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As a result of their success in carrying troops from Ceylon (present day Sri Lanka)
to India during the Indian Mutiny of 1857 to 1859, and through Mackinnon's influential
contacts, the partners obtained further contracts to support a fleet of coastal
steamers carrying mail around the Indian coast with extensions to the Persian Gulf
and Singapore. In 1862, C&B raised sufficient additional capital - a total of
£400,000 - to float the company under the new name of the British India Steam
Navigation Company (BI). MMC continued to act as agents for the BI for nearly 100
Sir William Mackinnon also promoted steamer traffic to the Dutch East Indies, establishing
a Dutch-registered shipping line around Java and forming the Netherlands India Steam
Navigation Company in 1868. With the opening of the Suez Canal in 1869, BI ships
entered the Mediterranean, establishing a trunk line between London and India via
the Suez Canal in 1876. In the process, MMC became one of the greatest Eastern agency
houses, and the BI posed a mighty challenge to all other shipping lines operating
between the United Kingdom and the East, including the giant Peninsular & Oriental
Steam Navigation Company (P&O).
These events were the backdrop to the formative years of James Lyle Mackay, later
to become the first Earl of Inchcape in 1911. Born in 1852, the son of an Arbroath
shipmaster, Mackay left Scotland at the age of 20 and worked in the Customs department
of Gellatly, Hankey and Sewell, loading brokers in London for many lines including
Mackay joined MMC's Calcutta office in 1874 and through great diligence and flair,
became the heir to the Mackinnon businesses after the death of Mackinnon in 1893.
Mackay first became a partner after saving the BI's Bombay (now Mumbai) office from
bankruptcy, and was to become president of the prestigious Bengal Chamber of Commerce
a record three times between 1890 and 1893.
Mackay returned to the United Kingdom in 1894 as a director of the BI, becoming
chairman in 1913. Continuing his work on the Council of India, Mackay's growing
reputation as an outstanding public servant led to his being offered the viceroyalty
of India in 1909. Prime Minister Herbert Asquith opposed Mackay's nomination, however,
on the grounds of his commercial interests in the Subcontinent, and Mackay was offered
a peerage in 1911 by way of compensation. He chose the name of Baron Inchcape of
Strathnaver, commemorating the Inchcape Rock, located 12 miles from his home town
of Arbroath, and expressing his loyalty to the clan Mackay, whose home is in Strathnaver.
Between 1913 and 1932, Lord Inchcape personified Britain's shipping industry as
chairman of the BI and the P&O, after effecting a merger between the two lines
Less well known than Lord Inchcape's shipping activities is his consolidation of
an extensive group of commercial interests in India and beyond. These began with
his accumulation of shares in MMC and by 1950 the Inchcape family held a controlling
interest. Inchcape's chairmanship of the BI and P&O resulted in a very close
connection between MMC and the shipping line, to the extent that many observers
came to believe that they were one company.
MMC spawned a variety of other enterprises to serve the BI routes. The BI originally
employed small private firms in local ports of call as agents, but eventually replaced
them with firms within the Mackinnon complex. These all came under the control of
the senior partners and ultimately under Lord Inchcape himself.
To separate the trading businesses from the shipping line, the Macneill & Barry
partnership was developed to take over the extensive tea and merchanting operations
that Lord Inchcape had acquired in 1915. Amalgamated in 1949, Macneill & Barry
Ltd. comprised three merchant partnerships formed in the second half of the 19th
century: Barry & Company, Macneill & Company, and Kilburn & Company,
involved in tea, coal, jute, river steamers and various trading enterprises. Their
principals included the Assam Company, the oldest tea company in India; the River
Steam Navigation Company; and the India General Steam Navigation and Railway Company.
Between 1951 and 1956, Macneill & Barry took over Kilburn & Company, and
the three groups set up Pakistan-based companies. In 1965 the two river steamer
businesses were sold to the government of India.
Owing to the need to supply ship agency services to the BI, Mackinnon group enterprises
were established in East Africa, the Persian Gulf, Australia and London. In East
Africa, as Sir William Mackinnon began to open up the region to British influence,
the BI operated a steamship service. In 1872, Archibald Smith, a member of the staff
of William Mackinnon & Company in Glasgow, together with a Mackenzie man from
Calcutta, established an agency to operate as BI agents and general traders. In
1887, Sir William Mackinnon won from the Sultan of Zanzibar, the right to administer
a coastal strip of land in return for Customs revenue, which led to the founding
of the Imperial British East Africa Company (IBEA), partly in response to the buildup
of German interests in this area. Smith Mackenzie & Company took a stake in
IBEA and acted as its agents, until the charter was surrendered in 1897. Smith Mackenzie
& Company and the agency for Shell in East Africa became joint coaling agents
to the admiralty during World War I and in the 1930s gained the agencies for British
American Tobacco, Imperial Chemical Industries, and British Overseas Airways Corporation.
