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Responses
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 Watch the interview on SynfoTV | A J Anderson Wright Maritime
Our business has grown a little more than 30% in the last 12 months. For
us this has confirmed the concept that a business that holds to
fundamental principles of working for a higher goal than money can
actually make money and increase profitability. On a more tangible
level, eliminating charges for good clients to help them through a rough
patch and to fire well paying but problematic clients can end up as a
net positive to the bottom line. Also, there is some satisfaction in
both of these actions, which makes going to work more enjoyable -
ultimately making us more productive and profitable. |
 | Adam Lay Adam Lay Studio Limited Our business plan has always called for the Studio to remain as
streamlined as possible, and this has proven to be successful in
allowing us to ride out the current period of uncertainty. Our
commitment has always been to work only at the very top end of our
industry with particular attention to personal relationships,
specifically with our clients, maintain core skills close at hand and
bring in other expert specialised skills only when we need them. Most
importantly I do much of the work myself and thus provide strong
leadership and continuity, which places us in an excellent position to
move forward. Providing good intelligent information, ensuring
everything is completed to an exceptionally high standard and going the
extra mile for our clients ensures our reputation for being one of the
best at what we do remains at the forefront of the minds of our friends
and colleagues within the industry. We have completed many proposals
over the past 6 to 9 months and worked hard at building relationships
with everyone involved so that when our clients hit the ‘go' button; we
are ideally placed to hit the ground running.
The industry has
many more designers now than ever before, therefore competition is
fierce on every project and the choice for prospective clients wide
ranging. We continue to build on 15 years experience at the highest end
of yacht design and that experience is vitally important at placing us
near the top of any prospective client's, project manager's, broker's,
shipyard's or captain's shortlist for any new project. We are passionate
about what we do, some might say ‘purist' about the way we go about it.
Yacht design is a lifestyle choice and although a business brain is
important, we never lose sight of the reason we do what we do - because
we absolutely love doing it!
Therefore, we
have learnt that the ethos at the heart of the way we operate works, and
allows us considerable flexibility in all manor of conditions, adverse
or favourable, giving our clients great confidence in our longevity and
likewise the longevity of the Adam Lay Studio brand. We are tremendously
excited about what the future holds. |
 | Albert Levy Ince & Co.
We've learnt that you need to be good to your clients and to the
people who work with you. And because it hasn't been so hectic and
rushed you have time to train your junior members and your intermediate
members in the business.
If one is to be
involved in yachting only buy that which you can afford to maintain. In
the old days people said that the yacht had to be worth not more than
10% of your net asset value and that's about right because the other 90%
produces income and with the market as it stands you don't have a lot
of income from say 90% in cash so never, never acquire something that
you cannot afford on a day to day basis. And since a yacht is a luxury
item it's one of the most important things to remember otherwise you may
become a forced seller and get disenchanted with the whole business and
never come back into it again, which creates bad feelings. |
Alex McBarnet
The superyacht industry has weathered previous downturns in the
global economy in a quite remarkable manner but the current financial
crisis has finally shown that it is not recession proof after all and is
in fact simply another part of the wider global economy. This should
not have been a surprise but the past 12 months have shown how distorted
the superyacht industry was becoming.
The past 12
months have brought issues to a head but really the issues go back much
further. The superyacht industry has been incredibly successful for a
very long time and perhaps inevitably it became a victim of its own
success. Too much of a good thing is not always best. The majority of
owners and people working in the industry are highly professional but
the perception of easy money and low risk encouraged some less
professional behaviour in some people.
With demand
exceeding supply and many yachts appreciating in value too many
transactions were rushed through, sometimes almost in a frenzy. Buyers
who would normally be extremely careful about spending tens of millions
of Euros in business seemed to become caught up in the hype and were
willing to splash out on a yacht with hardly any due care and attention.
And of course there were suppliers (of all goods and services) who
were willing to undercut competitors, cut corners and act very
aggressively in order to ensure that they got the business. A number of
new entrants rushed into the market, many without a sufficient in-depth
understanding of it, and this exacerbated the problems. I must stress
again that the majority of buyers and suppliers did not act like this
but the behaviour of the minority had a knock on effect. It could be
quite difficult to do business calmly and carefully when there was such
frenetic activity all around.
The finance
sector very much followed this pattern. Only ten years ago it was
extremely difficult to finance a superyacht, as banks did not have a
sufficient understanding of the assets or the market. There were a
couple of internal industry lenders and slowly a few banks entered the
market. But with a seemingly ever increasing number of high net worth
clients and with appreciating asset values more and more banks wanted to
get in on the party, and not all of them took sufficient time and care
to really get close to the market.
When the
financial crisis hit it suddenly became clear that things were not quite
as great as many people had believed. Many owners and suppliers
suddenly found themselves over-extended and the safety net of
appreciating values and ever more demand had vanished. In the finance
market the lenders who had made the effort to really understand and get
close to the industry fared much better than those that were simply
chasing “easy money”. That said banks were suffering from all sorts of
woes so even the more successful yacht lending teams found themselves
held back by corporate policies influenced by losses in other areas.
The superyacht
industry has in some ways perhaps been an immature industry and the
lesson it must now take away from the current crisis is that it is time
to grow-up, settle down and become as professional as possible. It may
sound overly simplistic but for me the biggest take-away from the past
12 months is merely that it is time to calm down a little and to do
business more carefully, sensibly and, above all, professionally. |
Andrea Piantini Fincantieri Yachts
Inside “a tempest”, keep the rudder straight, and if the ship you are
steering is well built, you’ll get out of it. During “the tempest”,
use the time and resources available, to reinforce your ship, if you
want to sail in the long term.
In the last 12
months we saw an unprecedented “tempest” in the market, which, though
coming from far away, significantly affected our business, resulting in
the loss of contracts and opportunities for us and many of our
competitors.
During “the
tempest”, we didn’t accept silly deals in terms of prices, delivery
dates and payment terms, trying to desperately sell boats to owners who
were on the market just for a bargain. This avoided weakening the ship
in the long term, generating leaks which would have become visible only
after a couple of years: though second hand prices fell down, building a
new yacht still costs the same as before.
What we did is to
use the time and resources available because of “the tempest”, to
“reinforce our ship”, first maximising our efforts to reach top market
quality in our 134m yacht under construction, which is due for delivery
next year, and secondly by strongly investing in further improving all
our knowledge and know how in all the single details that make an
excellent yacht, from design, engineering and effective project
management to production processes and facility set up.
We now feel
stronger to satisfy a market that is going to hopefully recover. This is
a lesson learnt and applied many times along our 250 years of history
and one that we think the whole industry should apply in these periods. |
Andrew Roch MD Shore Solutions Ltd
During the last 12 months at Shore Solutions, we have learnt that our
business cannot expect clients just to come to us through word of mouth
and for us to remain static in growth.
So in order to
survive we have had to invest in new infrastructure, take high risks
that guarantee no instant returns and develop a sales strategy that is
based upon sheer determination to grow our company.
In terms of
investing in new infrastructure, we had looked at numerous locations in
the Caribbean in which to base our new showroom and offices and after a
year of detailed analysis of competitors, freight pricing, locally
available goods, which yachts would be based where in the region etc…we
finally settled on the yacht club in Falmouth Harbour in Antigua. This
long-term investment has been made in order to benefit our clients who
have expressed the desire to see members of our team on the docks and
available to discuss orders and opportunities.
Risk taking at
Shore Solutions has never been part of our business strategy as we are a
debt free company wholly owned by the staff, so when we made the
decision to open a 10,000 square foot depot and offices in the centrally
located commercial market in Nice it was a very high risk, but one that
over the last twelve months has paid off in full and as a result of
being based in the largest market in the south of France it has enabled
us to offer our clients an even better range of fresh produce. As a
direct result our 2009 summer season sales were up by 49% compared to
2008.
Just expecting
business to come our way has never been part of our sales strategy, but
we had never been aggressive in going out into the market and using the
shot gun approach. So this summer season we decided to try that approach
and set up a dedicated team of 3 external sales people, all experts
within different fields (a wine specialist, a food specialist and an
interior goods specialist) and their sole task was to walk and visit
each and every yacht in the market over 50 metres in length.
These three
strategies have all worked in bringing on an additional three dozen new
clients during the last 6 months and our profile within the market has
been growing on a daily basis.
The lessons that
our industry will learn have already been learnt in my opinion. Those
companies and individuals that were going to survive “have” and those
that were not have already “fallen by the wayside”.
Our market has
become more cost conscious, more aggressive in marketing and more
determined to provide our clients with an even greater level of product
and service. |
 | Andrew Wagner Al Masaood Marine Speaking at the Gulf Superyacht Forum 2010 "As far as the business model here, it’s not much different to anywhere else in the world. You’ve got to find your target consumers. You’ve got to reach them. You need to be in the right location. You've got to do your supply chain management so that your cost is lean and you’ve got to deliver the service that you promised. It’s very quickly. The market is small and it talks very quickly about what’s not delivered. And it goes from here to Kuwait within a day. Everybody knows what’s happening so you’ve got to deliver on your service. Don’t promise more than you can deliver." |
Barb Tierney Northrop & Johnson
I think more than anything over the past 12 months we’ve learned that
conventional marketing has to be modified and we have to do more
networking and thinking out of the box by using social marketing,
planning, events and reaching clients in some non-conventional manners. |
 Watch the interview on SynfoTV | Bertrand Vogele YPI YPI joined BRS in July 2008 and we became involved in the running of
the company in September that year - just prior to the economic downturn
(very bad timing) - so the past 12 months have proved difficult for us.
As you may imagine, our business plans went completely ‘out of the
window’ so the last 12 months were spent directing the transition to our
new strategies and organisation, while at the same time trying to stay
ahead of the market and do business during the year, has been
complicated. Trying to do both at the same time was not exactly easy.
We have retained
six lessons:
- When
starting a business in such a bad period you should start out with good
habits as you don’t generally have a lot of money and there is a lot to
do with what money you have. We were not, therefore, so hampered by the
concept of large expenses. YPI was not fat, rather I would say we were
quite lean and fit, so trying to adapt the company during this period
was not too difficult for us.
- We had to return
to basics and prove to our clients and potential clients that we are
really able to provide added value. That’s very important and is
something, which probably disappeared when the market was ‘easy’ and
expanding.
- We have now seen
how much the market is linked to the global economy whereas,
previously, many thought our clients would be unaffected by such crises.
I believe this difficult period has highlighted the need for change
within our industry. We must change structure and try to adapt the
industry in reaction to occurrences such as increased internet exposure,
the economic crisis and, probably, the way owners react - all of which
are now very different to previously.
- I have realised
the importance of being close to the shipyards. I believe we must, as
brokers, be very close to them and to work technically on all the
projects. We need to be more specialised. This ties in with point 2
above whereby clients require true expertise from us, which clearly, has
to be learned from the shipyards.
- In this market
we have to move forward and find the clients. Now is not the time to
wait for the telephone to ring. It is the time to travel and to find
new clients. They are not in America and Europe so they could be in the
Middle and Far East. We have to think about new potential clients,
which is why we have to make some considerable effort to find them as
well as adapt our way of doing business with them.
