Luxury yachts to propel Gulf Craft sales

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July 2007
More mooring facilities needed for Dubai to become a prime destination for world's super yacht owners
Gulf Craft IncGulf Craft Inc., the Ajman-based manufacturer of boats and yachts, has been reporting 30 per cent growth annually during the last five years and it is expected to announce Dh 300 million in revenue growth for the year 2006.

With the recent signing of a strategic alliance with Kuwait's Rehal Logistics, Gulf CraftGulf Craft is on the threshold of a new era of expansion. The financial muscle resulting from the new alliance will help create additional manufacturing facilities while the synergy will also give the company access to the fast-growing new markets for luxury yachts and leisure craft.

"The alliance partner Rehal is responsible for the Oqyana project the 'Australia' component of the UAE's World Islands development that makes the provision for about 1,500 private yacht berths and a marina with a capacity for more than 1,000 boats and yachts," Gulf CraftGulf Craft's executive manager Erwin Bamps said.

Operating from five production units, the company employs 1,200 staff members and produces over 700 vessels ranging from 20 feet to 130 feet. The Business Weekly caught up with Bamps to know more about the company, its growth, expansion plans and the luxury yachts industry in general.

The company was set up in 1982 to build small vessels and boats, mostly for fishing purpose. Over the years, boats that the company built became bigger and more sophisticated as customers were looking for more and more luxury vessels.

Core business
"Our core business today is focused on the luxury aspect of boating. Gulf CraftGulf Craft was the first company to build fiberglass boats in the region and we have been leaders in the industry in terms of sizes of boats that are built. Today Gulf CraftGulf Craft is no longer just a boat builder. We provide all the products and services that have something to do with the boat-building business, including maintenance, repairs, as well as parts supply," Bamps said.

Asked about the prices of boats, Bamps said they range from Dh50,000 to Dh 40 million for a 20-footer to the 130-foot Majesty super yachts respectively. "Our prices are competitive; otherwise we will not be doing a successful business here. We're not the cheapest. But what we deliver is value for money and our styling, features, brand name, after sales service, capability, re-sale value, reliability, safety and price are second to none," he says.

Nowadays, more and more UAE residents are becoming inclined to take up boating for a hobby or leisure. The regional customer base for yachts has changed from mainly nationals to expatriate residents. "The market is more diverse than ever before, more demanding and customers expect products and services of the same quality as in mature boat markets overseas," he says.

"With the Dubai brand gaining global acceptance, people who come here to live and buy a house in The Palm or an apartment in Dubai Marina are ready to spend their money here. These people are looking at Dubai now as a place to invest, not only to work. These are the people who are more inclined to own a boat," according to Bamps. He draws a parallel with how Gulf CraftGulf Craft has adapted to the changing market environment over its 25-year history, developing from being a builder of small leisure craft to becoming a world leader in the design and production of super yachts. The company is one of the only a handful of boat makers capable of producing vessels of 100-feet and over, with an annual production of about 700 vessels of up to 130 feet overall length.

Gulf CraftGulf Craft recently delivered its first Majesty 130 the biggest yacht built in the Middle East to a customer in Australia.

Record growth
Bamps says numerous waterfront developments and mega projects such as Dubai Marina, The Palms and Dubai Festival City, have triggered record growth in the boat market. An estimated 30,000 new berths for boats will be built over the next five years in the UAE. In Dubai alone, mega projects will feature large marinas, capable of hosting thousands of boats, according to him. "Boating has become a part of the industry now. It's not just the fishing industry. It is entertainment at the corporate level, organised by hotels, resorts and charter companies," he says.

Bamps cites Dubai's stable political situation, astounding economic growth and the 'sky is the limit attitude' towards becoming a leading world destination for shopping and tourism as the positive aspects for the local boat-building industry.

"Customers' first priority is a marine lifestyle, adding value to the waterfront property they invest in, but being more than just a boat and a mooring space," he said, pointing out that more marinas and mooring facilities are needed to help Dubai in its efforts to becoming a 'home port' or a prime international destination for the world's super yacht owners.

Gulf CraftGulf Craft now exports more than 70 per cent of its output to the GCC countries and the wider Middle East and North Africa (MENA) region, Australia, the United States, Europe and India, and its super-luxury vessels are found in virtually every major harbour of the world. "Our success is mainly due to the fact that our crafts are built to stringent norms, which do not compromise on quality, safety or speed. Hence, we manage to export more than 70 per cent of our annual production," Bamps says.

Regarding boat maintenance, Bamps says, "One of the most difficult environments is marine with the heat, the water and the salt affecting the boats. Boat maintenance is much more tedious than taking a car for a wash, but people now enjoy it. That's part of a different experience. Now most of our customers have a crew for bigger boats to take care of their maintenance."

Bamps is very optimistic about the future of boating in Dubai. He says finally people have found themselves a way to the water and the industry is going to witness a real boom in the coming years.

Boating has become part of the marine industry now. "The market here is maturing slowly in terms of boat ownership. But the big boom still is yet to happen. May be it will not be as big as many people think, but boating industry will definitely pick up. And it's not only in the Gulf; in India, Kuwait, Oman, and Saudi Arabia as well," Bamps says.

By Vinod Kumar PK

© The Business Weekly 2007