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Gulf Agency Company Ltd.

Gulf Agency Company Ltd.

Corporate Head Office
Jebel Ali Free Zone
P.O. Box 18006
Dubai,
United Arab Emirates
Telephone: (971) 4 881 1
Fax: (971) 4 881 1
Web site: http://www.gacworld.com

Private Company
Incorporated:
1956
Employees: 6,000
Sales: $1.2 billion (2005 est.)
NAIC: 484110 General Freight Trucking, Local; 484121 General Freight Trucking, Long-Distance, Truck-load; 484122 General Freight Trucking, Long-Distance, Less Than Truckload; 484220 Specialized Freight (Except Used Goods) Trucking, Local; 484230 Specialized Freight (Except Used Goods) Trucking, Long-Distance; 488320 Marine Cargo Handling; 488330 Navigational Services to Shipping; 488390 Other Support Activities for Water Transportation; 488490 Other Support Activities for Road Transportation; 488510 Freight Transportation Arrangement; 541614 Process, Physical Distribution, and Logistics Consulting Services

Gulf Agency Company Ltd., which trades as GAC, is a leading global provider of shipping, logistics, and marine services. Its 200 offices span five continents and are staffed with knowledgeable locals. It handles logistics for a slew of multinational corporations. As part of its marine services, a fleet of crew supply vessels brings food and fresh water to oil platforms and passing freighters. Originally formed in Kuwait in the mid-1950s by Swedish shipping interests, the company is the largest shipping agent in the Middle East and operates at more than 1,000 locations around the world. Its international reach has been enhanced through acquisitions such as that of Benair Freight in 2005. GAC has a number of regional affiliates with local partners as majority shareholders. It also maintains a number of marketing alliances for regions of the world it does not cover on its own.

ORIGINS

Gulf Agency Company (GAC) was originally set up as a Kuwait joint venture in 1956 by a top Swedish shipping agency, Nyman & Schultz, looking to expedite things at the country's busy seaport at the dawn of the containerized shipping age. Nyman & Schultz dated back to Carl Oscar Strindberg's shipping agency, which had been formed in Stockholm in 1861 and acquired by the Lindberg family in the 1920s.

Offices were soon established in nearby Saudi Arabia and throughout the Arab world. Branches in Lebanon, Syria, Egypt, and Libya would eventually be closed, however, due to the outbreak of war or nationalization. Egypt closed the Suez Canal for eight years following the Six Day War with Israel in 1967. After it was reopened, GAC handled traffic to the Suez Canal from its Athens office. GAC also had opened an office at the Jebel Ali Free Zone in Dubai.

GAC entered the Nigerian market in the 1970s, first overseeing ships to haul cement to the country's construction boom. Oil development later brought more business.

GAC opened an office in Jordan in 1985. Within about ten years, reported Lloyd's List, it was the country's leading shipping agent. The shipping business in the Persian Gulf was going through an unprofitable couple of years, exacerbated by the war between Iran and Iraq. In January 1985 GAC began operating a less-than-container-load (LCL) freight forwarding service in the Persian Gulf through its Cargo Gulf unit, which grew quickly following the end of hostilities in the region.

NEW FRONTIERS IN 1990

The fall of the Soviet Empire opened new opportunities for GAC. It became the first international shipping agent in Poland in November 1989. GAC introduced a cargo service for the former Soviet republics several years later, in 1997, attracted in part by Azerbaijani oil developments. At the same time, GAC was expanding its reach to the east, working in partnership with a local carrier in Indonesia to begin operations there. A Singapore unit had opened a few years earlier.

GAC staff had to be evacuated from Kuwait during its invasion by Iraq and the subsequent Operation Desert Storm. Growth soon resumed following this turbulence. A new door-to-door air freight unit, Air Gulf Express, was launched in May 1991. It began with connections from the Middle East to Europe and the United States. (Oil industry forwarder specialist Danaher America Inc. was its U.S. freight forwarding partner.)

