A REPORT WORTH READING 192 The 02/2019 Superyacht New Build Report

OWNER DESIGN BUSINESS Owners give their A quickie with Dickie honest feedback on their own new-build experiences The inimitable Dickie in a compendium of Bannenberg becomes the our most candid latest designer to join Georgia interviews. Boscawen for a pint.

TECHNOLOGY

“If you’re a superyacht builder and you ask someone to import Burmese teak, you are in effect commissioning someone to commit a crime.” Jago Wadley, senior forest campaigner for the Michael Breman and Theo Hooning Environmental Investigation Agency debate our two-tier market hypothesis

FLEET BUYER The Superyacht New Build Report

Completed and scheduled deliveries Delivered In build Number of yards delivering 223 & 125

300

250 The average number of annual second-hand sales and new orders, respectively, since 2013. 206 200 190 67 159 155 153 151 OPERATIONS 150 144 107 124 101 100 80 77 72 75 64 ‘An owner I worked for actually changed the

50 39 when looking for a larger new build 59 3 because of the amount of post-build work 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 we had to conduct to correct simple issues.’ An interview with the president and secretary general of SYBAss

Industrialists: Michael Breman and Theo Hooning

BY WILLIAM MATHIESON

TSR travels to the Lürssen headquarters in Bremen, Germany, to meet the president and secretary general of the superyacht industry’s foremost new-build representative body.

14 The Superyacht New Build Report ISSUE 192 15 Throughout this report, by using empiri- decisions and he has never come to me cal data, we have been at pains to and said, ‘What the hell are you doing?’. “Our core underline the true status of the new- So it creates a stable leadership for the build market. Within these pages, we board to work with. mission is to have proven that the new-build market remains sustainable and is one of What is the composition of the ensure we have longevity – for an elite tier of yards, that board? is. The global output, in unit terms, TH: We represent a nice mixture of has chugged along at a relatively flat the geographical areas, with the vice a relationship pace, with a small handful of president [at the time of writing, Perini enjoying high levels of activity while Navi’s Fabrizio Sgariglia] representing with all of the many others are living a hand-to-mouth the sailing- sector. We also have existence in the context of projects. Germany, , the and core stakeholders With this schism of activity between the US represented on the board. We this elite tier and the rest, we thought the have tried to differentiate between ages affecting our obvious subjects for the Industrialists and gender too [the remainder of the section of our New Build issue were current board comprises Vincenzo industry.” the senior representatives for the body Poerio, Benetti; Michelle Jones, Delta that represents the market’s strongest Marine; and Jan Bart Verkuyl, Feadship] performers. and we have our next board elections in Since its inception in 2007, SYBAss September. (Superyacht Builders Association) has The founding members were Fead- swelled its ranks to 22 members (Bilgin ship, Benetti and Lürssen, and then having joined days before this Perini, with initial discussions in 2006, interview took place) and these are the followed by 16 other shipyards. And then true nucleus of new-build activity. the organisation was formally founded Representing builders of yachts over in February 2007, with elections in 40m LOA, the SYBAss roster is, in September of that year. essence, a list of the world’s most prolific and longstanding yacht builders. While What is the organisation’s modus there are a few candidates who could – operandi? but have yet to – join its ranks, we felt MB: One of the main reasons for the it only apt that for this issue we should birth of the organisation was that we meet the organisation’s president were caught with our pants down Michael Breman and secretary general when it came to the Maritime Labour Theo Hooning. Convention. For an outsider to look at our little market, they’d say, ‘You have I think the best place to start is with people regulating your market and you the composition of the organisation, don’t know about it?’ But we didn’t! That its purpose and your respective roles was the catalyst to say ‘never again’. And within it. out of this evolved the fact we now have a TH: Michael is the president of the say with those that regulate our market. association and, with the secretary A wishful next step is more than just a general, we act as the first actors in say – it’s influence. But right now, we topics relevant to the association. We are heard and we have observer status at have been doing this together for 12 years the IMO, so we can sit at the table from and that has created a strong situation; the beginning. And slowly but surely, I have never had to question Michael’s thanks to the personalities of those

