Monday, Mar 07, 2011
Gulf News
Gulf craft eyes opportunities beyond local clients
Dubai: The Gulfs yacht industry is on the lookout for the next favourable roll of the waves to get back into reckoning.
Through 2009 and early last year, the industry shared a similar trajectory as the regions many marina developments which were launched with much fanfare and then got nowhere. For the regions yacht-makers it was about receiving a slew of orders during the rollicking times and then drying up all of a sudden when the downturn came calling.
But the regions leading names in the business did not while away their time for the winds to turn favourable all over again. The canny ones went after new markets and clients, and this way lessening their dependence on locally generated orders. This year too, these businesses are looking to fine-tune their multiple markets approach even further.
UAE-based Gulf Craft takes its place among them. Erwin Bamps, chief operating officer at the yacht-maker, revisits the strategy that worked well for the company.
GULF NEWS: Gulf Craft has historically supplied two end-user markets leisure and the commercial. The short-term prospects for luxury yachts in the region do not look too bullish at this stage. If that is the case, do you feel an improvement can be sighted only in the second-half of this year, if at that?
Erwin Bamps: We have actually already noted a recovery in our luxury yacht sales starting last year with a 40 per cent increase in our sales revenue compared to 2009. But most of that recovery in the past 12 months is thanks to our exports to markets like Europe where we have been able to carve ourselves an increase of market share. However, we are also cautiously optimistic about the recovery of the leisure marine market in the Gulf, and see new growth in markets like Qatar and the UAE.
What about orders from commercial clients such as the regions coast guards? Are you now starting to see a slight upturn from these clients?
The functional market, where we meet customers like hotels and resorts, as well as coast guard and semi-government organisations, never rests. And we have been able to address this clientele with more attention in the recent years, resulting in a growth of sales revenue from that customer base.
You did have a good order book going in 2009, but last year was particularly tough. Would you agree?
Actually, and luckily, I disagree. We actually saw opportunity in 2010 to enhance our sales.
Coupled with the downturn in the regions property markets, theres also less emphasis on the large-scale marina developments. Would this impact on your short- to medium-term prospects?
That is not fully correct. There are continued marina developments, not only in the UAE, but also around the Gulf and even in India. But maybe there is less hype around these developments nowadays.
The economic downturn has given a breathing space for developers to catch up with the sudden increase in market demand for mooring spaces noted in recent years. It actually offers opportunity for the new boat owners to have more choice available for mooring their boats in the near future.
Of the orders that are coming these days, do you see clients preferring to go for smaller vessels and less of the luxury trimmings?
The market is quite polarised and we see demand at the both ends, for smaller boats on one side, and for super luxury, super yachts on the other. The market for medium-sized luxury boats has suffered more than in the two extremes.
During the good times for the regions economy, the company had significant orders coming in from outside, even Europe. Do you feel this is the gap the company would need to fill?
Globalisation of our business in the last decade has prepared and helped Gulf Craft to weather the economic downturn better than its peers. And is at the same time, the reason for our growth in a global market where others are still seeing a flat line or even a further contraction in sales volumes.
Are you looking at any additional production capacities, locally or in the region?
Yes, we are. Being a manufacturer with a long term and global vision and a healthy balance-sheet, its important to think beyond recession, and prepare for a next growth step, while others are still worried about paying next months bills. We are hiring at the moment.
In the past, there was talk about the company even acquiring another entity. Is there any truth in this?
We are continuously scanning the market for opportunities, and are not ruling out any future expansion by acquisition or merger deals. However Gulf Craft, with a long-standing heritage, and large in-house skill set, has always thrived and believed more in generic growth, growth that is based on further enhancement of the in-house know how. And to build on the expertise of the existing staff allowing them to grow with the company.
Production: Range of vessels
Launched in 1982, Gulf Craft has an annual production capacity for 400 yachts, which could range from 20-foot units to 135-foot luxury vessels. More than 70 per cent of its production is destined for the export markets. It operates its manufacturing yards in Ajman and Umm Al Quwain, the latter principally for the super yachts, as well as operating another base in the Maldives.
By Manoj Nair, Associate Editor
Gulf News 2011. All rights reserved.