In 1993, GAC spent $3 million to open a large, technologically advanced freight center in the emerging trade center of Dubai. It had a capacity exceeding 3,000 containers a year, according to Lloyd's List, and was operated by GAC's freight forwarding division, Gulf Express Freight. A portion of the facility was temperature-controlled.

GAC's Dubai distribution facility was instantly successful with multinational corporations, and underwent a $10 million upgrade within a couple of years. The shipping agent business was becoming more competitive, an official told Lloyd's List. The Dubai center offered co-packing and online services in addition to warehousing.

Besides distribution and shipping agency, GAC's third main line of business was shipping support services. This included representation for property and indemnity clubs (a kind of marine insurance), repair facilities, and the ability to ferry cargo, supplies, or crew to or from passing ships that did not want to spare the time or expense of docking at port. The company was expanding the scope of its services, transporting heavy equipment such as construction cranes.

In the mid-1990s, GAC began coordinating its European ports through a common hub office. The center of GAC's trade, the distribution facility in Dubai's Jebel Ali Free Zone, was expanded yet again in the late 1990s, bringing its total capacity to 75,000 cubic meters. It also began building a 10,000-square-meter facility in Bahrain in 1999.

GAC benefited from the privatization of the agency business at the Suez Canal in 1998. The company subsequently formed GAC Egypt. The company was also active at the other end of the continent. Due to interest from its existing multinational clients in Nigeria, GAC launched operations in Angola. The company reported that within a few months, it had a 50 percent share of the tanker market there, which was booming following recent deepwater finds. GAC also was beginning to operate in South Africa.

COMPANY PERSPECTIVES

For nearly half a century, seafarers have been cabling, phoning and, more recently, e-mailing GAC, confident of a professional and courteous reception when they reached port. And it's precisely that peace of mind that has come to be associated with every aspect of GAC's operations today. From its start as a regional player, GAC has grown to become the largest independent shipping and transport services provider in the world. Its hallmark: providing clients with the highest standards in shipping, logistics and marine services. GAC has evolved into a modern, sophisticated enterprise while retaining some reassuringly traditional values. Belief in the importance of face-to-face contact keeps it an unusually personal kind of company in an otherwise technological age. Awareness that other suppliers can offer similar services has only reinforced an abiding determination to do things well. And lessons learned in locations far off the beaten path serve as a reminder that the world is still a big, and sometimes formidable, place.

By 2000, GAC had about 4,000 employees and 160 offices in 60 countries around the world. It had amassed one of the largest truck fleets in the Middle East, noted Traffic World. As oil development intensified in the Caucasus, GAC opened an office in the Black Sea port of Novorossiysk in May 2001.

NEW HEADQUARTERS IN 2002

Headquarters were relocated from Athens to Dubai, the center of the company's trade, in January 2002. The new offices cost $4 million. The company continued to expand in Europe, adding offices in Denmark and Sweden.

GAC's freight forwarding unit, GAC Cargo Systems, was growing rapidly through alliances and acquisitions. In 2001 it began a marketing agreement with Benair Freight International Limited, a U.K. freight forwarder focused on the Asian market. GAC bought Benair's Malaysian subsidiary within a year. It also acquired the Singapore shipping agency operations of Shell International Eastern Trading Company.

GAC began a marketing agreement with Emirates SkyCargo in November 2001. The deal allowed Emirates to offer its customers door-to-door service, while providing preferential rates and treatment for GAC's air freight.

GAC was restructured in 2002 into four geographic areas and three business units. GAC Marine Logistics, a marine parts supply business, was launched in 2003. The company was expanding its operations in India and West Africa. At the same time, GAC was undergoing an initiative to reduce costs and increase productivity in a competitive market. According to Lloyd's List, GAC was seeing a dramatic increase in project cargo at its Abu Dhabi base related to construction of the $3.5 billion Dolphin gas pipeline and a desalination plant.