In 1862, when a contract was won to carry mail eight times a year up and down the
Persian Gulf, the merchant partnership that became Gray Mackenzie & Company
was formed, helping to develop navigation on the Euphrates and Tigris Rivers, and
establishing a diversified trading business in an area that was also facing German
expansionism. In World War II, Gray Mackenzie & Company acted as agents for
the British government in unloading military cargoes; the growth of its business
was helped by the spectacular development of the oil industry and the rapidly growing
need to service the expanding ports of the Middle East.
The Mackinnon complex also branched into Australia, with BI services at first managed
by the British India and Queensland Agency Company Ltd. The Mackinnon partners invested
in the formation of a major Australian shipping conglomerate in 1887, the Australasian
United Steam Navigation Company (AUSN), formed with a capital of £600,000.
In 1894, Mackay was appointed to the board of the AUSN and, in 1900, spent several
months in Australia successfully restructuring the business. In 1915 he created
a new merchant partnership, Macdonald Hamilton & Company, formed by two trusted
Mackinnon appointees, B.W. Macdonald and David Hamilton. The AUSN, which had once
owned 42 steamers, declined in the face of increasing competition from railways
in the 1920s, and Macdonald Hamilton & Company diversified its activities into
mining, pastoral management, and operating the P&O agencies in Australia. The
P&O acquired Macdonald Hamilton's P&O-related activities in 1959 and 1960.
These diverse Mackinnon group interests were consolidated and reorganized during
the 1950s, coming together as Inchcape & Company Ltd in 1958 on the initiative
of the third Earl of Inchcape, James Lyle Mackay’s grandson. Tax considerations
necessitated the conversion of these entities into private limited companies - whose
former partners became the principal shareholders- controlled through London-based
subsidiaries. Also in 1958, Inchcape & Company became a public company through
a public offering of 25 percent of its equity, and starting in 1958 embarked on
a program of growth and diversification, principally through acquisitions.
During the 1960s and 1970s, under the leadership of the third Earl of Inchcape,
the company expanded to over 150 times its previous capitalization, due principally
to a series of successful acquisitions, especially those of the Borneo Company in
1967; Gilman & Company in 1969; and Dodwell & Company in 1972.
The merger with the Borneo Company almost doubled the size of Inchcape overnight,
bringing in new interests in Canada, the Caribbean, Hong Kong, Malaysia, Singapore,
Brunei, and Thailand.
In 1985 Gellatly's largely North European agency network was acquired; this gave
a European base which was developed further in Greece in 1989, the UK and France
in 1992, and Suez, Turkey and Scandinavia in 1993.
Through a variety of acquisitions from 1990 through 1993, Inchcape expanded its
shipping businesses in China, Korea, Vietnam, Indonesia, Canada, Turkey and Ecuador.
With the acquisition of Southern Steamship in 1990, Inchcape extended into the North
American shipping market. The Group subsequently consolidated its position on the
West and East coasts with the acquisitions of Williams Dimond in 1991 and Lavino
In 1993, ISS was established to manage the Group's global shipping operations. The
primary task was to transform what was then a loose federation of ship agents into
an integrated international network with defined and common service standards worldwide.
In 1999, in a move to focus on its burgeoning motor trade, the Inchcape Group divested
ISS which was purchased by Electra investment Trust Plc, a British investment group.
Electra fostered the strategic goals of ISS providing finance for acquisitions and
technology advances, which enabled ISS to further develop its role as the world’s
leading ship agency.
In January 2006 Electra sold ISS to Istithmar PJSC, a major investment house based
in the United Arab Emirates focusing on private equity, real estate and other alternative
investments. Established in 2003, Istithmar was created with the key mission of
earning exceptional returns for its investors while maintaining due regard for risk.
With over 300 offices worldwide and a team of 3,800 professional and committed staff,
ISS is today the world's largest independent marine management company. Through
web-based technology we have been able to transform both the speed and accuracy
of the operational, financial and port information provided to our clients by our
With Istithmar’s support, ISS is now pursuing its strategic aims with the
same confidence and commitment that has characterized the Group’s activities
throughout its long and proud history.
The above article includes extracts from the International Directory
of Company Histories, Volume 50: Inchcape PLC, published by St James Press 2003.
Copyright is duly acknowledged.
Jones, Stephanie, Trade and Shipping: Lord Inchcape 1852-1932, Manchester
University Press, 1989
Two Centuries of Overseas Trading: The Origins and Growth of
the Inchcape Group , London: Macmillan, 1986.