16 Total LOA delivered in past five years (40m+)

48% 52%

SYBAss RoW

involved, we have become part of that the one is good for the collective. We Michael was the first to see our market family, with the fruits becoming more sit in working groups with technical was shrinking and he felt we needed apparent over time. So our core mission representatives from our shipyards, to reach out to the consumer. To cut a is to ensure we have a relationship with working together and negotiating on long story short, that was the start of all of the core stakeholders affecting our topics. These discussions are protracted the Superyacht Life Foundation [an industry. over many, many months to work out initiative now with many trustees in TH: With common goals, we are more what is a fair outcome for all. We have superyacht sectors beyond new build effective and that was something that achieved many [of the] things we wanted that promotes the superyachting was missing from this industry. to achieve, but not everything. Perhaps experience to new spheres]. this is because some are idealistic in Under ‘professionalism’ we deve- While, ostensibly, you are an associa- commercial terms, but let’s see what the loped a keen interest in sustainability tion of builders, do you think you future brings. issues, which is essential if we want to now represent the industry because be seen as an industry. This became the of the rate of your progress when Are there any initiatives, current or Water Revolution Foundation [a non- compared to other industry bodies? upcoming, that you want readers to profit, scientific foundation promoting MB: We tend to stay away from things be aware of? sustainability within , co- within the bigger picture that don’t TH: SYBAss started as a B2B [business- founded by The Superyacht Group’s concern us. We try to have a dialogue to-business] activity, with promotion, Martin Redmayne]. So now we have with other stakeholders, such as regulation and professionalism being what I see as three pillars: business-to- brokers or regulators. We sit together our core [pillars]. We undertake work business, business-to-consumer and regularly to see where there is room for that shows our impact on the maritime business-to-society. improvement. One of the issues I have industry or the economy at large. when discussing matters with the board We have an economic impact study So on to the market itself and your is that what is good for the collective is finalised, produced in conjunction with views on its health. We believe a two- good for the one, and what is good for VU University in Amsterdam. In 2011, tier market has been formed, with

18 Source superyachtnews.com/yachts

40m+ deliveries since 2014

Deliveries

50

43 40 40 37 37 35 31 30 30 27 26 29

20

10

0 2014 2015 2016 2017 2018

SYBAss ROW

your members constituting the That’s tricky because the new-build limits you with the number of shipyards nucleus of the top tier. If we focus market has contracted significantly. you can accept. on your market parameters (40m+), If we take ‘consistency’ to be the MB: There are yards that are eligible the market is self-sustaining and very delivery of one project per annum but are not members. It’s a pity because profitable – for a handful of builders. for each of the past five years, there the things we manage to achieve in the MB: ‘Very profitable’ is a loose term; are only 10 shipyards worldwide that field of regulation apply to everybody, it is a ‘continuing business’. Like most we can truly class as consistent – and even if they aren’t members. This is a brokers, the difference between a good nine are SYBAss members [Abeking club where you should be a member. year and a bad year for most shipyards & Rasmussen, Amels, Baglietto, Ben- TH: It’s strange because if you have is one boat. The risk taken by our mem- etti, Feadship, Heesen, Lürssen, Ocean- delivered 12 yachts but are not a member, bers, and anyone that undertakes this co and Sanlorenzo; the only non- you are reaping the benefits without work, is quite substantial. We like to say member is Sunseeker]. There is diver- contributing. But I do hope that we will that at any given time we are responsible sity of representation, but there is attract more countries – China, perhaps for around half of all activity. The other also representation of the true state – to support the notion that we are truly half is done by as many shipyards as of the market and the truth is that international. there are units. That’s a pretty scary we are an incredibly niche market. picture of the market. TH: And they are all in the eurozone. But that’s reliant on them meeting TH: The core of the market is within It has become a superpower in this your parameters, which isn’t guar- SYBAss. Even greater concentration still industry and that is detrimental to a truly anteed. We’re actually seeing less could help to bring even greater stability global association. So are we a global diversity as our industry grows, to the market. In terms of what we association or a European association? which is ironic because it seems in represent, you can go two ways; you can We have two parameters of acceptance contravention of the most basic rules have a very exclusive club – but then you – four deliveries within 10 years and the of economics. are not really representative anymore – company [continually trading] for the MB: That is because you are trying or you try to be globally representative. same time period. This immediately to apply ‘real-world’ economic rules