GAC teamed up with Australia's Adstream Agency in 2002. The alliance allowed each to expand its geographical reach by sharing marketing and IT information. Other alliances were unveiled in the next two years, with U.S.-based Rice Unruh Reynolds, South Korea's Unipros, Malaysia's Kudrat Maritime, Panama's Wilford & McKay, and the Ultramar Group of South America.

In 2003, the company revamped its corporate identity and logo. The initials "GAC" became the global brand rather than the traditional "Gulf Agency Company." The company adopted a new catchphrase, "wherever you go." One service offering GAC was growing was its door-to-door deliveries.

GAC won a huge contract to handle United Nations food shipments to Iraq following the U.S. invasion to ouster Saddam Hussein. The war devastated Dubai's leisure cruise industry, however, for which GAC was the leading agent. The company's affiliate in Saudi Arabia was seeing more cruise business due to the opening of that market to nonreligious tourists.

A company official told Lloyd's List that while the freight forwarding business was extremely competitive, GAC felt it had a distinct advantage in operating in emerging markets. It was planning further expansion in Southeast Asia, Africa, and Latin America.

The company's reach from Europe to the Far East was strengthened by the 2005 purchase of Benair Freight International Ltd. and Benair Freight Pte from the United Kingdom's Dart Group plc for $9 million. Benair, which had been in business since the mid-1970s, offered GAC more truck and train capacity.

PRINCIPAL DIVISIONS

Shipping Services; Logistics Services; Marine Services.

KEY DATES

1956:
Swedish shipping interests set up Gulf Agency Company (GAC) in Kuwait.
1958:
GAC Saudi Arabia is formed.
1967:
Operations in Bahrain begin.
1983:
GAC enters East Asia with the opening of a Hong Kong office; the first office in India is opened.
1984:
GAC Singapore begins operations.
1985:
The Jordan office opens; the CargoGulf less-than-container-load freight forwarding service is launched.
1987:
Headquarters are established in Athens.
1990:
GAC begins operations in Indonesia.
1991:
Air Gulf Express is launched.
1993:
A new distribution center opens in Dubai.
1997:
Cargo service to former Soviet republics is launched.
1998:
GAC begins operations in Angola and South Africa.
2002:
Headquarters are relocated from Athens to Dubai.
2003:
GAC Marine Logistics is launched.
2005:
Benair Freight is acquired.

PRINCIPAL COMPETITORS

Barwil Agencies A.S.; Globalink Transportation & Logistics Worldwide LLP; Hull Blyth & Co.; Inchcape Shipping Services; The Kanoo Group.

FURTHER READING

"Adstream Agency in Alliance with Gulf Agency Company," Lloyd's List Daily Commercial News, October 8, 2002, p. 1.

Bangsberg, P. T., "Gulf Agency Acquires Asia Forwarder," Journal of CommerceJoC Online, January 9, 2002.

"Blow to Tourism Has No Impact on Other Sectors," Lloyd's List International, February 25, 2002.

"Building Boosts Project Cargo Volume," Lloyd's List International, April 17, 2002.

"CargoGulf Starting Weekly Service to Middle East Ports," Business Times Singapore, June 15, 1989, p. 1.

"A Continuing Decline in Freight Rates ," Middle East Economic Digest, January 31, 1987, p. 27.

"Dart Group Agrees £5.1M Disposal," Dow Jones International News, August 31, 2005.

Everden, Kathi, "Special Report on Dubai: GAC Opens Freight Centre," Lloyd's List, May 28, 1992, p. 17.

"Foresight Pays Off As GAC Spreads Its Net to Over 40 Countries," Lloyd's List, April 29, 2005, p. 19.

Fromme, Herbert, "Special Report on Dubai: Freight '94Gulf Agency Expands Warehouse Facility," Lloyd's List, November 3, 1994, p. 13.

"GAC and Emirates SkyCargo Sign First Global Agreement," Middle East Company News, November 18, 2001.

