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By Daphne Lee
MR MAHESH Sivaswamy, managing director of Orient Express Lines (Singapore) (OEL), admits that times are tough for the shipping industry.
However, OEL has managed to survive by being proactive in the business with specific strategies and honing its expertise in the local markets that it serves.
OEL (Singapore) was incorporated in 2001 and is part of the Transworld Group of Companies founded by Mr Mahesh's late father in 1976.
OEL serves as a hub port and a regional headquarters that provide common carrier feeder services connecting the Indian sub-continent and South-east Asia.
One strategy the company has employed to survive in the economic crisis is to keep operating costs low.
'We had an equal mix of ships that we own versus ships that we charter. Most of the ships that we chartered have ended their leases and now we have partners with whom we have vessel sharing agreements,' says Mr Mahesh.
OEL also works with partners to keep its operating costs low. For example, the company charters its ships from Shreyas World Navigation, its Singapore ship-owning company which owns five container feeder vessels.
For its financial year ending March 31, 2009, OEL is 'keeping its head above water with a small profit'.
'This is a significant milestone for the company, especially when the shipping industry is very much uncertain,' says Mr Mahesh.
Despite the tough times, he says it is the good relationship the company enjoys with its banker, DBS, that has been helpful for the business.
OEL has also been receiving the Enterprise 50 (E50) award for the past four years. This year, it will be recognised with a special award for being on the E50 list for five consecutive years.
'There is definite joy receiving it five years in a row, especially since the last two years have been very challenging and we were not sure whether we would make it,' says Mr Mahesh.
'I am glad that when people look at the company, they think our strategies are right.'
He is also glad that OEL can use the E50 award as a branding in its marketing collaterals and to further boost the confidence of the bank in the company and the direction it is heading.
OEL does not intend to rest on its laurels just yet, as he adds that the company is, after all, guided by market forces, and he thinks that shipping is in overcapacity, at least till next year.
'We will, however, remain focused in our activity and compete more in our business.
We are committed to staying in the business for as long as it takes for the turnaround to happen.'
This article was first published in The Straits Times.
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