We must remain
positive and optimistic as, historically; all big successes have been
built in the difficult periods of global economic downturn. That’s why
new opportunities, fresh air and new clients, etc., could be the key to
success as well as a good opportunity for us to increase our market
share.
No matter what
some people in the Superyacht industry might wish us to believe we have
all, to some extent, been hit by the continuing economic crisis. |
Brian Chivers Seenite
A lesson for me has been not to underestimate the support that the
European Superyacht Industry can and does offer. It is a very close
community eager to offer help and support amongst its participants. When
push comes to shove you are more likely to get a hand up the ladder
than a push down. In the last year suppliers have been terrific
providing more credit than they can afford, Shipyards have acted with
integrity against intolerable pressures, the service and installation
contractors have continued to go that extra mile, designers and
engineers have continued to share their thoughts, ideas and knowledge
and yes even the Brokers and financiers and owners reps have
significantly changed there approach to problems we all face. Of course
there are exceptions, I believe they are few and far between. How do we
need to change our industry? We should continue to build on the positive
aspects of an industry built over the last 15 years, I believe that we
need a European inclusive Society for communication, standards, support
and that it should bring together under one forum viewpoints from all
parts of the industry. The biggest lesson for everyone perhaps is to be
proud of the industry and appreciate those around us, working together. |
Burkhard List List
The motor of Yachting is pure passion for extravagance paired with
absolute perfection in every detail. The business (and the industry) has
developed out of highly passionate individuals and institutions. These
are lead by such individuals that understand how to connect passion with
a professional approach.
I am absolutely
convinced that this is the huge secret of our business and makes it so
incomparable to other industries and enjoyable to work in. Due to this, a
change and homogenisation of our industry would be the wrong approach
and would limit the freedom of everyone this business serves.
We shouldn’t look
for a change in the industry or business but seek the development of
everyone’s individual competences, where highly passionate processes
meet a professional outcome.
In general this
means – take opportunities when they appear; make decisions when needed;
make no false compromises; and never be tired to aim for perfection. |
 | Capt. Saleem Alavi National Ship Registry, UAE Speaking at the Gulf Superyacht Forum 2010 "We at NTA, maintain to work with the industry in all aspects of maritime economy of UAE, to bring them the regulations bottoms up rather than top down with the involvement of the industry players, with their feedback, we’ll listen to everybody’s opinion and then, we’ll regulate the industry accordingly. You will see some new regulations coming in, in a very fast pace the next couple of months but they will be more directed towards their putting standards to finding the standards rather than restricting the industry to development."
|
Captain Andreas Arvidsson Transas Marine International The superyacht market is increasing year by year. Even with the
current economic crisis, customers worldwide are purchasing superyachts
proving that this market is expanding. Consider today’s super yachts:
angular profiles are out of date and shipyards are now full of
streamlined designs. Unfortunately, the functional aspects are not
always sufficiently highlighted and may not assist the crew or
maintenance teams throughout the yacht’s life cycle.
In an ideal
world, all participants would work together: the architects, designers,
manufacturers, equipment providers, and clients. From the very
beginning, everybody could share ideas, expectations, and limitations,
to achieve a complete vision of the result and its evolution. We at
Transas embrace this approach.
Superyachts are
today synonymous with sophisticated technology, including communication
and data, integrated bridge and navigation systems, security systems and
even entertainment solutions.
Focusing on
customer needs, and ensuring that they have a complete understanding of
the existing technologies and solutions available in the market, will
increase the overall efficiency of superyachts and the level of safety
onboard and at sea.
With more and
more people navigating, reinforcing regulations is essential.
Superyachts will have to be fitted with type-approved equipment in order
to improve safety at sea and awareness of nearby vessels. And today it
is possible without compromising between modern designs, advanced
technology and type-approved systems. |
 | Captain Brendan O'Shannassy Project 55
As a large Yacht Captain the past 12-months have provided an
awareness that expectations of value have increased. The level of
financial scrutiny has increased and Captains are now under pressure
from owners to demonstrate improved efficiency and value with every
transaction and decision. This realisation is causing Yachts to look
inward at their business process and constantly identify avenues for
improvement.
This value
seeking filters straight out to the industry, as businesses supporting
yachts (to remain competitive) also need to look inward and investigate
their business models. What may have represented accepted practice
12-months ago will no longer be seen as commercially viable in the ‘new
normal’. Yachts are now looking beyond traditional yacht support
companies to provide their support; where 12-months ago yachting
businesses may have only been competing within the industry they are now
competing globally as yachts seek operating efficiency at any turn.
In this new
environment there will be some visible changes: Uniforms may come
direct from manufacturers in Asia, book-keeping may be online in India,
management services may be accomplished by commercial providers
operating at higher volume and greater efficiency, stores may come via
professional procurement agencies normally servicing mining and
commercial marine, and the list extends.
In speaking with
companies on behalf of the owner I am looking for those that understand
this new paradigm and are willing to adapt in response. In many ways the
shift to higher efficiency and value can only be of benefit to the
industry. |
 | Captain Julien Jouault
New build projects are a rarity these days; the slump in the industry is
directly linked to the fortunes of our clients. For me every day is a
development and a learning process - it is amazing the amount of data
there is to absorb. |
 | Captain Olivier Kerkhofs
What I have learnt in the past 12 months is that the superyacht
industry is more than ever a changing, unstable workplace both for shore
based businesses as well as seagoing personnel.
Unlike what has
been proclaimed by some, the industry is far from immune to the world
economical climate, and to run a profitable business within it or be
long term employed are the exceptions rather than the norm.
We need to work
and behave more professionally, build up a smaller but sharper yachting
community rather than trying to attract newbie’s luring them with easy
money and wonderful travelling. Most of the teenagers who have blindly
been sucked into our unstable world by our promises are currently
desperately lining up in front of the crew agencies. On the shore side
many small businesses are struggling to pass through the crisis hoping
for a better time.
This might lead
to real drama for the weaker individuals and companies.
Here comes a
point which stands out: our industry, unlike the commercial side of it,
is the very last one worldwide requesting to give up everything in life
but the boat and his/her owner's aspirations. When I'm passing the gate
at my home country international airport, I'm unable to tell the loved
ones when I will be back next for a hug. It might be thrilling when you
are young and aspire to climb up the steps of your chosen profession
while seeing the world over, but it is becoming increasingly painful as
the years goes by. Needless to say the experienced mariners managing big
yachts can only be of a certain age, and they are among the ones
necessary to sustain and improve the industry. I have witnessed
a near-total collapse of the crew on my last assignment, and I mean
young crew comfortably paid, following the sale of the yacht and its new
remote location with very few possibilities for time off with
family and education. Why is it so painful to understand that reasonable
rotation for all shall be the norm and not the exception? It is fair to
say that crewmembers should review their financial conditions as well
in order to assist the owner in implementing such a rotational system.
Nevertheless this
is a wonderful industry to work in, and assuming we all fight back in
the right direction it will offer many happy years to the willing
individuals. |
 | Captain Paul Brackley Central Yacht The last year has been no more than an overdue correction in the
market where prices, commissions and expectations have risen beyond the
realms of the credible or possible.
The fundamental
core of the industry remains healthy, that is the part driven by those
who are in the “business” for pleasure, be they owner, broker or crew.
Those who have
endured more than 20 years in the industry understand that consistency
and client centred service remain the basis of sound ongoing business.
This lesson was
not learned in the last year, merely confirmed.
But how can this
situation be averted in the future? As MHR so often points out
transparency is the enemy of the unscrupulous, ignorant and dishonest.
I fear that the
honest might be massively outnumbered. Time to stand up and be counted? |
 | Carlos Vidueira Rybovich Superyacht Marina & Refit Speaking at the American Superyacht Forum 2010 "All of a sudden people don’t want to spend the money, they don’t want to spend the money at our site on the refit, they don’t want to build the new boat, they really don’t want to do anything and we are seeing that even with our ownership, looking at selling things that they don’t really need, don’t really want where in the past we would just keep them around just because we always have and why not keep doing that." |
 | Charlie Birkett YCO
The yachting industry has developed over the past year, not only in
response to economical turbulence but also to the natural progression
and change of what was, only recently, very much a fledgling industry.
Today’s buyers, owners and charterers are more informed, more aware of
their options and more demanding.
Correspondingly,
within the yachting world itself, brokers, managers and other service
providers have been obliged to adapt the way in which they work. As the
industry evolves, companies must step up their game to keep up with
progress, approaching the market in a more businesslike manner,
responding to clients’ demands and expectations and providing a
transparent, professional service - where the emphasis really is on the
word “service”.
YCO has always
focused on service but over the past 12 months the company has
re-evaluated each one of the services we provide, making improvements
and restructuring where necessary to ensure we offer our clients what
they need and want. Clients today are more discerning and performance in
every sector of the market has confirmed this with prices dropping and
becoming more competitive now than ever before. Brokers must also work
harder for their commissions, building relationships and supporting
clients throughout the process and beyond, rather than signing a deal
and walking away. As a management company, flexibility has been crucial,
which is why we allow owners to subscribe only to the services they
require with the relevant pricing, rather than forcing an unwanted,
“bundled program”.
In essence, as
the yachting industry develops we must all become more responsible, more
professional and more accountable. At YCO this is how we are addressing
the future and we will continue to adapt and evolve our services,
keeping pace as the yachting industry grows up. |
 | Charlie Dana Newport Shipyard Speaking at the American Superyacht Forum 2010 "So when we got nervous, we battened down the hatches. So then what we found was, even when we weren’t really growing the business, we were getting better dollars and the bottom line was improving so we took a sort of a flat cut of a business and we’re still in that."
|
Colin Puckett Northern Lights
I think the biggest lesson that we learnt over the last 12 months is
that the glory days we saw in 2006 and 2007 are not going to be coming
back any time soon. All of the marine industry needs to really
understand that all of the money that has been spent in the past is not
going to be spent in the same way in the future. What we really need to
do is make sure that we are listening to our customers and not spending
all of our money on the extravagancies, as opposed to developing the
products that make sense in terms of efficiency and true innovation. We
need to make sure that engines are more efficient, our generators are
using sensible amounts of fuel and that all the systems that we are
building into these yachts are working together to prove to our
customers that to be in yachting you can still do it in a reasonable way
that’s not as irresponsible as it has been in the past. It can still
be a real, major, important part of your lifestyle without spending all
your retirement funds on the things that don’t make sense. At Northern
Lights we are trying to make sure that our customers understand that by
operating your machines efficiently and really optimising the usage of
all your systems on board that you are able to still live the lifestyle
you are looking to live in a way that makes sense for you and the
generations to come. |
 | Cyril Le Sourd and Thierry Regnault CMN
In the last 12 months the world has seen an economic crisis and some of
our prospective clients have been affected as they have not been able to
finance a yacht project. Other clients have not been affected but they
have had to concentrate their time on their business so buying a yacht
or developing a new project was not a priority. So we had to face a
lull in demand for projects. However CMN does not just work in the
yachting industry, we work in other fields too such as work on naval
ships so this compensates for the reduction in the yachting market that
we see right now. But we are also currently preparing for the future.
