Ramesh Krishnan, Chairman & CEO, R&M Group
?Hungry and humble? is how Krishnan describes his company and himself, and customers love it. In the last five years, sales at the 130-year-old German outfitter have doubled and are on track to double again in five years.
(Article originally published in May/June 2018 edition.)
Tell us about yourself.
I’m an engineer. My parents have Indian and English ancestry, so I grew up in both cultures until the age of eight, then very much European. I’m a German, studied in Germany, settled in Germany. From my inner values and the way I think, my colleagues say I’m very German. I would rather say my heart is Indian, my soul is British, and my thought-process is German.
Okay, what does R&M do?
We are a leading global outfitter for the marine industry based in Hamburg. We provide individual and turnkey solutions for interior outfitting of all types of ships – cruise ships, ferries, offshore vessels and platforms, military and specialty vessels. We make doors, walls, ceilings, furniture, wet units, cabins, public areas, HVAC systems, stairways, galleys, piping systems – just about everything inside the ship.
But not the engine or bridge equipment, right? You don’t do that kind of thing, do you?
No, we don’t produce the engines, but we have specific requirements on how you have to set up the engine room in terms of noise control, fire protection, insulation and so forth.
When did you become CEO?
In 2011. In the last five years we’ve doubled in size, and in the next five years we’re going to practically double again while maintaining profitability throughout.
How many offices and employees are there?
We have about 2,000 employees worldwide, of whom about 500 are permanent employees. We have major facilities in Germany, the U.S., China, Norway, India and subsidiaries in Japan and Romania.
Is Europe your biggest market?
It’s divided about evenly between Europe, the U.S. and Asia – one-third Europe, one-third U.S. and one-third Asia. It varies slightly from year to year, but that’s our target split practically. It’s a very unique thing because as a global player geographical balance and exposure are very important to us. Asia is the fastest-growing region, followed closely by the U.S. and then Europe.
How about sectors? Cruise is the biggest sector, right?
Yes, the cruise industry is the biggest and fastest-growing. It’s about 55 percent of our business, followed by specialty vessels at 35 percent and the offshore and military at five percent each. Offshore is still depressed, as you know, and we are just beginning to penetrate the military market in Europe. The U.S. Navy is an untapped market for us, but we are hoping to move into support vessels.
R&M has a long and storied history dating back to 1887 and starting with cork and insulation. Tell us about that.
Yes, I see you’ve done your homework. R&M: the “R” stands for Rheinhold and the “M” stands for Mahla. They were two separate companies, and they decided to merge long before the term “mergers and acquisitions” was even coined, citing the need for synergies of volume, buying power and so forth. They started with a special manufacturing process to create more insulation in terms of sound, climate and vibration for locomotives, and then they discovered a process of compacting cork into a multilayer structure, and they patented that and used it on naval vessels.
So they started insulating ships’ structures to control all climate and noise interference. And it goes on and on from there. That’s where we come from, and if you look at the logo it’s actually the Greek letter lambda, the thermal transfer coefficient in physics, along with the letters “R&M.”
Yes, it’s a unique logo. How old is it?
It goes back to the beginning. The lambda and “R&M” are 130-years-old, but the color and parts of the design have been modified and modernized.
You also have an intriguing slogan – “Mittelpunkt Mensch.” What does it mean?
It means “human-centric.” “Mensch” is the German word for “human” and “mittelpunkt” is “midpoint.” Literally, it means “middle-point human,” but idiomatically it’s “human-centric.” The entire company is driven not by machines, not by technology, but by the human factor. We work for the comfort and safety of passengers, and it all boils down to human comfort and safety on board.
Who owns the company?
It’s privately owned. Management holds two-thirds, and one-third is held by a German private equity firm.
Tell us about the three main divisions – Alvedoor Marine, Sea Level Marine and KLH Marine. What do they each do?
They’re brands, really, that we acquired through acquisitions and then merged with our existing businesses. But we really look at the company as having two main divisions – the Newbuild Division, which is about two-thirds of the business, and the Service Division, meaning repairs and upgrades, which is about one-third. We are in the process of defining digital services in the near future.
So newbuilds are more important?
Well, we come from newbuilds. We are a 130-year-old company and we primarily come out of newbuilds, and all these service and repair and refurbishment activities practically started with our footprint in the U.S. We said we can’t just be servicing newbuilds. We also have to service the ships after they’ve been in operation for a few years and are in need of repairs or upgrades, and upgrades are especially common in the cruise industry.
Now we can say to customers that we are able to service their vessels during the newbuild phase and throughout their entire lifecycle. We think we’re rather unique in this: from new to a little bit old to convert and then service and maintenance.
Is R&M the biggest company in its field?
We believe we are the leaders in terms of revenue and geographical coverage, but that is not our goal. Our goal is to be the best.
Where would you like to see the company in five years? What is your vision for R&M?
Our vision is to be innovatively the best in this segment, interior outfitting. For all the business segments, we want to be the best. The best is a very subjective term but, measured in terms of added value, we have a very high repeat business with our customer base. Put another way, we are humble and hungry. We do not want to sacrifice quality just for the sake of growth. We want to be the best in the execution – the execution of excellence. That is where we want to be.
The second part of the vision is to be green and digital. An example is a cruise ship sailing in polar regions where you are heating the cabins at the same time you are cooling the galley where food is being prepared. We are working on digital technology to make that process much greener and more efficient in terms of energy use. You take the heat, tap it out of the kitchen and back to the cabins instead of cooling on one side and heating on the other. It’s a matter of energy transfer and balance for a ship. It’s really what the lambda in our logo represents.
I see. Impressive! How would you describe yourself?
Radical optimist. I believe the world will get better. We are here to make a difference. One challenge I’ve been facing is to consequently and systematically get rid of my ego all these years. You should have internal principles and a moral compass that you follow.
What is your biggest challenge?
People, people, people. Having the right talent in place. It’s always about people. Mittelpunkt Mensch!
Are you on the road a lot?
I do travel a lot – between Europe and the U.S., within Europe and Asia, visiting customers, managing operations, expanding, negotiating, supervising. It’s important to interact with clients to understand their ideas and business models and strategize their business together with ours. It’s all about how to create value, value, value.
What do you like to do in your spare time?
Listen to and play music – guitar, piano, drums. I used to play professionally but now it’s kind of getting revived. I do like sailing a lot. We used to own a boat, but it’s not so efficient paying the marina and maintenance. So we find it very convenient to just charter.
I’m also a voracious reader – philosophy, psychology, cosmology, religion, you name it. I’ve got a small library at home. I read at least a book a week, and I like to return to books after five or ten years to get a different angle while reading. I just finished reading The Return of the Young Prince by the Argentinian writer A. G. Roemmers. It’s a fairy tale for grownups and a follow-up to Antoine de Saint-Exupéry’s 1943 classic, The Little Prince. You should read it! – MarEx
Jack O’Connell is the magazine’s Senior Editor.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.