“Your company is the first thing. It goes before your wife, it goes before your family, because it is so demanding. When your company is calling you, you cannot attend to anything else. At least that has been my way and my family have fortunately understood this.” Eduardo Davila, president of Joaquin Davila & Cie, spoke on his storied journey to Justin Archard.
Tucked in a smart downtown Madrid side street and on the third floor of an unassuming terrace building is the headquarters of Joaquin Davila & Cie, the company under which the shipping and logistics Grupo Davila operates.
Eduardo Davila, president of Joaquin Davila & Cie, is the third-generation Davila to head the organisation and now at 66 years of age is preparing to hand over the reins to his son, Pelayo. I paid Eduardo a visit to learn of his remarkable life, his thoughts on succession (not the TV series), and what it takes to build a successful company.
It is not the first time I have met Eduardo but I am nevertheless a little nervous; the lightness-of-stomach kind of nerves you have when you meet people you admire – similar to a time I briefly exchanged eye contact with a rockstar hero of mine in a deserted Icelandic wool shop. I later kicked myself for not seizing the opportunity of a conversation.
Impeccably tailored
As I am led into Eduardo’s office he is already standing by his desk ready to receive me. Open necked and impeccably tailored, he is warm and generous with his welcome. Think Roger Federer or Sean Connery, there is an effortlessness to his personality but a focus and steeliness in his eyes.
For anyone with even a passing curiosity in shipping history, Eduardo’s is an office that you can be left in for hours and never be bored. Paintings, photos, maps, brasswork and piles of books all have their tales to tell. In a glass cabinet the silverware of a successful racing driver and on the table a lovingly compiled 200-page anthology of the family company’s more than 100-year history. Eduardo has occupied this space all his career and it was his father’s before him. The walls, floors and everything in it are suffused in the history.
As we settle into a couple of comfy chairs, coffee is served and I ask Eduardo about his plans for the future. He had mentioned previously that he intended to retire before now – but something had obviously kept him from seeing it through. Still fit and engaged, he will have been at the head of the organisation for 50 years in 2024 and in that time, he has transformed the company fortunes from a struggling shipowner and liner agency company into a diversified shipping, transport logistics, agency and industrial group that employs over 500 people.
“Yes, I will retire,” he says. “I already tried to but Pelayo and Jaime [Jaime Mauriño – Eduardo’s close friend, colleague and ceo of Altius Forwarding – a Davila company] asked me to stay on. So here I am.”
The proud family company’s name carries high regard in Spain and nearly everyone in the Davila family, whether in Spain or overseas, works in the organisation somewhere. Eduardo has three children – Roman, Pelayo and Flavia – all of whom were offered an open invitation to join the ranks. Pelayo and Flavia took up the invitation. His eldest son Roman, like his father, has cars in his blood and chose a path in the automotive industry, initially taking him to the Mini Cooper plant in Chile. Today, you will find him at the Ferrari workshop in Madrid.
The proud family company’s name carries high regard in Spain and nearly everyone in the Davila family, whether in Spain or overseas, works in the organisation somewhere.
The company is being readied to transition to Pelayo’s leadership at some point in the near(ish) future for which Pelayo has been preparing a long time, working inside Davila businesses with no management responsibilities. Stints at Peter Doehle, Kuehne + Nagel and SAL Heavy Lift in Hamburg have further helped him to broaden his experiences and see the industry from a variety of viewpoints.
“It is a very soft transition,” says Eduardo. “There is no hurry. Both his brother and sister trust him totally.”
Our conversation moves easily through one topic to another. The history of the family and the company is as fascinating as its imprint is important to Spain’s maritime history. I notice though that Eduardo never refers to himself as a leader, manager or ceo, preferring the epithet entrepreneur. This appears fundamentally important to his own zeitgeist. A creator of new opportunity, he has built teams from the best people he can find to manage and operate the businesses he develops.
Essential advice
In passing on his experience to Pelayo he says: “The most important thing is to surround yourself with the correct people. You must bind your destiny to theirs. It is something you have to share.”
But let us go back to 1986. The company was controlled by two families – Eduardo’s mother’s side and his Uncle Ramón’s family. Eduardo – the eldest of 10 siblings – had found himself unexpectedly the head of the family following the untimely death of his father Román Fernández Davila in 1974. In the days of his father, who Eduardo describes as “a great man, one of the top entrepreneurs of Galicia,” the company was a conglomerate of 6,000 employees with interests in shipyards, shipowning, industrial manufacturing and agencies. Fire sales of the shipyards and the manufacturing necessarily followed his father’s passing to manage a crippling debt pile, leaving the shipowning and agency activities. Shareholding was very dilute, however, therefore effective influence and change was difficult.
Having spent time in the company without any real purpose and harbouring a love of driving (an earlier accident that put him in bed for three months did not deter him), Eduardo bought what he describes as a modest car. “It was the only thing I could afford,” he says, and started to compete at hill climbs.
In his first year he became the Castilian champion and, revved up with youthful confidence, upgraded to a Renault 5 Turbo with which to challenge for the Spanish championship. Anyone who can recall this mid-mounted rear wheel drive rally car will also remember its outrageous performance for its time. Eduardo competed and won the national Spanish Hill Climb championship for the GT class. “I became modestly famous,” he chuckles. And then came the offers from racing teams.
The most important thing is to surround yourself with the correct people. You must bind your destiny to theirs. It is something you have to share. – Eduardo Davila
This was the moment that proved to be pivotal, a fork in the road. Follow the heart and become a full-time racing driver and perhaps international glory, fame and adulation, or follow the head and return to the family business with all its complications?
