V.Group's Ian El-Mokadem targets expansion in crowded market

With its new, well-bolstered owner and ambitious CEO Ian El-Mokadem, V.Group is determined to grow its share of a market with a constant inflow of new stakeholders. However, ship management is just one of the six pillars where El-Mokadem sees obvious growth opportunities, he tells ShippingWatch.

V. Group Norddeutsche Reederei
Photo: V. Group Norddeutsche Reederei

One could say that V.Group's vision is basically to provide a one-stop shop for marine support services, apart from the actual vessels. With its six business units, there are few segments which the huge service provider does not cover – that is, if one disregards those which built the ships and those who own them.

The company dates back to 1984 and has achieved a leading position on the ship management scene and is striving to bolster its service units.

In that context, Advent International's acquisition of a majority stake in the group two years ago is an important starting point, just as when Ian El-Mokadem took over as CEO a year ago is pivotal to understanding the direction of the group today.

Entering with no maritime experience, El-Mokadem has completed a management team reshuffle in 2018, with people rooted in the shipping industry and not least with an overweight of ex-Maersk executives.

Ship management (ship and technical) is where V.Group plays a dominant role globally, but it is also a business in which old and new competitors are eager to launch ventures in a development that is congesting the market notably.

here are many new companies entering, but reputation and track record are very important elements"

Ian El-Mokadem, CEO, V.Group

Among the old peers are Anglo-Eastern, V.Group's main competitor. Among the new ones are Germany's Zeamarine, all working to get a slice of what appears to be a promising piece of a shipping market under pressure. Schulte is another traditional shipowner who is exploring whether to bet on ship management as well.

The market, however, seems to maintain growth, and according to El-Mokadem, V.Group has economies of scale and funding, which make a difference.

"Scale is only getting more important in the technical management industry, which must be able to handle the increasing complexities of the shipping industry, including environmental regulations. Experience is crucial, so it is difficult to establish a business. There are many new companies entering, but reputation and track record are very important elements. Alongside this, scale of economy is important to grow and to make investments, and we have a very supportive owner," he explains in an interview with ShippingWatch.

Six strategic pillars

Apart from the two technical and crew management units, V.Group includes two service businesses (crew and technical) and then insurance and supply chain business units. And all of them are expected to grow – organically at first, "and once you have earned the right," the next step may be taken with acquisitions.

V.Group recently took over German Norddeutsche, "a carrier in the Hamburg market with 150 years of history," and the deal could be the first in a series of take-overs in Hamburg.

Last year, Copenhagen-based Dania Ship Management joint venture was founded with Nordic Tankers, headed by former Thome Ship Management CEO Carsten Ostenfeldt "to gain its share of the Danish shipping community."

Ian El-Mokadem CEO V Group
Photo: V Group

Today, however, resources are focused on shaping V.Group's existing six strategic pillars – with investments in IT and capacity building. The blueprint, if you ask El-Mokadem, is rather simple. If you ask the customers, they should "recognize the company for an excellent service, because if they don’t, anything else will fall."

"Do you like our product? That is the question," he explains.

V.Group is actively keeping an eye on the market in its search for opportunities, and according to information provided to ShippingWatch, the company had a look on Seven Seas. This is information El-Mokadem does not want to confirm.

"But we are active in the market, and any company who can meet our scanning criteria is in principle relevant," he comments.

Former Maersk people

The same day in the summer 2017 that V.Group named Ian El-Mokadem as its new chief executive, former APM Terminals executive Martin Gaard Christiansen was announced as CCO, thus concluding the overhaul of the company’s leadership.

Rothschild has been looking for new owner of Seven Seas

El-Mokadem replaced former Maersk Tankers CEO Hanne Sørensen, and in that respect the company has often set its eyes on Maersk people. Jesper Kjædegaard was picked for the board the same year but is no longer with the company. Today, apart from Gaard Christensen, two former Maersk people are members of the executive team. Allan Falkenberg and Franck Kayser.

"We share some of the same values," explains El-Mokadem.

With around 3,000 shore-based employees in over 60 offices worldwide, and a pool of over 44,000 seafarers, people around him describe him as a person who honestly works for the well-being of his employees.

"Values are what makes a company. You see businesses going badly because they lose their values. I put values before anything else. I am obsessed with values and do not want to deal with companies who don't pay their crews."

So, if you were presented with a commercially interesting contract, which could jeopardize the values you believe in, what would you do?

"I would not be interested in dealing with them."

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