Working on the naval side of the business is also very helpful in
keeping our task force at the same level and developing new technologies
from which we can learn new ideas for the yachting industry as well.
The good thing about being able to maintain the team at CMN is that we
are able to do a lot of research and development for what we think the
yacht of the future should be because we believe if we bring new and
fresh ideas new clients will receive them positively and this will
differentiate new build and demonstrate the appeal of a new yacht above a
second hand one. So in a way the crisis hasn’t been a good thing but
the market was previously very crazy so the crisis has left us time to
think about the future and this topsy-turvy situation allows us to sit
down a bit and assess what we should do for our clients and the crew and
what should be the path to follow to develop new interesting products
and to find other areas of the globe to develop our business, which we
are heavily investigating in like everybody else I imagine. |
 | Dan Mickelsen Intelisea The lessons we’ve learned in the past 12 months are not just general to
the industry, but rather deal with specifics for the stage of our
company – those things you learn when you are about four and a half,
nearly five years old. We spent our first two years as a research and
development firm and a very intensely creative, high effort went into
making the product, researching the market place and coming out with
what we believe is the best monitoring system we could build. As the
last two years have gone on, and especially with the market and economic
demands of the last year, our change as a company has been focused on
moving from that R & D environment to a project-based, highly
efficient firm where we can support our growing list of clients. So
with the market space constricting and with the difficulties of the last
year we haven’t actually lost any of our clients. Things may have
slowed down a little bit but we’ve learned the lesson that we’ve got to
serve the existing clients that we have more efficiently so we can
continue to add new clients without overburdening our cost structure.
To do that we have to focus a lot on the efficiency of our hardware
model, the efficiency of our software installations. Frankly it’s made
it a better product because in the last year we haven’t stopped being R
& D driven, we’ve been designing for market space changes, we’ve
improved the efficiency of the product, we’ve improved the efficiency of
the way it’s configured and the way it’s installed so that we can serve
more clients with the same or only moderately increased labour force.
Hopefully this positions us to gain market share. Yes it’s a smaller
market, but if I look at where we were 2 years ago, out of a possible
global market of, say, 800 units, we had a market of zero because we
didn’t have a product out there. A year into our product being “live”,
we delivered over 20 units. Now, with a reduced market of 400 units, we
haven’t actually lost business that we owned, our competitors did. So
as a company we’ve taken the opportunity over the last year to improve
our product and position ourselves in a way that will allow us to
continue to take market share. We can still be completely successful in
that environment. Businesses have recognised that products with good
return on investment strategies are valid things to consider, and those
considerations can initiate change in a somewhat change-resistant
environment. Builders have been forced because of the tighter market to
consider those business partners that offer good ROI - and that allows
us easier introduction into places that would have otherwise been
resistant if things just carried along as they were and people were
making money without having to think too much about it. Out of this,
InteliSea believes that growth and innovation will emerge, and those
companies who embrace it will be stronger for it. |
David Hicks C-QUIP International
Well I guess what's become very evident, particularly given the quality
of the enquiries this week at this show [METS 2009] is that persisting
with your marketing and being consistent with quality and with
innovation means you are well positioned when the owners and captains
come round again and are building their second or third boat. This time
round they want items on their boat that they recognise as top quality,
and where we might have had to pass on some projects in the past due to
pricing, ultimately people recognise quality and with experience owners
will pay for value and for quality. |
 | Dean DuToit National Marine
It has been a very interesting year to say the least. What we’ve learned
in the last 12 months is how quickly times can change and how
drastically they can affect our industry which I think is a surprise to
everybody. We have all realised that the Yachting industry is not an
untouchable industry and is not impervious to change, witnessing first
hand the direct affect of the downturn in the economy. At National
Marine every department and each employee is committed to making a
positive change and adapt to the curveballs being thrown our way by this
recession. We have refocused, retrained and retooled to be more
efficient and responsive while maintaining the highest standard of
service for our customers.
I think this whole experience has taught our staff and crew to be more
appreciative and respectful of their positions and show more
responsibility with vessel funds. Repair the pump, don’t replace it; has
become the norm. We can take away from this drastic change the
positives we have learned and be thankful for what we have. |
Dennis Mol Imtech Marine & Offshore
After 20 years experience, we know that our state-of-the art delivered
technology systems which add to the yacht operation and cruising
experience, is a result of a team process. In other words: technology,
team management and tuned processes should get equal attention to get
top quality. |
 | Dickie Bannenberg Bannenberg & Rowell Design Ltd I remember the Monaco show of 2008 feeling like the last days of a
rather decadent and inward-looking civilization (and this is without the
benefit of calm hindsight). There were rather hastily convened meetings
in hotel lobbies with possible clients you got to meet for five
minutes, presided over by a broker who’d met them for perhaps double
that. People scurried by along the quays, too busy to stop, let alone
talk. Wheels up from Nice airport on the way back to London signified
the high-water mark of the industry, as we were accustomed to knowing
it. Almost to the minute, things started to unravel on touching down in
London.
I’m no economist
so won’t try to pontificate on the mechanics of a yachting bubble
compared to property, dot com shares or the South Sea Company. It does
strike me, though, that yachting has a few unique drivers like
impatience, a good dose of bluster (to put it kindly) and general
tendencies of one-upmanship.
You can’t do much
about impatience with an owner but I think the future will see rather
more durable investment into Clients, and what they need, by designers,
shipyards and brokers alike. To paraphrase JFK, it’s more about what can
I do for my client, not what can my client do for me. I’ve learnt that
keeping that right at the front of your mind should get you out stronger
the other side |
 | Eric J. Goldring Goldring & Goldring, P.A.
As I noted at the 2007 Global Superyacht Forum, to the consternation
of some, it was clear to me that the boom in the superyacht industry was
going to be ending. There was an undeniable softening in the resale
boat and yacht markets, unfortunately with clients of mine in that
market starting to show signs of stress. We, as an industry, at the
very same time, continued to brag about overly full order books and the
ability of those at the front of the line to order two yachts; flipping
the first to assist in funding the second…with a neat additional profit
of 25% or more on the resale of the owner’s then present yacht. This
resulted in some of the newest yachts being purchased with only 50% or
less of its cost actually coming out of the owner’s pocket and,
therefore, expanded the hyper-inflation of superyacht pricing. The
tables were set for the downturn.
Meanwhile quite a
number of shipyards were started to fill the pent up demand – eyeing
seemingly significant profit margins on future sales – by bidding
projects at prices that were narrowly sustainable (or unsustainable) for
a start-up (or, possibly, even a well established yard) with the
emphasis on high-tech/high capital investment solutions aimed at
increasing efficiencies; though many of those schemes were more
theoretical than proven. (Let us not forget that the problem with gross
inefficiencies in construction techniques and management of labour has
been a long time issue in our industry.)
Added to that has
been a governmental approach of regulating as much as could be
regulated, but in many instances without regard to an actual return on
investment (be it reduced injuries or losses of vessels). This
inflationary scheme not only raises pricing (not profit margins) in the
near-term, but integrates an inflationary factor which any new builds
will have to absorb (for example, the increased requirements for crew
accommodations results in a lower percentage of new build cost being
associated with benefits to an owner). The obvious negative effect of
increasing costs for “less boat” for the owner by these regulations has
also been a heated topic of discussion.
With the American
economy most definitely softening, and the World economy so
interdependent on same, the shipyards have, in many instances, found
themselves in a very precarious situation and so have the owners.
Shipyards are
finding contracts cancelled or delayed, but either unable to recover
damages from the purchaser/owner or unwilling to destroy the shipyard’s
good will and reputation – with an eye on business when the recovery
happens…if they survive. This has caused a shifting by many into refit
work which is, in real terms, a different industry (or, at least,
sub-industry) with tradesmen who were trained and focused on thinking
“new construction” now being called upon to think “find a solution or
workaround” that is cost-efficient and effective. This, in turn, has
put pressure on true refit yards, which have been suffering with reduced
workloads either in scope or quality, by pulling some of the better
projects from them…and stressing them financially. And in the refit
business, the business is generally short-term, so there is no cushion
of years of contracted for work. Hence the economy is an even more
immediate stressor on their business.
With that
backdrop, the last twenty-four months (not just the past twelve) has
clearly resulted in a reduction in legal work because the focus has
become less on “being right” or disputes being over the quality of the
work performed. Rather the issues have become more focused on whether a
yard will even be able to respond to a lawsuit or an owner’s financial
ability to bring one. And let us not forget that negotiations cost far
less than litigations and, therefore, significantly affect a law firm’s
cash flow. Further many owners now desire to keep costs low by
starting, and then slowing down or reducing the scope of a refit project
so that dockage and running costs are kept to a minimum while in the
yard, which is either just happy to have the work or is unwilling to
push the owner for fear of creating one of the foregoing scenarios. Of
course, other owners are reducing or eliminating refit work, choosing to
anchor out rather than even stay at a dock…with a reduced crew,
rendering the opportunity for disputes to be substantially reduced. In
other words, (AND IN TURN) the superyacht legal business has slowed as
significantly if not more than, other aspects of the superyacht
industry. Layoffs/redundancies are now ubiquitous in the legal industry.
Thus the lesson,
hopefully learned not in the past twelve months, but the past years, is
that specialisation is one thing, but diversification is required for
long-term survival. In the instance of Goldring & Goldring, P.A. we
have made sure that there are multiple levels of diversity, but always
tempering same by keeping in mind that attempting to “do it all” usually
results in nothing being done to the best way. I have, for decades,
stated that those who own yachts own real estate and businesses. By
becoming sufficiently diverse to handle other matters for the same
client (not so dissimilar to new build yards taking on refit work) there
is a steady stream of business.
A second thing
learned, though again not in the past twelve months, is that there are
many aspects of the superyacht industry that readily relates to
land-based construction (which usually presents itself as a far less
complicated scenario). “Thinking outside the box” I have developed a
second business – focused on those who might well be part of the
superyacht industry (as owners or charterers): the luxury travel
business. I have established Goldring Travel, which has enjoyed (again) a
more than doubling of revenues over the past twelve months and
established itself as one of the top sellers, worldwide, of The Yachts
of Seabourn – the most luxurious cruise line in the world. Through the
application of the same skill set involved when negotiating charters of
superyachts and the attendant operational problems to the luxury cruise
business, a robust complimentary business has evolved. In fact, one law
client involved in a charter dispute was unavailable to consult with
for over a month because he was on a luxury cruise. Some yards have, in
this respect, taken on work building, for example, windmills.
Applying all of
this to the superyacht industry is actually a simple task: We must not
allow the urge of some to “jump on the gravy train” to lower the quality
of our products. We must not have short-term goals at the expense of
realistic long term planning. And when establishing or operating a
business, the focus on new technologies must be tempered by the need to
obtain a near-term return on investment; not based upon the
hyper-inflated prices or the theoretical third yacht, but on a
realistic, conservative, and economically viable plan. Failure to do so
will continue what has been the weak spot in our industry for decades:
The failure of start-up after start-up.
Further,
diversification rather than specialization needs to be the norm.