The Superyacht New Build Report ISSUE 192 19 Source superyachtnews.com/yachts

SYBAss total LOA in-build and launched projects SYBAss total LOA in-build and launched projects

LOA (m) LOA (m)

1,600 1,600 90 1,447 1,400 1,400

1,200 1,200 1,057

1,000 231 1,000 856

800 800 662 342 600 600 475 407 191 400 167 400 266 275 330 241 203 213 255 109 200 129 200 85 53 90 50 64 0 0 0 Abeking & Amels Baglietto Benetti Bilgin Burger Columbus CRN Delta Feadship Heesen Horizon ISA Lürssen Oceanco Perini Navi Royal Sanlorenzo Silver Yachts Turquoise Vitters VSY Rasmussen Yachts Yachts Marine International Huisman Yachts Viareggio Shipyards Superyachts Ancona S.R.L. In build Launched In build Launched

SYBAss members total deliveries in past five years SYBAss members total deliveries in past five years

Deliveries Deliveries

40 38 40

30 30

20 19 20 17 16

11 11 10 10 7 7 5 5 5 5 5 3 3 2 2 2 1 1 0 0 0 0 Abeking & Amels Baglietto Benetti Bilgin Burger Columbus CRN Delta Feadship Heesen Horizon ISA Lürssen Oceanco Perini Navi Royal Sanlorenzo Silver Yachts Turquoise Vitters VSY Rasmussen Yachts Yachts Marine International Huisman Yachts Viareggio Shipyards Superyachts Ancona S.R.L.

20 The Superyacht New Build Report ISSUE 192 21 “With the growing size of the VISITVISIT PALMAPALMA boats, I worry we could price ourselves out of our own market. If our yachts become too expensive, our clients will find other things in the world instead.”

to something that exists outside that to create campaigns that highlight the world. Yes, it is a very niche business, attributes of yachting and to change DISCOVERDISCOVER YACHTINGYACHTING but bear in mind [that] half the world’s the myths published in the mainstream production is still undertaken by many, press about it, which means many many shipyards that are at that moment people don’t dare venture into our world in time engaged in activity. So in that for fear of being labelled as some kind sense, the situation is not as dramatic of crook! as you make out. The thing that worries me, and has for a long time, is the flat- But there are elements of the con- line of market activity. We continue to struction process – change orders, build the same number of boats each delivery times, premiums on equip- year. Some companies have expanded ment – that are internal matters for but if you look at the numbers there is the industry to discuss and address. no upward trend. TH: We are not in the business of With the growing size of the boats enhancing the quality of the individual too, I worry we could price ourselves out products because that is competition and of our own market. If our yachts become that is down to each of our members’ too expensive, our clients will find other businesses. things in the world instead. That is MB: Of the nine you mention, they are ENJOYENJOY LIFELIFE why we must undertake these outreach all clearly very different products. programmes to increase the propensity Clients will rank them based on their [by wealthy people] to buy yachts. own subjective interpretation of ‘quality’. What makes a yacht? The But does that line need to spike? look, the quality, the excessive engine Perhaps what we are looking at is room … or how you live it? The defini- the true state of the superyacht new- tion of a yacht is ‘a vessel intended for build market – one that sustains only pleasure’. 27th April – 1st May 2019 · Moll Vell, Palma de Mallorca the finest purveyors of quality in every sector. Well, there it is. Categorising a yacht MB: The barriers to entry are certainly is very arbitrary. Our company does now quite high. The temptation to enter it using a 30m size LOA threshold Large the market goes hand in hand with because that gives us some para- pricing, and after one or two yachts, they meters for our subject matter, where- Refit area& Repair may realise it is not a good business and as pleasure is harder to define. move on to something else. We need to MB: Personally, I am reinserting into my & find ways to attract more clients and lexicon that the product we construct is pricing is certainly an issue. a luxury yacht. The difference between Ulysses [now Andromeda] and Northern Is that the sort of issue you discuss Star is how well appointed the two are. within SYBAss? Without knocking either one, they fulfil MB: Superyacht Life has been set up their purpose – which is for their own- Follow us on: precisely to be that sort of ‘lobbyist’ – ers to enjoy yachting.

