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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.

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.

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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.

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.

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.

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.

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?

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.

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.

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.

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.

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.

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.

Experience from the last 15 months shows we need to be prepared for just about anything these days.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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!

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!

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.