(Seriously, for example, how many LED manufacturers/suppliers are
really needed and can be supported by our small industry?) It is easy to
specialize when there is a constant demand, but when there is no ready
ability to alter one’s operations, the cost to continue business can and
does readily outstrip the desire to hastily diversify one’s offerings.
I believe our industry will come out of this recession stronger than
before and, hopefully, in part by shedding some of the “old school”
practices by learning from the mistakes made. |
 | Ermanno Porro Sanlorenzo Spa Speaking at the Italian Superyacht Forum 2010 "Production represents one of the most complicated industry processes. Complicated and complex because behind being similar to the construction of a great infrastructure or of a very complex textile machine, they add to this complication the fact that they need a very high level of refinery in terms of exterior and interior design of the yacht and in terms of material used.’" |
 | Espen Oeino Espen Oeino International One should take nothing for granted. |
 | Giancarlo Ragnetti Perini Navi Group We have learned that available credit is vital to the global economy.
Available financing is what drives the order books of the yacht
building industry.
Perini Navi have
been able to protect ourselves thanks to past investments. We have been
more focused on diligent business management and applied cost
optimisation policies to all the companies of the Perini Navi Group,
without requiring any job displacement. As a result we have been able to
sign 3 new orders since last year.
I believe that we
will have to get through 2010 before the market is able to recover,
forgetting the values reached over the past years. The industry’s
overall recovery will depend on each country’s market strategies and on
the trend of the inflation rate. Our main vision will still be focused
on the innovation, and on renewal of our products and supplying
exceptional quality without raising prices. |
Goran Prgin NCP
The financial crisis and its direct impact on the rapid decline in
buying and selling in the first place hit shipyards engaged exclusively
in new builds, but I can confirm that the fall occurred in the refit
sector as well. The major decline to NCP Repair Shipyard arrived from a
collaboration with the Ministry of Defence on a military program but
yacht owners also invested less in their yachts in comparison to last
year. Although the number of yacht projects was slightly higher than
last year, the final profit is reduced.
At first signs of
financial crisis we promptly revised our existing operating costs and
we accelerated the planned process of new systematisation of our
employees, analysing in detail each position. This analysis brought us
to lower costs and higher productivity of the employees, and with
consequence the higher productivity of the entire NCP Repair Shipyard’s
production plant. We diverted saved funds to marketing and customer's
care.
Good lessons
learnt from this situation is the fact that we shouldn’t take economic
growth and the continued growth of the yacht sector for granted. This
year we have learned how to act with major rationalisation and how to
get higher productivity in relation to investments. That is the way we
should continue after the crisis as well. |
 | Hank Halstead Northrop and Johnson Newport Speaking at the American Superyacht Forum 2010 "No one who doesn’t know where their bread’s going to be buttered next week or where their shares are going to be valued next week is going to come and dump a load of cash on you and say “I’m buying a yacht”."
|
 | Hein Velema Fraser Yachts
What have I learnt in the last 12 months? Several things. First of
all, that business is not as predictable as we’d like and we therefore
have to be much more flexible. From a management perspective I learnt
that you should not think “linear” any more and should look into the
future much more from a scenario based point of view. You have to build
in flexibility because every one has a different picture of the future
and things won’t necessarily progress the way you envisaged. Over and
over again we all get surprised by things developing differently. So
that is my first lesson learnt.
The second lesson
I learnt is that the clients are becoming more rational – I’m not
saying they become completely rational, but maybe less irrational! That
creates huge opportunities for professional people. First of course you
have to do everything possible to improve the quality of your service.
You really have to listen to your client and understand what he wants;
you have to interpret and sometimes adapt it. It is all about added
value. You have to explain to clients much more than in the past what
you are doing and why you are doing it and how you are doing it. I think
that’s a huge advantage because it gives a chance for the real
professionals in this industry to excel.
How do we need to
change our industry? It’s not something that we actively do I think
its’ what happens as every individual company and individual
professional makes their own choices. You can see that things are
changing. You need to work much more on long term relationships with
clients. Yacht owners are crucial in our industry. We’re currently much
more focused on bringing new people into the industry. I don’t see that
happening so much in the near future so we really have to take care of
the current yacht owners. It goes so much further than giving them one
charter or selling them a new yacht. We really need to take care of our
clients in all aspects from management, from a financial point of view,
to a service point of view; to delivering the right crew etc. That will
keep the yacht owners in the market and help them enjoy their yacht on a
more rational basis. How will it affect our industry? I strongly
believe that we have to work together more to ensure a professional and
transparent structure. It happened in the brokerage market many years
ago. We see it now in the builders market where they recently started
to work closer together. I see other parts of our industry where people
are trying to work together to face the problems they see and the
result will be that it will be more transparent, and the more
transparent a market is the easier it will be for clients to recognise
top quality and real service. The transparency is crucial and I think it
can be achieved by associations, for example, but can also be achieved
by magazines that play a role in shaping people’s perception of the
luxury yachting industry. I think the industry will change dramatically
in 2 or 3 years time. We can see already that things are going to be
completely different. |
 | Henk de Vries Feadship In September 2008, all at Monaco pretended all was fine, and this was
just another hiccup. A month later in Ft Lauderdale, the atmosphere was a
lot gloomier, and work on most potential new orders stopped,
fortunately we were able to contract some new work. Since then, it has
been difficult, but more so for the newcomers and companies without
experience. For the established names, such as Feadship, there is still
new business to be found: in an uncertain environment, buyers are
considering the "safe" options. And just now, in Monaco 2009, all is
fine again, the atmosphere is upbeat and we all clap each other on the
back. Still, with speculative builds and abandoned projects coming on
the market, also in the coming year, there is going to be over-supply.
This means that demand for new projects and standard boats coming off
the production line is going to be modest. I expect the market to return
to its real (pre-2003) level, catering to individuals who love
yachting. This means that the 2008 number of builders is twice what the
market will be able to support, and that the relative market share of
the solid companies is going to increase as newcomers are going out of
business. Sad? I do not think so. This cleansing is a good thing, both
for the industry and the clients that buy our product. Back to normal?
Not until the end of 2010, maybe even 2011. We are prepared. |
 | Holger Kahl & Susanne Wiegand Nobiskrug The worldwide financial crisis caused many cancellations of orders
within the industry and goes along with a significantly declining number
of new projects and orders.
Many shipyards
are under tremendous pressure to cope with the challenges caused by the
crisis and are forced to review their business model. The shipbuilding
industry is facing a consolidation process, which only the strongest
will survive.
It is of utmost
importance to be competitive in the sense of financial stability,
quality and cost structures. Processes need to be further optimised in
order to improve professionalism in project management and efficiency.
The sales
processes of today are much more time-consuming and therewith costly,
which makes the identification of serious real clients already in an
early stage of the project an even more crucial factor.
However, there is
also good news: solvent clients are still around and some serious
projects are currently under way.
Our owners and
therewith our company benefit from our specialisation and dedication to
megayacht construction and our track record in the marketplace. The
pedigree is the key to success. |
 | Jacqueline Lyne Edmiston Yacht Management
Over the past twelve months we’ve learnt that we really need to focus on
our core business and that we have to constantly strive to improve the
standard of service that we offer our clients. This is a buyer’s market
and those that deliver consistently excellent service will triumph. We
need to invest in our people and in the knowledge and the skills that we
have within our company. We need to constantly evaluate the service we
are delivering and strive to improve the product that we are offering.
I believe that we have to be transparent in our dealings with our
clients and have to operate in an ethical manner with integrity and
honesty. I think that any advantage that is gained through unethical
dealings will be very short lived indeed. By focusing on our clients’
needs, their expectations and the quality and standard of the services
that we offer them we will triumph. That’s it in a nut shell; focus on
your core business, invest in your people and training, focus on your
client’s expectations and operate with integrity, clarity, honesty and
transparency and you will be best placed to deal with the upturn when it
happens – as it inevitably will. |
 | James Lawson Hill Dickinson LLP
The past twelve months has taught us the following.
The superyacht industry is not recession-proof. Prices being achieved
for both new builds and existing yachts were seriously over-inflated, a
result of too much of the market being credit driven.
The market had accordingly attracted a significant
number of speculators - be they yards, buyers, intermediary "virtual"
arrangements and other disciplines.
Symptomatic of
the market were a number of concepts, projects and arrangements that
simply did not stack up. These ranged from intermediate contracting
entities to yards that were obviously inadequately experienced or
equipped to build to the quality expected by the market, to multiple
orders and in many cases, to deals that looked too good to be true.
What we have
learnt is that those in all disciplines providing a quality, bespoke and
dedicated service have been best placed to survive the recession
unscathed. Consequently, we have a leaner, fitter and more pure
market. The sometimes hysterical enthusiasm to enter into a build
contract or buy a yacht regardless of the price simply because of the
available delivery date or the yacht's particular length has
disappeared. The majority of buyers are choosing a yacht for their own
enjoyment rather than an investment and as such are taking the time and
trouble to identify the right one.
There is now
significant pressure on pricing on new builds and existing yachts. The
market will no longer bear the substantial "superyacht market standard"
mark-ups. The brokers are driving the recovery of the market and finding
interest and we are seeing buyers committing to transactions. The net
prices achieved, however, are often significantly lower than those being
asked.
The industry
needs to recognise that finance by and large is no longer available for
builders, suppliers or buyers, to price projects accordingly and to
accept that this is a buyer's market. Prices achieved during 2007/2008
should be viewed as an anomaly and not used as a comparable going
forward.
Those involved in
the market should look very carefully at suppliers of goods and
services and should only engage with those with a significant track
history and in-depth involvement in the industry. The proof is in those
yards, banks and professional service suppliers (for example, lawyers
and insurance brokers), which are inundated with instructions at the
moment. They are busy because the market has recognised their
specialist skills and that they have always provided a bespoke service
at a reasonable price. Those who know the market will be able to
identify service providers who can offer these essential attributes. By
engaging a professional team from the outset, the transaction is more
likely to proceed to completion and confidence will be restored to the
industry.
Certain sectors
are still over-represented - a large number of fiscal advisers and
corporate service providers and (dare I say it) law firms have jumped on
to the superyacht bandwagon in the last couple of years. Other sectors
have suffered more quickly than others and are therefore currently
under-represented. The obvious example is superyacht finance where
there is a ready-made market for any bank prepared to lend. As banks
have found to their cost (even when times were good), it is imperative
that a lender has a deep-rooted knowledge of the industry and its
particular nuances.
Overall, the
industry will survive and will be all the stronger for it but for the
foreseeable time at least; it will be a buyer-driven market. Those
fuelling the industry's growth - the end buyer - will have a choice of
service provider at each stage and the lesson for us all is to recognise
this and provide the high-level of service at a reasonable price to
ensure repeat instructions. Quality and value are paramount. |
 | Jim Ruffolo Burger Boat Company We’ve learned that the social pressures surrounding luxury purchases
during this economic downturn have more than ever before caused
prospective clients at least a temporarily reluctance to purchase new
custom yachts. Also, due to the large number of available yachts on the
secondary market, clients who would have otherwise focused exclusively
on the purchase of a new custom yacht are now at least considering
purchasing a previously owned yacht.