Company de-merger
History will never tell us how successful he might have been as a professional racing driver (he still races his Porsche 911 for fun), but he had conceived of a plan to de-merge the company, allowing the two families to fulfil their differing needs and present a blueprint for the future.
On the one side would be shipowning. On the other, ship agency. The former would go to his mother. The latter to his Uncle Ramón. Eduardo would jump over to the agency side and help build a new future for the company with this as the principal vehicle.
Eduardo’s father had placed what can only be described now as a visionary order at the shipyard for a new ship type. Vigo – the ancestral and current home of the Davila family – was becoming a home to carmakers. Citroën and Peugeot had established there, and he had the idea for a specialised ro-ro car carrier to move cars to other European markets.
Within a year GM and Ford set up factories in Spain and Seat expanded its existing operation. The business grew quickly. Already friends of the family, famed Norwegian shipping man Andreas Ugland, came on as a partner to operate the vessels under the name of UECC. The modern ro-ro car carrier was born. It was very successful, “a near monopoly in the shortsea market,” muses Eduardo. When it was sold to NYK in 2000, the income secured Eduardo’s mother and his siblings.
On the agency side, the plan was to build the liner agency business, particularly in the Mediterranean and Eduardo saw this as his task. He recalls: “We didn’t have much agency coverage outside of Vigo at the time and under the terms of the agreement with my Uncle I was not allowed to get involved in any of the Vigo agencies. Offices were opened in Barcelona, Valencia and Algeciras adding to those we had in Bilbao, Cadiz and Seville. These were the days of the mighty liners, and also the days when an agent had a direct and personal relationship with the owner.
“At that time I could travel a lot, 200 days a year. In those days you could have a relationship directly with the owner. Today it is absolutely impossible with the multinational conglomerates. They have no ‘owners’ and agency decisions are taken at a lower level. We built a fantastic team and were so extremely dedicated and we were successful picking up many agencies.”
Existential threat
But nearly as soon as success arrived, a potentially existential threat loomed. In 1993, shortly after the Barcelona Olympic Games and the Seville Expo, Spain was in chronic debt and deep recession. Companies were collapsing.
An important part of the agency group was located in Vigo, which was and still is the most important fish market in Europe, and Davila has long played a significant role in serving that market. At that time, the company was shipping agent as well as Customs broker for the import/export of frozen fish – which as of the times also meant responsibility to the authorities for the VAT and Customs duties. Collapsing businesses left Davila with enormously high bad debts.
“I thought – oh no! We just started and now we are collapsing. We asked the banks for finance but it was not enough. So, I called my mother and said ‘I need your help’.”
As he recounts this moment Eduardo’s voice trails off and there is a pause for reflection. We re-settle and pour some more coffee.
His mother took a stake in the company and provided it with a loan. Uncle Ramón reduced his participation and within two years the loan was repaid. Through management buyout, Eduardo acquired both his mother’s shares and eventually those remaining of Uncle Ramón. He was now, finally, the 100 percent shareholder and president of the company.
Something else was also happening in the early 1990s: traditional liner cargoes were becoming containerised. Breakbulk was being stuffed into containers and frozen fish into reefer containers. Looking for a new business division, Eduardo approached the authorities in Vigo with plans to develop a container port. “It was very easy,” he says. “Any port city wants two things – containers and cars.”
He obtained the backing, developed the land and bought a second-hand container crane from Sealand in Rotterdam which he towed on a barge to Vigo. With a modest 12,000 containers a year to begin with, it has since grown to 200,000 but space has restricted further growth.
Nevertheless, Vigo port is an important storage hub for reefer cargoes and now also for fruit. It is a main port for Del Monte. Containers are brought in, typically from South America, by one of the group’s companies – Altius Forwarding – to be stripped and re-stuffed with products for customers and shipped out. Rail could be the next business development on the agenda with a recently won tender to operate the freight rail system in Vigo. The aim is to improve the links between the city and Madrid.
Central to Davila’s success has been Eduardo’s friend and colleague Jaime Mauriño, ceo of Altius Forwarding, another successful company within the Davila Group with a deep footprint in Central and South America. Jaime is one of the family and a mentor to Pelayo.
I have been privileged to have fantastic teams together with me. If people trust you then you owe them any success. I owe all my success to my teams and my people. – Eduardo Davila
“I met Jaime for the first time in 1993,” Eduardo recalls with a smile. “I needed a good financial person as we were in major distress. A good friend of mine worked at Arthur Andersen and I asked her whether she could recommend anyone for the position? She knew of two people she thought to be too independently spirited to have a long-term future at Andersen.
Key recruitment
“I met Jaime and said ‘you are going to have a very hard life here’. He said ‘ok’. ‘You are going to have to travel a lot’. He said ‘ok’. ‘So how much do you think you will earn?’. ‘This much,’ he said. ‘You won’t even earn that much,’ came my reply. ‘Ok,’ said Jaime. But I knew his hobby was hunting. So, I said ‘if once in a while you don’t appear because you are on a hunt I won’t care too much,’ and his eyes lit up. He has done a tremendous job financially speaking. Very brave and they were very, very hard times.”
Our conversation continued through lunch and later through supper at a favourite restaurant in Madrid. Joined by Eduardo’s wife, Jaime and Pelayo we talked for more than 12 hours traversing the history and philosophy of a remarkable life and career, little of which can be captured in this brief article.
“I have had fantastic teams and fantastic professionals,” he says in response to a question about the meaning of success. “When you are in the business of rendering services, the key thing is your team. I have been privileged to have fantastic teams together with me. If people trust you then you owe them any success. I owe all my success to my teams and my people.”
