Mike Meade, CEO, M3 Marine Group, Singapore
Captain Mike Meade, CEO of M3 Marine Group, gives an insight into the growth story of the Singapore based ship-broking and offshore marine consultancy company. In particular, he elaborates on the company’s unique competitive advantages which will help ensure the company continues to grow in a crowded, regional offshore marketplace.
Capt. Meade, you boast an impressive professional background with long tenures in senior roles across a number of markets. What was it that motivated your decision to establish M3 Marine in 2005?
My career began at sea as a sea going officer where I became a captain at the age of 26 with Swire Pacific Offshore. However, I developed a desire to further pursue my career in shore management with Swire Pacific Offshore. Thereafter, I decided to chase the dollar, so to speak, and joined Seacor Holdings in 1996. I joined Seacor Holdings just as the company migrated from the NASDAQ to NYSE and began a worldwide acquisitions spree. In my nine years at Seacor, my time was predominantly spent buying and selling offshore marine assets around the globe including in Europe, Africa, and the Gulf of Mexico. In 2000, I was offered to run Seacor’s Asian operations taking over the old Smit llloyd Fleet in Asia and building a new fleet at Jaya Holdings, prior to the offshore building boom. In 2005, I was promoted to VP International sales and moved to the UK. I could not settle, hence the birth of M3.
In 2005, the offshore marine industry was performing phenomenally and we were observing prices and rates that we had never seen before. Since I could not settle in the UK, it was a logical time to set up my own business and that is what I did in 2005. Admittedly, I ventured into this not really knowing what I was going to do but because of my commercial background, along with my technical capabilities, commercial brokerage was an easy settling point. As we developed the company, I also had a steady stream of nautical and technical work coming in through the door and therefore decided to hire people on the nautical and technical side of the business. Eventually, this evolved into what M3 Marine is today; M3 Marine Offshore Brokers, a commercial business in the brokerage segment and M3 Marine Expertise, a technical and commercial provider of consultancy services.
The company has undoubtedly coasted along a strong growth trajectory making the company one of Asia’s largest independent offshore ship-broking and marine consultancy firms. To what would you attribute this success?
Our success is a result of hard work, dedication and competence. These are, of course, the main drivers of our success but I also believe that timing and luck are two factors that have contributed to our accomplishments as well. In addition to this, we strongly believe that we add value in whatever it is that we do. Catering only to the offshore marine industry, our services are narrowly focused giving us a deep insight into the business. On the technical side we are considered industry leading experts in the narrow but growing field of FMEA’s for dynamic positioning systems (DP), integration of these systems and subsea support where we work with the tier 1 and 2 contractor’s that service the subsea sector in the oil and gas market. On the brokerage side, in addition to a comprehensive book of chartering work, we spend considerable focus on Singaporean and Malaysian owned ship builders in China. We spend a good deal of time selling ships built in China by Malaysian or Singaporean companies, on a global scale.
Being an independent company, what advantages would you say this provide you with?
Independence gives us control. As companies grow, there is a point when they get to a size where the day-to-day passion changes. M3 has now grown to employ about thirty people at this point and a substantial amount of my time is spent in people management. I quite enjoy nurturing young talent and people management whereas I tended to struggle with authority (i.e. managing those above me) when I was in corporate life. This level of independence works well for me. I like to mentor people and enjoy watching them progress and develop their skills. In addition to this, we are not under pressure to report to any external shareholders. Having said that, today, a dozen or more of our employees are shareholders in the company. As a service company, our only assets are our people and I believe this is the best way to incentivize them and to align their motivations, particularly over the long term.
Seeing that your human resources form the core of your assets, how would you rate Singapore’s pool of talent?
Singaporeans are all very well educated and this is demonstrated by the fact that most of my employees are university graduates of one form or another. Moreover, in contrast to expatriates, tapping into their skills is rather affordable. In effect, this has made the barriers to entry for expats measurably higher. Gone are the days when Western educated professionals came here seeking and getting access to expat paid jobs. Nowadays, even to gain a standard salary package, they have to compete with a highly educated local pool of talent.
Considering your experience in several markets across the world, what motivated the decision to base your operations in Singapore as opposed to Dubai or Houston?
First and foremost, Singapore is a very stable country. The environment here is very conducive to business, especially in the marine and offshore oil and gas space. I sometimes describe the so-called little red dot as a sea of calm in an ocean of madness.
For instance, I have spent 11 years living in Dubai, which I thoroughly enjoyed. But at the same time, I was only a visitor there on a work permit. I could never be a part of society. By contrast, here I am a part of society, working and competing with locals.
In a very crowded market place, both on the broking and consultancy sides, how does M3 Marine differentiate itself?