We must continue
innovation and find new ways to add value in our yacht designs. We must
all do a better job marketing to a larger audience and exposing many new
prospective clients to the benefits and pleasures of yacht ownership.
There are many more high-net-worth individuals who can afford our
products but may not have been made aware of the yachting experience. |
John Cary
What have I learned in the last twelve months related to our industry
and the difficulties we’ve had? Stay true to what has made you
successful. Don’t panic. Be open to change. Think about what you do
well and what you really do need to change. I have great confidence in
the future. |
 | John Leonida Clyde & Co I think from the legal side what we've primarily learnt is that the
unexpected has become normal, that some people who developed
relationships built on trust have exploited that trust and to a lesser
or greater degree where people are suffering economically they have
behaved badly and what that has taught us going forward is that until
the trust can be rebuilt we have to, from a legal standpoint, protect
the owners and protect the yards from each others bad practices. For
example there are the owners who hide behind special purpose vehicles,
who have dodged their responsibilities not only in respect of the
builders but they leave designers unpaid and they leave other suppliers
and other professionals unpaid because they sit behind a corporate
vehicle that is just an empty box, and which has no value. That has to
change. We all know who the beneficial owners are and if the owners
don't wish to issue their own personal guarantees to support the
contracts that they go in to they are going to have to put up bank
guarantees that will guarantee their payments because they have been
very quick to run away from their obligations. Perhaps we need some
clients to challenge the accepted corporate mantra and go after those
who hide. Similarly there are some shipyards who have taken on too much
and can't deliver. They have to be held to account too. Therefore
they need to back their words with bank guarantees that they have no
influence on. If certain events happen which allow an owner to call on
those bank guarantees they should be able to do so without the
interference of the shipyard. The yards equally shouldn't just tick
along building slowly or with low quality. They've been producing -
some of the yards - some very poor quality work and delivering a fait
accompli to owners. Good or bad the owners have been forced to accept
bad products. That has to change. Essentially the business has fallen
in terms of its trust and its commitment to excellence to a level that I
didn't think it would fall. I'm not saying that everyone has done
that. There have been some shining lights throughout this whole process
- Oceanco,Lurssen, Feadship, Codecasa, Delta, Proteksan-Turquoise - all
of those yards from my knowledge and experience have behaved in an
exemplary fashion.
There are other
yards who have behaved in a very poor fashion but the problem is the
actions of the unethical and the disreputable have damaged the game for
everyone so we now have to be, as advisors to the owners, as advisors to
the designers, as advisors to the builders and indeed as advisors to
the bankers, more vigilant. We have to control more in a way that we
didn't control in the past. |
John Muir Muir Anchoring
What we’ve learnt in the last 12 months is that things can change
radically. Some of us have been fortunate to have had a lot of work in
progress and fortunately Muir still has. The fortunes of a lot of
businesses changed due to shonky arrangements in the financial world.
Things have happened in the financial world that are certainly nothing
to do with boat manufacturers or equipment manufacturers - rather they
are external. I guess the rules and regulations of the financial people
that caused these problems need to be tightened up. The outcome of
what's happened in the financial world made it very hard on a lot of
businesses.
Experience from
the last 15 months shows we need to be prepared for just about anything
these days. |
 | Jonathan Beckett BURGESS
The need for each and every person (from top to bottom) to turn up to
work every day and to make a measurable contribution to the business.
There is no room for passengers.
The need to have
positive cash flow and regular income streams in diverse areas. Our
Yacht Management Department and our Technical Department has been a
tremendous asset to us over the past 18 months and have provided us with
assured cash flow and stability.
To be
proactive in collecting monies due and to chase outstanding invoices or
debts.
To fight for
every dollar. It is amazing how much you can earn by adding all the
small amounts together.
To concentrate
one's time on activities and deals that generate revenue as opposed to
those that don’t!
To assess the
need for non-essential "nice to haves" and to eliminate as many of these
as possible.
To empower senior
staff to make decisions within their own departments.
To motivate staff
on the basis that we are one team and if we all work hard and achieve
successful results – then this will be for the benefit of all.
To build a
company on a conservative and solid basis and not on the presumption
that business will continue on the up and up.
To be a squirrel.
Some nuts are for eating, others are for storing away for a rainy day!
There will be
much consolidation within our industry - like in many other industries -
and to therefore be open-minded towards new opportunities. |
 | Ken Hickling Awlgrip What have we learned? Our business is resilient and scalable to
accommodate expansion and contraction of the market. Having a
diversified business that has customers outside the superyacht market
spreads risk. The superyacht industry was experiencing a bubble, which
has deflated for some and burst for others. Our business as a supplier
depends wholly on the success of our customers and their ability to find
customers for their product. For the future we need to learn how to
operate as an industry using our various associations to develop long
term collective strengths rather then pursue individual short-term
opportunism. Repositioning superyachts as an ethically preferable way to
spend wealth needs collective effort. |
 | Kostas Antonopoulos Rothschild Platinum Yachts
What I have learned these past months is that people have short
memories and that is why history repeats itself. However, practically
speaking for our industry, I have learned the following: our business is
about selling a “good time” to people who can afford to buy it. Nobody
can afford to buy “time” but some can afford to buy “good times” and
this is what we offer. However, when buying “good times” becomes
business and not a personal target, then it is time to brace ourselves
for a crash stop. Indeed when people started buying yachts not for
themselves but in order to sell them to others at a profit, the signs
were there, shouting to us. We should remember that.
When shoeshine
boys start building yachts in their father’s backyard, its time to
prepare for a market shock - (to paraphrase an expression from a famous
investor of the Street).
No matter what is
happening, people are always thinking about how to “live better”. They
understand that the most valuable asset we have in life is “time”.
Although there is no real recovery in our industry so far, we are all
witnessing that the interest in our products continues to be high. Our
clients are actively thinking about their next yacht.
People who
support the “dream” of the client, no matter how unrealistic or
financially unviable it is, are getting the work. People, who voice
their true opinion and make clear their concerns on a proposed project,
don’t.
Our financial
system suffers from severe system “diseases”, which create - and will
create - financial anomalies for a long time. There is still plenty of
“shadow capital” in the system, i.e. capital which does not exist in
reality, and there is a “bill” to be paid.
There is a whole new brave world out there, which need to buy a “good
time” and our industry can offer this. |
 | Laurent Perignon Camper & Nicholsons
Even when you think you're prepared for the worst, always expect the
unexpected. The forces of business possibly remain as unpredictable as
the forces of nature, in spite of all the analyses and projections that
can be done. Although the latter are helpful, don't get me wrong I like
statistics, they didn't provide sufficient grounds to address the
current conjecture, in a time that's supposedly the most efficient and
computer-sophisticated for information flows and data analysis. The same
goes for the psychology of the consumers, despite the marketing and
communication strategies that aim at understanding and 'framing' them.
The solution, if there's any? To get even more prepared by keeping in
mind that anticipation of, and adaptability to changing situations is
the essential key to renewed success. Hopefully the current situation
has also taught the industry that, to paraphrase Jane Austen, success in
the long run certainly requires 'vista' but especially sense and
sensibility. |
Lee Savage OceanLED
2009 has been a wonderful year for us at OceanLED, despite its many
challenges and everything seemingly going wrong with the world! We’re
still a new company and made numerous mistakes in the early years, but
with the rapid growth of our technology, taking advantage of new market
opportunities and lots of hard work, we came out strong. At the end of
2008 we sat down, reviewed the entire life and growth of the company and
created a meticulous plan for 2009. The key to our success this year,
and the fact that we grew, expanded and launched a number of new
products is simple, we stuck to our plan. We kept doing what we set out
to do, kept doing what we know, love and do best – that is making
exceptional LED products. We resisted the urge to diverge into other
markets and product lines. Heading into 2010, we’ll have the same
strategy.
We believe our
industry, as a whole needs to do the same. We must all keep doing what
we do best, even in this dark economic time. It’s a long distance race,
not a sprint and right now we all need to keep on going, we will come
through, stronger and better than ever. |
 | Luca Bassani Wally
We learnt what we already know; which means that the yacht market could be volatile and that shipyards should always be aware of that in their planning. We also had it reconfirmed that only the serious players should be in the game, making the clients and mainly their lawyers less aggressive towards those serious ones. Everybody in the business, and mainly the media, should help the market recognising and choosing only the serious shipyards.
|
 | Marcello Maggi ISA
We have learnt that putting ourselves always in discussion is right.
ISA, as a new
company (even if founded and managed by experienced managers), always
had to optimise structure and costs according to the real growth, amount
of orders and cash in. Thank god this made us enter the storm with real
customers, building real yachts, really paid, knowing what we could
count on even if our logbook was not showing 5 years backlog.
The lesson is
that we never have to forget the modesty and dedication that our
predecessors have put in this industry. This crisis has arrived in
unexpected times and built up in very short times, when many of us
already scrolled away the artisan hat and put the wall street journal
under their arms, ignoring that our industry has little to do with high
growth and celestial margins. This industry will probably go back and
take care of the customers on a one to one approach again and I
sincerely hope that this will involve not only us builders, but also
suppliers and all that chain of professionals that move around the
yachting circus.
For some time to
come we’ll all probably become humans again, and that is a good result
from a troubled year. |
 | Marco Struik Struik & Hamerslag B.V.
The lessons I have learnt in the last 12 months in general are: stay
focused on the core business that you’re good at and do that as
competently as possible with a minimum of unnecessary costs. Quality
and reliability will last; promises and expectations that cannot be
turned into reality will lead to disappointed clients. With the present
downturn in orders it may be interesting to look into other markets,
however on most occasions that is a completely new ball game and
probably comes with the same lack of orders as our present markets. The
down turn is global and in all sorts of activities. We have used this
timeframe to train our staff intensively with the latest technology and
constantly monitor our work processes looking how to improve those for
the benefit of our present and future clients. Nothing special in my
opinion, however it is essential to be prepared for the next wave of new
private yachts and renovations coming sooner or later. The invasion of
new entrees in the yacht building market of recent years has lead to an
unbalance in supply and demand for specialties. The scarce available
expertise is contracted from all corners of the world in order to
fulfill contractual obligations. This may be a short-term solution, but
no way can this be cost effective in the future. My opinion is that a
new round of contracts brings fundamental choices: go for the experience
and accept to pay for that or develop the needed skills where the
yachts are constructed and accept it may not entirely be to standards
required. Our attitude is keep the clients really satisfied and avoid
disappointments to assure they keep supporting the yachting business in
general and make the right choices. |
 | Marco Villar Astilleros Atollvic
I have learnt that the industry is not as financially stable as I was
made to believe from the press in the last 5 yrs and that the
underpinning professional support and sales layers is a closed shop that
makes it very difficult for a new yard to gain recognition.
Without the right
support from the Industry and Media along with Marketing, Branding and
campaigning in the English language, the task of sales for new yards
from new regions becomes even harder. |
 | Mark Binnie BURGESS
In 2009 the Burgess Management Department enjoyed our most successful
year ever both in the quantity and quality of managed yachts in the
fleet and also in profitability. This success has confirmed that our
decision to invest in highly qualified and experienced staff was the
right one, particularly now at a time when Owners’ minds are
concentrated on taking better care of their valuable assets.
