At a recent US-based conference of International Marine Industry Associations, delegates from 27 countries attending heard that there had been an overall decrease in the global marine market of 50% as a result of the financial meltdown.
Holding some 45% of the global marine market, the US is a bell weather as to the state of the sector overall. This fact was amplified by the Brunswick Corporation, whose annual turnover of US$4.5 billion is four times that of the whole of the New Zealand marine sector put together; they report turnover falling by 50% from 2007 – 2009. Such a seismic hit has seen companies rationalising, closing or merging as they fight to stay above water.
Staying with the US, *Analyst Tim Conder of Wells Fargo predicts a best-case scenario of peak cyclical marine industry retail demand is now in 2014/2015.
He writes: 'Given that (1) Retail credit availability/affordability has only modestly improved YTD, (2) Weakening U.S. consumer confidence/broad retail trends, (3) Uncertain sustainability of European demand coupled w/ adverse FX, (4) Impact that expiring Bush tax cuts/Obamacare taxes will have on demand for 35'+ boats ($250K+ income customer), and (5) Gulf oil spill, we believe a best case scenario of peak cyclical industry retail demand is now in 2014/2015 and ~ 180-200K units.'
Conder predicts 2010 will be down 10 to 15% with 10% annual growth in 2011-15. (* taken from Marine Business World bulletin, July 2010)
More generally speaking, current estimates are that it may take 10-20 years to recover the business volumes seen in 2007.
One glimmer of potentially good news is that marine business turnover in the first quarter of this year in the US remained steady – that is, there were no further falls. Some companies, such as Evinrude, reported seeing early signs of recovery translated into increasing numbers of units sold, and this cannot come too soon for many of us.
Indications of a positive return in Northern Europe have been overshadowed by concerns about the Mediterranean economies and international debt levels.
Boat Show operators have reported that exhibitor numbers are slowly increasing (up 5% on previous year) as buyer interest returns.
FOCUS ON NZ
More locally, it was a sad fact that, prior to September 2009, there had been no new superyacht orders placed in NZ for some 14 months, although of course existing orders had progressed through to launch.
The good news is that in the last 10 months, 10 new orders have been taken. Throughout the recession, the only sector that has held a steady course is Refits, and it is singular in being the only trade group whose projections show ongoing increases, rising from the current $150m p.a. to $450m p.a. by 2020. It is an inescapable fact that the world superyacht fleet continues to grow and many owners have elected to spend money on protecting existing assets rather than sinking conspicuous funds into new build projects.
Auckland continues to grapple with its waterfront development plans, with a planned spend of over $560m in the next 20 years ($100m by Sep 2011 and the advent of the Rugby World Cup). These are key components in an overall budget of $3.5 billion.
Within these plans there is a strong focus on augmenting the facilities for visiting superyachts, whether here for refit and upgrade work or simply to spend time in NZ waters. It is estimated that the average refit spend with NZ marine operators is $6m per boat, with an additional discretionary $1m anticipated from non-marine industry spending on flights, hotel accommodation, recreation, entertaining, etc. as the owner and crew may spend many months here – and they have high expectations!
Auckland will be creating new berthage for very large superyachts to address the current shortage.
Adjustments have been made to the plans for the new Yard 37 development in the Auckland Upper Harbour (see earlier article below), with an improved 1,000 tonne ship lift and reduced costs of property. A decision is expected from Auckland Council by September 2010 on the initial consent applications now under consideration, but there is general approval for the updated thinking and a genuine push to realise these important improvements to the sector capabilities.
A shortage of berthage and dock space saw superyachts heading south to Lyttelton on South Island, where the dry dock at Stark Bros. can accommodate ships of up to 130m / 6,000 tonnes. More usually the home of large commercial vessels, three superyachts have taken advantage already this year, having been fortunate to grab empty timeslots in a calendar which has bookings stretching out to 2018!
On the water, NZ maritime authorities have proactively been reviewing ways to ensure that superyachts have their visits here made as straightforward as possible, with the launch of revised pilotage requirements for non-SOLAS foreign-flagged vessels carrying fewer than 12 passengers. Once respective skippers have secured the appropriate authorisation from the Harbour Master, visiting vessels will able to move around the coastline much more easily, without the need for expensive pilots to attend every vessel movement.
We have recently seen the launch of the latest expedition superyacht from McMullen & Wing, the 45m 'Big Fish', currently undergoing final fit-out before hand-over to its proud new owner in June.