It is our dedicated hard work, competence and product knowledge that sets us apart. In my view, these are the two main elements that will help to create value for our clients and are crucial for success. It can certainly be a crowded market place but it’s the quality of our work that sets us apart from the rest.
How do you communicate your value proposition to your clients?
I suppose this is communicated primarily through repeat business. The 80/20 rule applies as much to the offshore broking and consultancy business as it does to any other business. More than 80 percent of our revenue is derived from a small pool of our clients who are obviously our repeat customers and help to spread the word on M3 Marine’s proposition. The effectiveness of this is best demonstrated by the fact that the company has grown from a one-person business to a workforce of approximately 30 in only eight years’ time.
How would you describe the revenue growth of the business since it was established?
Shipping in general is a rather volatile business. Nevertheless, M3 will this year generate a turnover in the region of US $7 million as a non-asset based service provider. Moreover, throughout the company’s history, we have always remained profitable and cash flow positive throughout the cycles. When the global financial crisis took place in 2008, I must admit I was concerned, but in fact, our best performing year so far has been 2009.
As you continue to develop your business, what are the greatest challenges you encounter in the brokering business and what trends are you observing in your niche?
Considering the cyclical nature of the shipping industry, the primary challenge for us is that our customers tend to overbuild. In a way, ship owners are their own worst enemy. When times are good, they order ships, whereas when times are bad the ship values plummet. Fortunately as a broker, we can work on both sides of the market. When things are bad, people need to sell and we facilitate that, just as we do when things are good and clients are looking to buy. In terms of trends however, the overall offshore business lags behind the price of oil; business rises with the price of oil, as it declines with falling oil prices.
In terms of technology, the general marine industry in the region tends not to apply the latest technologies to their ships, as compared to the North Sea for instance. Do you agree with this view? What is the cause for this?
It is important to note that the environment here is not as harsh as in the North Sea and is not as regulated either. Essentially, the North Sea consists of the UK and Norwegian sectors as well as to some extent the Dutch sector. Those environments are highly regulated, expensive and harsh, requiring cutting edge equipment to sustain itself. By contrast, the Asian region from a shipping perspective is a very benign environment that is also very culturally diverse. In addition to this, the region is scattered with emerging nations that are highly sensitive to pricing that are unable to afford the latest technologies you might get in the North Sea.
Nevertheless, oil and gas exploration in the region is going deeper and North Sea companies are beginning to look towards Asia with growing interest. As they spread their roots in the region and explore more challenging and deeper environments, the demand for more advanced technologies will also grow. One thing we do at M3 Expertise is to target that top tier North Sea style owners and operators where we integrate DP systems, dive systems and cranes in that higher echelon of equipment. Hence, we do focus on that higher end of the spectrum and feel that it is gradually making a stronger presence here to some extent.
It was recently announced that M3 would be entering a joint venture with Energy HR of Australia to bring their unique business model to South East Asia. In your view, what makes M3 Marine the right fit for this JV and what is the strategic motivation to develop the company in this direction?
Recruiting has always been a small part of our business operations and we were rather successful at it. I would attribute that success to our network of professional contacts that we have built up in our careers. From time to time, I would be approached by clients inquiring whether or not I knew anyone specialized in one thing or another, which I often did, and as a result decided to capitalize on that.
I suppose we did raise our head above the parapet when Energy HR of Australia was looking to expand into the Asian region; we somehow caught their attention. Following the initial meeting with the founder Sarah-Jeanne Fraser, where we discussed the possibilities available to them, it quickly became apparent that if we were to merge our human resource business line with their Asian aspirations, this could serve as a spring board to their regional ambitions and that is what we did. As M3, we can add value to the venture as being experienced in the region and well tuned to the marine and offshore business. Although still in its early days, having just launched the venture on the first of July of 2013, we have big expectations of what it can achieve.
In terms of expanding your geographical presence, are you looking towards establishing a presence in any new markets?
So far, we have already opened a fledgling office in Australia since we see that as a natural growth market for us. Apart from that, the only other market I would consider establishing a base in would be in the Middle East in the UAE. That would be an attractive opportunity for us because it makes logical sense and we are very familiar with the market there and understand its dynamics rather well.
What are your ambitions for the company over the foreseeable future?
I would like to leave a legacy behind. I enjoy what I do and I have no plans of stopping what I’m doing anytime soon. That being said, I cannot say that I have a five-year plan because if I look at what I was doing five years ago, it is very different to what I am doing today. All I can say is look at what we have achieved over the past eight years in terms of yearly growth, size, turnover and people. In that respect, I expect to continue to grow and diversify the business steadily well into the future. Also, we are hopeful that our joint venture with Energy HR will take off and spring off on its own while we continue to scour for new opportunities.