The lesson for yachting must be that the higher standards of
construction, crewing and onboard organisation including technical and
safety management imposed through new and mounting legislation must be
reflected by the ‘Industry’ ashore raisings its game to an equally high
level of professionalism. Those Companies tempted to live in the past
are likely to find themselves falling behind.
It is also extremely important to remember that none of this has to stop
yachting being FUN. |
 | Mark Boddington Silverlining
The past 12 months have been a turning point for the industry.
Only companies,
providing truly great product or services will survive and strive.
The market where
“anything goes” does not exist anymore. It has swung full circle: from
the Owner being in the queue, to the shipyards and subcontractors
queuing for a job. Owners and their representatives are carrying out
much more thorough due diligence to ensure that clients get value.
In order to
justify premium prices, successful companies will need to demonstrate
superior quality, superior craftsmanship, superior design, exceptional
service and continuous innovation.
At Silverlining
we have learnt that it is even more important to innovate and
demonstrate to the market the value of investing in Silverlining
furniture.
Rather than
cutting all spending right down, we prioritised certain areas and
continued investment in order to prepare the company for the upturn,
which will inevitably happen and already we see the positive signs,
coming from other industries. We are investing more than ever in young
people – skills; and research and innovation – ideas. Ground breaking
ideas will always be desired even in a contracting market. The DIY
approach is not good enough anymore.
This year has
also given all companies the opportunity to look at their businesses in
the mirror and say ‘How can we do better, how can we come out of this
downturn stronger and more efficient’. We need to stop using the
“cottage industry” excuse and learn from best business models and
practices out there. Major luxury brands are turning to leading business
consultancies and the likes of mass market car manufacturers in order
to optimise the business model and streamline processes and so the
superyacht industry should follow this example. |
 | Martin Baum Pantaenius
What have we learned in the last twelve months? Well, first of all
being a family business has helped us to face these difficult times
because we have independence from banks. We don’t need the financial
support for our business model. Other dealers and boat agents who
depend on the finance of banks have had many more problems in these
times so from that point of view we are very happy to have grown always
from our own strength and that gives stability now. Also, having an
ownership, which lies solely with the family, provides stability. We
are in a position now to have a long-term perspective and even if the
times have been harder you can actually continue your business model
without management structures changing.
Another important
issue that I’ve found, being a European market leader in yacht
insurance, is that it helps us a lot to have offices in different
countries. There are different economic situations in each country.
With a spread all over Europe and two offices now in the states we can
actually compensate markets that don’t do so well with markets that do
perform better.
The other
important point is that we have a proven track record of our business.
We have always specialised in yacht insurance only. Being specialised
helps a lot to adjust your processes to an optimum. Shipyards that used
to build 30metre boats, for example, that in the upward trend of 2007
suddenly had to start building 60metre boats; it’s very hard for them, I
assume, to compensate and to adjust their working processes whereas we
have only ever sold yacht insurance and that we have tried to do better
than anyone, so being specialised helps a lot in this current market.
From a clients
perspective it is also interesting to see that clients are shopping
around a lot more. Being a market leader in yacht insurance sees us
benefit from this. They are also interested in security and as so often
with the nervousness in the market they look to the market leaders and
the biggest players in the industry. We have very long standing
relationships with our underwriters – mainly German underwriters – and
that has been a great support for us in these times. The clients are
also placing a lot more emphasis on quality because they want the money
they have invested in their boats secured. With Pantaenius we have
provided a proven track record on that quality.
Another important
final point on what we should do differently in the future I think that
the lifestyle events and the champagne parties that have been
celebrated over the last few years are not something we can really
continue with. It is very important to focus on your core values again.
The lifestyle business is something that I think the whole industry
needs to cut back on and now focus on what they are really good at. In
our case that is insurance. Others will probably have to look back and
see what their core qualities really are and work on those. |
Matthew Ruane Vistra
We have learnt that whatever appears too good to be true, generally
is and if you think it can't happen, "Murphy's law" will generally
ensure that it will!
The
extraordinary financial gains made by, among many other economic
phenomena, banks selling financial instruments such as collateralised
& syndicated debt obligations that many of us thought we just
weren't clever enough to understand, turned out to be nothing more
than the reselling of piles of poorly secured debt that was likely to
default. So not all that clever after all - and in terms of
sustainability definitely too good to be true.
As we moved into
the third quarter of last year we witnessed this implode and like
dominoes the world’s stock markets, housing markets and luxury goods
markets tumble over night. The shockwave quickly spread East, taking
down the Russian stock market and turning off the gushing tap of Russian
new business that had helped the large yacht sector to expand so
dramatically in previous years.
By the start of
this year tumbleweed could be seen blowing through sales and marketing
offices of companies selling just about anything from dinghies to the
most prestigious of gigayachts.
With highly
leveraged yachts facing the previously unthinkable spectre of negative
equity, a wave of listings came flooding into the worst hit sectors of
the market, such as semi-custom sport yachts; at least the phones were
ringing again!
To avoid the need
to crystallise significant losses on pre market-crash prices many
owners began to enquire about laying up or "mothballing", meaning the
crew market would be next to feel the pinch.
Now at least the
storm appears to have passed over and a recovering yachting
industry seems to be getting under way again as credit gradually frees
up, markets have rallied and with these signs of recovery comes an
increasing stream of new deals.
Over this period
we have certainly learnt that the provision of reliable and accurate
service coupled with the ability to change tack quickly and
efficiently to respond to client's requirements and circumstances is
what seems to have sustained those in the service sector of the
industry.
We were all
surprised by the extent of write downs in global asset values from
Autumn 08 to Spring 09 and how severely they affected many that we
previously saw as well insulated against market fluctuations. However,
with the post storm atmosphere feeling more cautious, rational, but
critically more hopeful now than 12 months ago, we would hope that these
lessons will set the industry on a more sustainable course, one that is
less prone to the global feeding frenzies propagated by the banks and
their “oh so clever” financial instruments. |
Mattia Massola Italstyle
During this working year, many changes happened to the life of
partners and friends working in the yachting business and to their
families. Some of them reduced their work; others unfortunately lost
it...after years of a growing market an incredible stop broke the dream
of a never-ending market evolution.
All these things
let us think about the future of the yachting and what we can do to help
it.
I personally
think that we all were drugged!!! In terms of excessive consumption and
drugged because we didn't understand that the taken excesses were
impossible to maintain...
The production
process was a joke, everybody wanted the yacht for the incoming new
season and yards signed contracts with impossible dates of delivery, the
most important word was "sell".
Now that there
are fewer clients, and numbers are back to the past, now is the time to
work well and to wait a while and think about the next step.
The time to
project, manage and construct with the right timing and obviously with
the top quality.
Italy is well
known for the Italian Style, for the great attention to each detail in
every product; this must happen more and more in the future and also in
the yacht and mega yacht production.
The clients of
today are more responsible; they want to participate in the
construction, paying attention to details and costs, trying to limit
every excess.
Our clients try
to make as little noise as possible, they don’t like to be
recognised...they prefer to live by the sea and discover more than
living the harbour night life with mega parties.
Long range
yachts, quiet and silent, are for owners that have the time to live
onboard to feel the emotion of waking up in a lonely bay after a quiet
sailing night.
There are some
Owners that prefer a small sailing dingy to a noisy waterbike.
These are, I
think, the clients of our future. People that understand the work of
builders understand that to make a good product there's the need of the
right time. People that are not in a hurry.
In the Liguria
region, where we live, we are used to saying that the richest people are
those that have time to spend for themselves and their family.
I imagine a new
era where people will pay more attention to life, to health care, to
what we eat, and to what we receive and give back to nature.
In the next year
we will concentrate our research and activities on a sustainable
yachting evolution made of simplicity, pure design, natural materials
and easy cruising. |
 | Mehmet Karabeyoglu Proteksan-Turquoise
The latest crisis of the world economy obviously has caused damage to
yacht builders in general. As a businessman, we should expect turbulence
and should also be ready for the worst. What has happened is a lot of
yacht owners (present and future) thought they had more money than they
actually had; most of it was large sums shown on balance sheets. When
the reality hit them then it was obvious to cut down spending including
large yachts. Most people who had not highly leveraged, lost about a
quarter of their wealth but some lost much more. The real wealth is
still there and they will start buying boats again at the beginning of
next year. But unfortunately, now there are too many yacht builders and I
am afraid some of them will disappear or change hands. I do not think
the industry, which is based on competition, needs a drastic change;
however this will be a different matter for individual shipyards and
especially silent owners of some of them. Every yard will adapt to the
present conditions of supply and demand and more important yacht
financing capabilities. I do not think yacht building is any different
from other industries serving luxury segments. |
Michael T. Moore Moore & Company
The past year was traumatic for a number of our clients. Looking
back, it is clear that we found a new closeness with our clients as we
worked as a team through their business troubles and worries and
situations. We found it much harder to create win-win results than in
the past. In some cases our clients simply could not perform on their
contracts for reasons of cash flow. We had to use new skill sets and
approaches to create the greatest likelihood of an acceptable result.
In short, across the board, both with us and in their business
relationships, some of our clients simply could not perform or were slow
to perform in meeting their obligations. In this time, we found new
intensity and an opportunity to support our friends and clients which
called for more creativity than ever before in our approaches to
difficult matters and called on us to test solutions that were
unprecedented.
What we learned
in the past year, and now looking forward, is the wisdom of
diversification, the importance of strong personal relationships and the
value of one’s reputation for honesty and fair dealing. Cost cutting
and other necessary management measures are important, but when you have
cut all you can cut, you need people to trust you. For my part, I know
the clients I can trust and those are the ones we stayed with on old
business. We also accepted instructions from them on new business based
in some cases on a prayer and a promise. Paramount in our decisions to
go forward with them was their reputation and past business practices.
Now that cash
flow is returning and transactions are picking up, it is a good and
satisfying feeling to know we have survived the worst and are looking
forward to better times. |
Mike Worthington-Leese John Winterbotham and Partners
The last twelve months have been a very sobering time for all of us
in the service side of the yachting business, and that includes us as
surveyors. We have lost a couple of new-build technical supervision
projects where the clients have cancelled because of the financial
‘heat’, but every cloud has a silver lining: we have seen a marked
increase in general enquiries regarding refits, and in pre-purchase
surveys. I think the former may be because owners are waiting to see how
the new-build market settles down (though I give my thoughts on that
shortly), and the latter is because there is quite a bit of sales
movement up to about 55 metres, where vessels are being sold at cheaper
prices than a year ago.
I think there
must be more transparency in the future: clients want to know exactly
what they are getting for their dollar, whereas previously they may have
thought mistakenly that big bills must have meant good service, no
question. More efficient alliances of smaller companies may become the
thing of the future.
Allied to this is
the whole concept of discounting, presently prevalent in the
second-hand market, but also creeping into the new-build sector. The
danger of lesser-known builders selling products at cost, or even less,
could obviously be suicidal for them in the short term, if they don’t
have funding, but the genuine more reputable competition could also
suffer, with an equivalent loss of orders, leading also to their
unwarranted demise. A similar phenomenon occurs with unknown start up
yards, offering apparent bargains. By the time clients realise that the
years of experience elsewhere was in fact worth paying for, it could be
too late: those experienced yards may already have terminally suffered.
