, will impact on Scotland, as the UK port agent provides services at a wide spectrum of Scottish ports and harbours. These include, in alphabetical order – and first taking the Argyll harbours:
- Craignure
- Iona
- Oban
- Port Askaig
- Port Ellen
- Tarbert
- Tobermory
Elsewhere in Scotland, ISS is present at:
- Aberdeen UK
- Ardersier
- Castlebay
- Craignure
- Cromarty
- Dundee
- Dunvegan
- Fair Isle
- Flotta
- Fraserburgh
- Inverness,
- Invergordon
- Rhum
- Lerwick
- Lochmaddy
- Lyness
- Montrose,
- Nigg Bay
- Peterhead
- Portree
- St Kilda
- Stornoway
- Stromness
- Sullom Voe
- Uig, Skye
The Campbeltown origin
Interestingly, Inchcape Shipping Services (ISS) began as the brainchild of two merchants from Campbeltown in Kintyre. Meeting in Calcutta in India in 1847, the two men, William Mackinnon and Robert Mackenzie, formed a general mercantile partnership, Mackinnon Mackenzie & Company (MMC).
This arose from an insight similar to that of coach tour operators in recent years, seeing them buy or build their own hotels. Mackinnon and Mackenzie moved from straightforward trans-continental trading to getting into the ocean-going transport that made it possible. Their company was very successful.
William Mackinnon, later Sir William Mackinnon
Mackinnon seems to have been an entrepreneur on fire with the opportunities of empire.
In 1856, when he was only 34, he founded the Calcutta & Burmah Steam Navigation Company (C&B) and got the contract from the East India Company for carrying the mails between Calcutta and Rangoon. He incorporated the company in London with a capital of £35,000, £7,000 of which came form his company with Mackenzie – MMC, who then became agents for the new shipping line.
C&B carried troops from Ceylon (now Sri Lanka) to India during the Indian Mutiny of 1857-1859.
Then Mackinnon’s enterprise and influential contacts brought in further contracts to support the development of a fleet of coastal steamers carrying mail around the Indian coast and on to the Persian Gulf and Singapore.
In 1862, C&B raised sufficient additional capital – a total of £400,000 (imagine what that was worth in 1862) – to float the company newly as the British India Steam Navigation Company (BI). The original partnership, MMC, went on to act as agents for BI for nearly 100 years.
By 1868 the then knighted Sir William Mackinnon had establishing a Dutch-registered shipping line around Java and formed the Netherlands India Steam Navigation Company.
When the Suez Canal opened in 1969, BI ships entered the Mediterranean and had a trunk line going between London and India via the Suez Canal by 1876.
By now MMC was one of the greatest Eastern shipping agencies and the British India Steam Navigation Company (BI) was a challenger even to the great Peninsular & Oriental Steam Navigation Company (P&O) as well as to all other shipping lines running between the UK and the East.
James Lyle Mackay, later the first Earl of Inchcape
Alongside this Campbeltown-bred spirit of enterprise was the career of another Scot who was to bring the Mackinnon and Mackenzie empire under its Inchcape brand name today.
Born on the east coast to an Arbroath shipmaster, James Lyle Mackay (who was to become the first Earl of Inchcape in 1911) left Scotland when he was 20 and worked in the Customs department of Gellatly, Hankey and Sewell, who were London-based loading brokers for many shipping lines, including BI.
He joined MMC’s Calcutta office in 1874 and through the business acumen he brought to the company, was named as heir to the Mackinnon businesses, inheriting after Mackinnon died in 1893. Mackay then returned to the United Kingdom in 1894 as a director of the BI and became its chairman in 1913.
From a base of having been President of the prestigious Bengal Chamber of Commerce three times between 1890 and 1893 – a record, he worked on the Council of India, with a growing reputation as an outstanding public servant.
This led to his being offered the viceroyalty of India in 1909 – but the Prime Minister of the day, Herbert Asquith opposed his nomination on the grounds of his commercial interests in the subcontinent.
To sooth the snub, Mackay was offered a peerage in 1911 and chose the name of Baron Inchcape of Strathnaver.
This title memorialised the legendary Inchcape Rock where Robert Stevenson later built the equally legendary Bell Rock Lighthouse and situated 12 miles from his home town of Arbroath, It also celebrated the Mackay clan based in Strathnaver, one of the poignant clearance valleys running out to the north coast of Scotland.
World domination
By 1932 Lord Inchcape was the leading figure in Britain’s shipping industry, having brought about a merger between BI and P&O in 1914 asnd acting as chairman of both shipping lines.
The founding enterpreneurial insight of (largely) Mackinon and Mackenzie – that, rather than subcontract, you brought businesses wihtin the company umbrella, keeping all spend close to home – was Lord Inchcape’s mantra too.
BI first employed small private firms in local ports of call as agents but eventually replaced them with firms within the Mackinnon network of businesses.
An increasingly complex spectrum of diverse Mackinnon group interests were brought together in 1958 as Inchcape & Company Ltd, at the instigation of MacKay’s grandson, then the third Earl of Inchcape.
The entrepreneurial spirit obviously held true in the genes, because in 1958, Inchcape & Company became a public company through a public offering of 25 percent of its equity and set out on a programme of growth and diversification, principally through acquisitions.
Through the 1960a and 1970s these acquisitions under the third Inchcape, grew the company to 150 times its previous capitalisation.
The series of acquisitions carried on in the 1980s and 1990s until, in 1993, Inchcape Shipping Services (ISS) was created to manage the Group’s global shipping operations. What was then little more than a loose federation of shipping agents became an integrated worldwide network.
The divestment of ISS, eventually to Istithmarh
In 1999, in a switch of focus to its growing motor trade interests, the Inchcape Group sold ISS to Electra investment Trust Plc, a British investment group. Electra continued the acquisitions and technological advances, taking ISS to being he world’s leading ship agency.
In January 2006 Electra sold ISS to Istithmar PJSC, the major investment wing for Dubai World, now in discussions to sell off Inchcape Shipping Services.
Ironically, with so many of Scotland’s ports, little and large, under the ownership of Istithmarh through ISS, one that is outside the company’s portfolio is Campbeltown, the home base of the two men, William Mackinnnon and Robert Mackenzie who started it all back in Calcutta in 1847, with MMC.
What next? Let’s just pray Inchcape Shipping Services doesn’t get sold to Clydeport. Loch Striven knows all about that outfit – and so does all of our own extensive audience.
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