A vessel offering many revolutionary features, such as fold down 'beach decks' at the stern and stone incorporated into the decking, she also has huge range, being able to remain at sea for up to three months at a time, thanks to fuel tanks with a goggling 95,000 litre capacity.
There are ambitious plans for her, many of them 'firsts', which include voyages to both the Polar regions and a jaunt through the North West Passage.
In the meantime, finishing touches are now being made to her in The Viaduct in central Auckland.
On launch day, McMullen & Wing signed up the next vessel, which is a scaled-up 50m version of 'Big Fish'. Can't wait!
Congratulations to both NZ Yachting Developments and Alloy Yachts who recently scooped international superyacht design awards.
'Bristolian' (designed by Philippe Briande and built in Hobsonville by Yachting Developments) was the largest composite yacht to be constructed in New Zealand, at 36.7m and displacing 145 tonnes. A stunning design, she bristles with the latest technology, although it was actually her superb interior which won the award in the 24-40m category.
'Bristolian' sports a rig built by Auckland's Southern Spars, who also equipped other finalist vessels including: 'Liara' (PY-100 from Southern Ocean Marine of Tauranga, LOA: 30m and displacing 70.6 tonnes); 'Immocean' (Ed Dubois design built by Fitzroy Yachts of New Plymouth, LOA: 41m and displacing 151 tonnes); 'Mondango' (see below).
Alloy Yachts added to their very extensive trophy cabinet for both sailing and motor yachts, thus continuing their amazing track record of 24 award-winning builds in 24 years. 'Mondango' was designed by Dubois Naval Architects and measures almost 52m with a displacement of 452 tonnes.
'Allogante' (LOA: 40m, Displacement: 252 tonnes, powered by twin Cat C32 1,400hp engines) and also from Dubois won in the 24-40m motoryacht category.
New Zealand has also made a first-time entry in the Refit category of the superyacht awards for the extensive works carried out over a six months period aboard 'Shanandoah of Sark' (54m, three-masted, gaff rigged schooner) by Orams Marine Services, who co-ordinated a team of local experts to take care of the many and various tasks on this traditional vessel, which presented some special challenges. The winner will be announced at a gala event to be held in London in May 2010.
The NZ refit sector is singular in that it has weathered the global recession well with ongoing growth, as owners switched spending from new vessels to maintaining and upgrading those they already owned. Forecasts are for this sector alone to be worth over $400m turnover p.a. by 2020, which is more than double the current trading levels.
NZ Yachting Developments have recently started a 16-month refit of the historic J-Class 'Endeavour'. Built to contest the 1934 Americas Cup for the legendary Sir Tommy Sopwith, she measures in at 134' and is considered one of the all-time greats. Boating New Zealand reported that she is to receive new decks, main engine and generators; reconfigured crew quarters; a new carbon fibre mast, sails, deck gear and sail-handling equipment, as well as complete onboard systems upgrades - and a full repaint.
It is reported that in Q4 2009, NZ superyacht builders have received five new build commissions, which augers well for steering a course out of the doldrums and rebuilding a sector which has been badly hit by a downturn across the board.
Mark Wightman, Chairman of NZ Marine commented: "The ever-growing list of awards achieved by so many New Zealand-built yachts sends an important message that our industry is in great shape and is here for the long haul".
(Information sourced from MIA News - Summer 2010, published by the Marine Industry Association of New Zealand and Boating New Zealand March 2010)
Here are a couple of impressions of the proposed redevelopment of the Wynyard Quarter zone of the Auckland waterfront, just minutes from the CBD.
Sitting adjacent to the Westhaven Marina, this exciting proposal will take many years to be accomplished, one of the first tasks being to remove the existing fuel bunkers... but work is slowly gathering momentum as land is acquired and set aside and the necessary consents obtained.
Latest plans indicate a sensible mix of residential and commercial interests, and just this week (March 2010) ASB Bank has confirmed that this new development will be home to its NZ Head Office.
From our point of view, the most important aspect is that, thanks to strong lobbying from the MIA and marine sector, it is now confirmed that there will continue to be a strong marine 'footprint' in the locality, which will create a facility where some of the world's best marine companies can continue to serve their customers within walking distance of Auckland's CBD.