To survive, such yards will have to stick to their principles, but
become more efficient: labour costs can be more easily manipulated than
materials costs. |
 | Nasser Alshaali Gulf Craft Speaking at the Gulf Superyacht Forum 2010 "The opportunities that we see in this market are in the maturity of the maritime industry. It’s slowly but surely getting more and more mature. We see more use of the waterways and more creative use of the waterways. We’re seeing more berthing and more marinas coming up. And we’re seeing a community of medium-sized yachts that are candidates for upgrade to superyachts are growing in the region." |
Oliver Treutlein Oliver Treutlein GmbH
What we have learned in the past 12 months is what we had in mind in
previous years, and it is possible to describe it in one single word -
"Quality".
This word Quality
stands for a chain of relations, which brings at the end success to
everybody who is involved.
It starts with
the Quality of Life, which I try to give to every single employer of OT.
This creates the motivation to give the best for our product,
installation and service.
With this product
of quality we have great luck to get clients, which we might call
quality clients, who are stable, nice and fair and focus on working with
suppliers who match them.
With these kinds
of clients we generate a great success and at the end of it everybody is
happy.
And that is
exactly what we learned in the last 12 months; that Quality will stay
even in the hardest of times. |
 | Olivier Blanchet BNP Paribas
The past twelve months witnessed structural changes in the banking
industry with some consequences on yacht financing business. Thanks to
massive government intervention, the crisis seems to be stabilised and
we are looking at the light at the end of the tunnel. While some former
leaders in the financing activity disappeared, remaining active
protagonists have strengthened their lending conditions in terms of
pricing and financing structure and now favour financings backed by a
global banking relationship instead of pure asset finance.
In 2009, we have
seen some existing owners decide to differ their future yacht investment
and keep their yacht, as such, protect the value by maintenance
expenses, because with a yacht well maintained, the value will flatten
out and not fall away. The future owners are postponing their purchase,
renegotiating their building contract but at the same time supporting
the charter market - especially on the segment above 50metres. Indeed,
the decrease by approximately 20% of the UHNWIs community (in terms of
total wealth and number of individuals) raises the issue of repayment
capacity and has also consequently effected the current race for
rip-offs on second hand units and repurchases of construction contracts.
There is a view
that perhaps yachts are slightly strange assets from a financing
perspective as they are negative future cash flows oriented with limited
expectation in terms of equity gain at the resale point. However
(mega)yachts are very tangible and valuable assets and don't depreciate
like a second hand car and cannot, and never are, considered as a toxic
asset. This evidence is in the willingness to optimise funds lent
through the yacht financing activity while limiting risks. Financing
wise in 2009, the yacht industry has been giving us an opportunity to
assist very high net worth clients, with a clear objective to broaden
our existing relationship on the corporate side and/or private banking
side.
Besides, buyers
now seek transparency with regards to the conditions and prices they are
offered from banks, yards and brokers and see in the current market
situation an opportunity to challenge the up to now supremacy of their
counterparties which is directly linked with the balance of power
between demand and supply. As ship owners did by the past, maybe time
has come for the yacht's owner to organise themselves in order to
influence the yacht industry too.
As a consequence,
we tend to think that the yachting industry shall continue to structure
itself and learn from the difficulties the market recently faced by
trying to reach a point of equilibrium where all protagonists feel
confident and satisfied with their business relationships. This could be
done, among other solutions, by implementing more transparency and
professionalism in this “leisure business”.
To conclude, the
yacht industry will go through a rationalisation process where quality
shipyards and managers supported by experienced crew with quality
destinations will go through the downturn without much damage. Some
companies established during the boom, between 2004 and 2008, and
showing little fundamentals will not survive. However, we are carefully
positive for the future mainly because spending a nice a day in a nice
place on a nice boat will always be priceless. This will support the
development of the yacht industry in the coming years, providing that
the number of berths and size will follow the same pace. |
 | Paul Dielemans Holland Jachtbouw
Well it was an interesting 12 months and what we have learnt is that
your businesses can be influenced very, very strongly by outside
influences. We try and concentrate at Holland Jachtbouw to do a proper
job, to get our processes organised and then with the crisis came all
this stress and influence from outside and this was a tough issue, with
industry-wide absence of demand. You can run a business and you can cut
costs but if there is no demand for your product it is going to be
tough. So for the future it is essential for it to recover, because not
only is the economy still low, but the industry still has quite a few
projects which are still in the market due to the fact that current
owners have stepped away from their projects. Not just that, but also
boats were being built on spec and they now have to be sold in a tough
market. So I think it will take a while and it is not easy, but we will
adjust to it. At HJB we are extremely fortunate that we have two
beautiful projects with very solid clients and we signed a new project a
month ago. So we are getting through the rough times to be sailing in
fair weather again in the near future. |
 | Paul Smulders Radio Holland Group
What we, as RHG have learned is that it is not a matter to simply
supply and install your products, it is a matter of being a true partner
of the yacht operator/owner. Taking his operational costs as the
leading factor into account. The direction we are taking is a matter of
‘quality of service’ relationship with our customers.
That is why we do
what we do now, offer a combination of hardware, design, supply,
installation and also service and connectivity. Remote monitoring and
diagnosis is the way to go! |
Peter Hurzeler OCEAN Independence
We re-learnt the lesson never to forget the need to deliver real
value. As an industry we must consider this very carefully. It is not
enough to just help our clients through good and easy times, it’s the
responsibly of all in our industry to deliver real value at all times.
Otherwise we will loose, as an industry, our most valuable assets: our
clients. We must therefore always look at the value we can add and at
what our clients actually want, which is basically to have an enjoyable
time afloat. It is our task to deliver this in style yet with simplicity
and integrity, rather than with amazing glitz-blitz accompanied by
unnecessary expense or complication.
We also re-learnt
that modesty sometimes does pay, as does hard work and optimism, and
that the yachting industry appears to be, in fact, a business sector and
not a playground and that economic principles and worldwide realities
do apply. Good! |
 | Remco Immink Ciris Capital
The last 12 to 18 months have been very challenging for the yacht
finance market. We have seen the number of active financial institutions
(banks and lease companies) reduced from approx 20 market players to
around 2.5. In essence we have returned to the position in 1995.
As an industry we
have enjoyed the advantages over the past few years of having new
players enter the market - now we face the disadvantages of most of them
leaving again. The lesson is that we must focus on a long-term strategy
- a yacht finance solution for the market that will be a safe haven for
any critical times that may come. An alternative solution parallel to
the banks that still are, or will become, active in the yacht finance
market. A solution that is based on conservative terms. |
 | Remy Millott Pinmar Standards, finishes and expectations appear to be unaligned. The need
for the industry to move towards "Greener" products is new territory.
Paint manufacturers are seeking to maximise product development
capabilities to meet the demands of durability and quality of finish.
Managing client’s understanding of these issues has become a material
part of our relationship as the products have had to change.
Pinmar has been
painting yachts longer than most and during the past year it has become
apparent that there are many (and varied) opinions as to what is an
acceptable and achievable paint application and finish. Pinmar aims to
be part of an industry led initiative to provide greater clarity and
measurability on achievable results.
The financial
crisis had the affect of delaying a number of contracts however our
turnover was pretty much as the previous 12 months albeit margin
pressure did filter through to reduced profitability.
This year the
refit business seems to be somewhat back to normal. There could be a
number of reasons for this; the need to catch up on the works which were
deferred, re-investing in an asset for sale or charter - as the new
build sector slows down, it may be because owners are keeping their
current yachts and want to make them look new again. And of course the
fleet of superyachts has increased so much over the last few years and
now many yachts that one still thinks of as relatively new are in fact
coming up for their first refit and repaint. If this trend continues,
with the refit business staying healthy while the number of owners
ordering new boats decreases, it will start to affect companies relying
on new builds over the next two years and beyond if the market does not
pick up again.
It is interesting
that in periods of pressure the relationship between our business and
clients has strengthened, as there is a common need to support one
another in times of difficulty. In this regard we have renewed our
commitment to them in terms of both quality of work and personal
service.
Whilst many
companies globally have looked at ways of streamlining their operations
and maintaining margins through the controlling of costs and wastage. I
think it is necessary to also analyse our companies and look at ways of
becoming more “efficient” which can only benefit our clients. I think
in the coatings industry only the most financially stable and
“efficient” companies with a history of quality will manage to maintain
sustainable levels of business. |
Richard Gardiner Global Services UK Ltd
There is a greater requirement for transparency. Owners and managers
are asking more and more to have clarity on charges and billing.
We adopted this
attitude to our business many years ago but now we have to take this to a
new level. We are launching a new on line computer ordering system
which will enable the customers where required to see the cost of the
goods we are purchasing.
The requirements
for better service and greater efficiency have also become paramount.
This is to keep prices down and give an overall better level of service.
We have achieved this by restructuring the way we work and developing
the computer systems we use. |
 | Rob Luijendijk Amels B.V.
Shipyards are dealing with a “buyers market”; we quickly have to
respond to this. Nevertheless Amels has successfully sold 3 projects
since the collapse of the Lehman Brothers.
Potential buyers
demand more security from the builder, which is only logical in
turbulent times. Amels has been able to offer this through the Damen
Shipyards Group, which is a family-owned business with long-term
reputation and continuity.
The brokerage
market started to move slowly again and we noted that the first large
brokerage sales (Amels MY SHANTI, BOADIACEA, LADY IN BLUE and ADDICTION)
from the past few months were built by pedigree shipyards. The quality
and “brand” of a yacht becomes even more important if an owner wants to
secure his investment.
Lack of finance
for buyers is a general problem. We must be able to work on tailor made
finance solutions and have the experience for more complex structures
through the Damen Group.
Again we see
that, as a shipyard, the Superyacht building arena is not the place to
operate on a short-term basis. Unfortunately this could leave losers
behind on both sides. Superyacht building is a very difficult business,
which involves long-term commitment, high risks and marginal returns.
Amels cannot
“change” the industry; every shipyard has its own responsibility.
Amels will
continue to explain to brokers, owner’s representative and owners how
our business is structured and prove our proper business ethics by
long-term commitment and our solid business track record over the past
decades. Our current owners and yachts are our best reference.
Key necessities
are: quality, flexibility to respond to the market circumstances and
controlled growth. |
 | Robert Curry Robert Curry Naval Architect Ltd
ISO TC8 /SC12 / WG 2 Large Yacht Safety was formed about two years
ago by ISO with the support of ICOMIA and the UK MCA to address the need
for clear international standards in certain areas of yacht design and
construction.
The first project
was to develop an ISO standard for windows and port lights. It is well
on the way to completion.
The next project,
just started, is to develop an ISO standard for structural fire
protection of large FRP yachts.
Membership of WG 2
and the WG 2 project teams comprises appropriate industry experts drawn
from design firms, yacht builders, equipment manufacturers, national
marine industries associations, flag Administrations and classification
societies. Owner’s representatives would be a welcome addition.
Members represent
their national standards organisations - I attend as UK representative.