The Superyacht New Build Report ISSUE 192 23 www.palmasuperyachtshow.com www.boatshowpalma.com “It is my assumption that the increase in wealthy individuals through inheritance will outstrip new wealth. Therefore, I think the growth sector will be 60-80m, which is still a seriously large boat.”

TH: If you broaden your definition of a sounding cocky, but I do feel it is a very To conclude, both from your own luxury yacht, you attract more clients. small market. personal points of view and the If you can do that, perhaps we as an If you’re a very rich person and you SYBAss party line, what is your out- industry [will] get out of the situation have 1.5 billion, you like yachting and look for the industry as a whole over we find ourselves in. you decide to buy a boat. You spend 200 the next one to one-and-a-half build MB: It’s a question of how we’re going million on it and use it, but after a few cycles? to do that because otherwise we’re all years you take a step back and decide TH: What I’ve learned is that our swimming in the same bathwater. to pass on half a billion to each of your health is reliant on stability. Political two children. Now, 500 million is a lot instability is not good for this industry Talking of that bathwater, how do you of money, but even if they like yachting and that remains a question mark at see the SYBAss market share evolving? they are more likely to buy a yacht for this moment. If you look at the strength TH: We see it increasing. Fewer yards 75 million. It is my assumption that the of the major economies at this moment, are building more yachts and they are increase in wealthy individuals through there is little to worry about, but the big members. The volume of vessels is inheritance will outstrip new wealth. question mark is global instability. getting bigger and that type of builder Therefore, I think the growth sector will MB: Uncertainty is the death of is a SYBAss builder. The sector we are be 60-80m, which is still a seriously major transactions. Look at your own worried about, however, is the sailing- large boat. decisions; envisaging things will be yacht sector. When I started in this good in two to three years makes you industry, 20 per cent of 40m-plus Absolutely. And equally, what are think, ‘What the hell, I'll take the vessels were sailing yachts. Now it’s your thoughts on the discourse plunge’. I don’t think there’s a sane seven per cent, and still going down. about yachts going ever further person on the planet who thinks the afield, as if there is some mythical next three years are going to be stable. And what about the anecdotal evi- exodus from the Med taking place? There may be a self-denial hypothesis, dence that yachts are getting expo- MB: It’s rubbish. Boats have been doing where two negatives cancel each other nentially bigger? Personally, I think it forever, but perhaps this discourse out, but in the meantime there is a that’s a falsehood. has been inspired by a certain ‘look’ that feeling that something is not right. And MB: It’s my personal opinion that has emerged. Octopus was delivered in it is being exacerbated every day; it is a building large boats – 120m and upwards 2003, so this is nothing new. A yacht permanent source of uncertainty. – is an occasional occurrence. It’s not doesn’t need to look like an explorer to But whereas in the past we were a real business. [Lürssen] happens to go all over the world; most boats built reactive, we are now at the table and we be suited to it and people come to us by SYBAss members can do just that. are proactive. There is nobody to blame because we have done it, so it may look Look at Gene Machine, for example. and while things are not always good, like an attractive business, but I don’t The operational profile of that vessel is we are in control of our future. It is think the volume [of business] is there. I incredible. That is yachting to the max, an accrued benefit that cannot be don’t want that to be misinterpreted as and that is fantastic. stressed enough. WM

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