"GAC Base at Jebel Ali," Lloyd's List International, April 3, 2002.

"GAC Buys Freight Forwarder," Traffic World, September 12, 2005.

"GAC Drives Its Logistics Business," Lloyd's List International, November 18, 2002.

"GAC Launches New Inbound Service," International Freighting Weekly, May 20, 1991, p. 21.

"GAC Markets Mina Sulmanone Stop Cargo Centre," Lloyd's List International, June 22, 2001.

"GAC to Invest $10M in New Jebel Ali Facilities," Lloyd's List International, July 2, 1993.

"GAC to Use Dubai to Tap the African Markets," Khaleej Times, January 30, 2003.

"GACRUR to Boost Global Port Agency Services," Middle East Company News, August 30, 2003.

"GAC, Wilford & McKay Sign Global Network Agreement," Kuwaiti News Digest, January 20, 2004.

"Gulf AgencyGAC's Historic Roots Shape Its Cruise Agency Style," Dream World Cruise Destinations, February 2002, p. 98.

"Gulf Agency Company (corporate restructuring)," Air Cargo World, November 2002, p. 71.

"Gulf Agency Company Gears Up for Expansion As Project Cargo Grows," Lloyd's List, February 13, 2002, p. 17.

"Gulf Agency Company (GAC) Is to Further Expand Its Ship Supply Operations in the United Arab Emirates with the Introduction of a New 110 Ft Steel Crew/Supply Launch," Lloyd's List International, February 3, 1987, p. 2.

Hastings, Philip, "Demand Brings a Break with Tradition," Middle East Economic Digest, September 13, 1993.

Kennedy, Frank, "Sea Views: GAC Sets Challenging Global Goals for 2004," Gulfnews.com , February 16, 2004.

Lewis, Ian, "GAC to Increase Staff in China," Lloyd's List International, January 28, 1991, p. 2.

Lin, Tham Choy, "GAC Group Buys Benair Freight Malaysia," Bernama Daily Malaysian News, January 8, 2002.

Nadkarni, Shirish, "Special Report on Sri Lanka: GAC Shipping Seeks Growth," Lloyd's List, April 16, 1999, p. 9.

"Name Change Underpins GAC's Global Ambitions," Lloyd's List, October 1, 2003.

"National Shipping Remains One of the Largest Agents," Lloyd's List International, October 11, 1994.

Osler, David, "Special Report on Jordan: GAC Jordan Now a Major Ship Agency," Lloyd's List, September 30, 1996, p. 7.

Parker, John, "Middle East Consumer Market: Dubai Is the Region's Commercial Capital and the Gulf Agency Is Its Largest Shipping Agent," Traffic World, November 20, 2000, p. 28.

Rissik, Dee, "Old Rivals and Newcomers Fight for Angola Oil Supremacy," Lloyd's List, February 27, 1999, p. 3.

"Ship Agent GAC Is Here to Stay in Both Shipping and Logistics," Lloyd's List, April 27, 2004, p. 12.

"Shippers Wait for the Boom," Middle East Economic Digest, October 21, 1988, p. 11.

Tan Hua Joo, "Joint Effort to Transport Heavy Machinery," Business Times Singapore, April 16, 1992.

Taylor, Alan, "Gulf Express Demand High," International Freighting Weekly, November 11, 1991, p. 24.

Thomas, Karen, "New GAC Run Targets Angola Offshore Sector," Lloyd's List International, September 8, 1998.

, "Special Report on Qatar: Gulf Agency Takes on Second Club," Lloyd's List, April 7, 2000, p. 11.

Urquhart, Donald, "Gulf Agency Gets Massive UN Food Aid Contract; ME Shipping Firm to Handle UN Chartered Vessels Moving Aid to Iraq," Business Times Singapore, April 4, 2003.

"Versatile GAC [Saudi Arabia] Handles 2,000 Ships Per Year," Lloyd's List, June 27, 2002, p. 15.

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