What has become
clear to me over the last 12 months is that members of WG 2 and WG 2
project teams; representing different organisations and companies, and
contributing different areas of expertise do indeed work in a
co-operative manner to establish detailed standards that present good
industry practice and to provide the desired necessary level of safety.
The ISO standards
presently under development by TC 8 /SC 12 / WG 2 are to provide more
explicit detail to (and to eliminate the greatest extent possible) of
the need for interpretations of existing requirements presently given
in, for example, in the LY2 Code.
My experience
from input through GSF and from extensive personal contacts is that our
industry is not only concerned about inconsistent interpretations of the
present Rules and regulations but is determined to work together to
address these inconsistencies.
It is intended
and expected that as a result of the diverse membership of WG 2, and
given the role of an MCA Convenor, the standards will be acceptable to
all sectors of our industry including flag Administrations and
classification societies. |
 | Robert Tobin Dohle The key lessons I take from 2009 is that the core of your businesses
should be as lean, efficient and profitable in the boom years, as you
need it to be in a down turn. You have to plan and invest for the long
term and if you don’t focus on running the business correctly in the
good times, the pressures will be unmanageable in the bad times.
Decisions have to
be made logically on the facts rather than based on ego. This industry
has more than its fair share of egos and lifestylers and whereas that is
not necessarily a bad thing, it is a poor combination in the context of
running a business.
Our business has
grown steadily and at a pace that always left it fit for purpose and
capable of delivering high quality service and my focus is very much on
the long term. We are now, in some cases, looking after the second
generation of original clients, as families grow and wealth is managed,
our long-term focus and performance is being rewarded by continuing
trust and business.
We spend a lot of
time fighting fires for Owners, Captains and Crew on all sorts of
matters and to do that effectively, you have to have your own house in
order first.
This necessitates
a high level of investment in and commitment to my staff and their
continuing professional development and provides me, and the business
with their long-term commitment.
In these
uncertain times, clients put more emphasis, when selecting suppliers, on
stability, quality and resilience and still expect and deserve the same
level of professionalism and cost effective solutions, as they would
have done whilst business was still booming.
Having always
been a small but efficient company meant that financial uncertainty in
the global marketplace brought no undue pressure to cut costs, in fact
in 2009 we have expanded the office by 30% and brought on four new staff
with an additional two due to start in January 2010.
Collective
short-term focus is detrimental to any industry and in our case we have
the most important and influential element of the industry (the brokers)
famed for having the shortest attention span in the natural world (the
next deal).
Heavily
discounting the asking price of yachts in order to get a deal has eroded
any real semblance of value and results in buyers waiting to see what
happens next. Just like investing, owners look at the data and judge
when to step in to a market or business so the brokers play a
significant role in stabilising the perceived value drain and bringing
buyers back to the table, but to do so they have to look further than
the next deal. |
 | Ron Holland Ron Holland Design
What I have learnt: when we have good workflow lead times, it is
still necessary to be mindful of keeping overheads controlled.
Even having a
design contract and fee deposit does not ensure the income stream will
be guaranteed.
We need to keep
looking for ways to be more efficient. More communication with shipyards
and suppliers would be an asset.
If I listen to
the client, and incorporate the best of my design experience, then that
is the key to a successful design result. |
 | Samir Badro Greenline Group Speaking at the Gulf Superyacht Forum 2010:
"In the end everything will be ok, and if it is not ok, it is not the end" |
Seb Wooderson Sturge Taylor & Associates
We have realised that even in the midst of a global recession,
service and claims payment remain paramount despite this being a cost
driven market.
Owners remain
committed to their asset, its protection and the welfare of their crews.
The lesson we
have learnt is that owners who have experienced good service and claims
handling will not compromise these for a "better" price. |
 | Simone Marconcini Benetti Sail Division s.r.l. Speaking at the Italian Superyacht Forum 2010 "I think this is a very tough moment for us, for all the industry. If you look from the big players’ point of view, you realise they have to dramatically change their business model…so yes there is an evolution or a revolution" |
 | Sonay Gunay 777 Yacht Group Company
What a time to start a business! Two years old and still alive and
kicking!!! People may think I am crazy but we are having fun. We have
seen every extreme, but in Turkish yacht building we have seen a
commitment to come out this crisis stronger and with a greater
commitment to quality. The crisis has exposed those just building to
make fast money. The majority of these "builders” will not last this
crisis. Yacht building in Turkey has been tarnished by some ill prepared
and unprofessional builders. But this crisis has shown that the family
owned, controlled and professionally run Turkish builders such as
Proteksan Turqouise, Dunya, Perini Navi, Peri Yachts and Sunrise are
capable of building on tight budgets first class yachts to rival any
comparable builder in Western Europe, and they do so not because they
are Turkish but because they have a highly trained and skilled workforce
with lower overheads. Yachts such as Maltese Falcon, Vajoliroja,
Odessa, Leo Fun, Sequel P, Africa and the soon to arrive Red Square have
changed the way the world looks at the Anatolian yacht building world.
Perini and Vitter’s respectively through their Picchiotti and Cyrus
brands have shown their commitment to Turkey for the post crisis world. I
think many more will do so also.
Accordingly, the
on-going collaborations and joint ventures will prove their importance
especially from the second half of 2010 and will ultimately highlight
the significance of Turkey.
As a result the
financial climate is forcing us to discover new horizons and broaden our
point of view. Focusing on our backyard and disregarding the rest of
the world will no longer be viable. |
 | Stanley Bey Owner
I actually have learned quite a few lessons from this year we are just
completing. One, do not try to sell what people in our world are not
buying. (Boats and Charters this last year). Two: follow trends and
learn from them i.e. business is improving and be at the forefront to
invest in the vigorous restart that we are facing in the entire world.
That means locating your vessel where it will charter. Hire the best
suited Charter representative you can find. And be crewed and ready to
go to work and / or be sold depending on your aims. |
 | Steve Puckering ANT
In completing this process we have learnt more about our own company
and the Superyacht industry than we had ever achieved in the preceding
12 years.
Most importantly
we have reviewed our business processes and continued our original
philosophy that a sound business is structured on sound financial
planning, realistic projected turnover and a comfortable profit.
We have evaluated
the investing and financing options available and improved our planning
processes to ensure optimal decisions are made. We now project the
consequence of these decisions in the form of a comprehensive business
plan, and regularly compare current and future performance against this
plan.
ANT has
rejuvenated its already strong links with partners and/or key suppliers
who are crucial to a company that supplies and installs the latest and
best technology money can buy. To this end, we have continued to invest
heavily in research and development.
In addition ANT
established collaborations with technology market leaders outside the
Superyacht marketplace, and sometimes outside the wider marine industry,
to bring cutting edge technology to our clients.
We have always
spent a lot of time reaching out to our customers but recently really
focussed on more frequent face-to-face meetings, phone calls and e-mail
exchanges with clients to ensure we supply exactly what the principal
was expecting. ANT has also worked hard to maintain its well-respected
adage of the ‘customer always comes first’. The attitude has always
been to act first and ask questions later – this customer/client focus
is, as we all know, absolutely key in this industry.
No Industry is
safe from the clutches of a worldwide recession and we should ensure
both as an industry and on an individual scale that businesses plan for
the next dip as well as the happier ‘boom’ years.
Strategically we
should group together as a proper, ‘normal’ industry to establish a
‘Confederation of the Superyacht Industry’ as a top business lobby
organisation. Offering specialist services and with worldwide influence
with government, policymakers, legislators, and associations to get the
best advice and assistance for Superyacht businesses. |
 | Stuart Robinson Robinson Marine Interiors
Well I think that with the dramatic change in the market place the
important thing is to be working closely with your existing customers -
because there are not so many new customers out there - and take care of
them. From a manufacturing perspective, the drive for efficiency is
important because the end user is looking for better value in this
climate and it’s crucial that you can deliver them better value
profitably. |
 | Terry Disdale Terence Disdale Design
There is no such thing as a free meal – the only free meal is the one in
the mousetrap. We also learned that the second mouse gets the cheese! |
 | Toby Allies Pendennis Over the past year there has been a number of big changes in the
industry and the change in enquiry levels has altered the scope that
people are looking at the business moving forward. What we've learned
is that there has been a huge increase in specialist refit work and our
investment into this field starting in 2004 has given us a really good
opportunity to grow and expand in that area, which we've undertaken in
our facilities to increase our dock size, our spatial square meterage
and to really capitalise on demands in the refit world. So people are
not necessarily ordering as much as they were on the new build side of
the industry, they are looking at what they can do with the existing
fleet that's out there and we are in a really good position to serve
that. The decisions we've made over the last five years have been
really crucial to give us a strong position moving into a downturn in
the economic conditions. Consequently, we're very pleased with the
strategic direction we have followed. On the flip side we've all learnt
a lesson on hedging currencies and seeing how we can manage our supply
order books. I think a few businesses had a difficult time in the
movements of currencies when they've got strong supplies from them
whether they are European or US based economies. On top of that I
think the way that we have our specialist trades on site – 280 qualified
Pendennis trades people within the shipyard – I think that has been a
really good position for us to be in so that we are not relying so much
on sub contractors. When the economy is fluctuating like it has been,
the fact that we have our own staff there, to be able to provide
electrical and engineering solutions has been key. I think we've learnt
a lot over the last 24 months and I think the industry is going to be
all the better for it. In conclusion, we've made some decisions that
have given us a solid foundation and to move forward for the next 20
years of Pendennis. |
 | Tony Hambrook Alloy Yachts
I think that what we’ve learnt about our business is how fortunate we
have been having no debt, for no other reason than we have a lot more
confidence and security. I think that’s a real lesson and we will try
very, very hard in the future to ensure that we never get into any
situation where we have any debt level at all. That’s the first part of
your question. For the second part, I’m not at all convinced that we
need to carry out any major changes. We will continue to be very careful
and prudent about our customers and about our documentation. Of course
none of this is change. We will carry on as we have been, being very
careful about our business and how we go about it. |
 | Vincent Larroque Monaco Marine
We have learned over the last 12 months that we had to be very
reactive and able to adapt our production and services needs for our
customers.
With the
financial crisis, many yachts were sold or will be sold in the coming
months and new owners will arrive on the refit market.
The thing is that
we need to offer the best services and to institute the trust in this
changing industry. |
Willy Persico Southern Wind
Ever since I started my career as an entrepreneurial yacht builder in
1990, my approach has been to proceed by taking small incremental
steps. Until recent events took over, the market was booming, a sort of
Eldorado for the marine industry, especially in the luxury big boat
sector. I must admit that at the time I was tempted to expand
production, because it was frustrating to see our production capacity
unable to satisfy the demand. Now I know that it was the right choice to
maintain our standard production, resist compromises in terms of
quality and avoid unnecessary financial risk.
The shipyard
today has no debt with the banks and we have not been obliged to reduce
our workforce.
What I learnt, in
other words, is that our “Slowly but surely” philosophy was right.
Our industry
should learn from the lessons to be much more careful in interpreting
some gold phases of the market and to be more prudent when making
financial investments and bank exposures. It is also important to never
stop investing in the product. The best quality/price ratio seems to be
the answer. |
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