Also recently announced were plans to create what has been dubbed 'Party Central' in readiness for the forthcoming Rugby World Cup. A former city centre terminal, Queens Wharf, has been acquired and will be redeveloped to host a major venue for up to 20,000 fans to celebrate the World Cup, and is just a few minutes walk away from Westhaven/Wynyard and the Viaduct.
The debate over an appropriate architectural design to live on after the World Cup continues.
The waterside is receiving much attention, giving Auckland the oppor-tunity to create a world-class harbourside environment with unique characteristics, and augers well for the ongoing development of the marine sector.
On August 26th 2009, the Marine Industry Association hosted a member briefing on the development proposals for the former Hobsonville Seaplane base and military base - now to be known as 'Yard 37' (as we sit on 37 degrees south).
The Waitakere Council has been targeting two sectors - film and marine - which together generate more than a billion dollars a year in earnings for the NZ economy. Their approach is to utilise the key assets of new infrastructure and proximity to key communications links (including deep water access to the harbour), attracting businesses in to create a new economic hub, which will also be able to provide homes for the thousands of workers and their families drawn to the new development.
Key factors which have limited expansion before have been shortages of labour and shed space: this new development offers flat land, great road infrastructure (with new motorway links) and all-important deep water access to the inner Waitemata Harbour, which is a unique combination.
With over 33 hectares of land set aside for the new marine precinct itself and a further 160 ha for housing, the proposed facilities should make it a proposition for superyacht manufacture and support without a direct rival anywhere in the world.
A phased approach will first see establishment of a ramp and travel lift facilities to 225t, later to be increased to 1,000t with the addition of a synchrolift and trolley system. There will be a range of industrial units, some of which may be up to 18m high, available to cater for new build and refit operations (some 82,000 sq.m overall for marine sheds including a 12,000 sq.m paint shed), as well as the complementary commercial and retail businesses necessary to support this community and the 2,000 or so employees it will accommodate.
Environmental compliance is very high on the agenda, and systems will be in place to meet the most stringent of requirements, with all work being performed within the confines of the buildings themselves and contaminants therefore contained and managed effectively.
The only limiting factor will be the Auckland Harbour Bridge, limiting passage of superyachts with masts over about 40m high, and so a symbiotic partnership with Wynyard-/Westhaven-based operators is vital to ensure a comprehensive and complimentary range of services both on the water and on the hard.
Developers are now taking up expressions of interest from marine businesses with development scheduled to progress in 2010/11, but overall Yard 37 is now on 'go' status.
Apparently not for the owner of 'Ulysses', a magnificent expedition vessel which graces the Viaduct Harbour of Auckland on a regular basis.
(Based on material published by the NZ Ministry of Economic Development)
'Solving unique problems, or just coming up with a unique way of doing something has given New Zealand a manufacturing sector that involves more than 20,000 companies and employs a quarter of a million people.
Around 14,000 of these enterprises employ fewer than five people; NZ manufacturers rely less on scale, than they do on being more canny in business, innovative in the way they work, quicker on their feet. Better ways of doing things'
The marine sector comprises of more than 1,300 companies and 10,000 jobs, including over 700 apprentices currently completing trade studies of between 3-5 years. This is impressive, given that the number has grown by some 40% over the last three years and 12% in the last year. In spite of the recession, turnover is still forecast to double by 2020 to more than three billion dollars.
Almost half the population is associated in some way with boating and nearly a third fish recreationally. Best estimates indicate that there are 300,000 boats in NZ, with an average of 5,000 new ones sold every year, 80% of which are manufactured locally.
Kiwi employers will often expect more of their staff than similar businesses in other countries. The ability to turn your hand to a wide range of duties and to 'think outside the square' are rightly valued as being central to the 'can do' attitude to life and work in New Zealand. The NZ brand of boat building is synonymous with achievement, flexibility, technology and innovation.
Nowhere is this better exemplified than when Bill Hamilton emerged from his shed in Irishman's Creek in 1954 with the first Hamilton Waterjet engine, to go blasting up the McKenzie Country rivers. Today, the company he founded employs around 300 people in Christchurch, and their jet propulsion units are found in craft all over the world.
Marine manufacturing and support is something New Zealand can be truly proud of, and you might say that Kiwi DNA has salt water in it!
The waterside is receiving much attention, giving Auckland the oppor-tunity to create a world-class harbourside environment with unique characteristics, and augers well for the ongoing development of the marine sector. 
Apparently not for the owner of 'Ulysses', a magnificent expedition vessel which graces the Viaduct Harbour of Auckland on a regular basis.
