Gulf Craft, the region’s biggest yacht builder, expects to have built its first 60 metre-plus superyacht within the next four years.
The company has already delivered two of its 47m Majesty 155 yachts, first launched in 2015, and is currently drawing up plans for a 53m vessel.
But the construction and manufacture of a 60m “mega yacht” means the company will have to adapt its facilities. The physical space required for the construction of 60m boat and the different materials needed to keep a yacht of such a length sturdy, flexible and strong means the firm now needs to enhance, upgrade and extend its manufacturing infrastructure.
Gulf Craft, based in Umm Al Quwain and currently celebrating its 35th year in operation, has four boat yards in the UAE and builds a fleet of craft ranging from 8m up to the 47m Majesty 155 from fibreglass.
“The manufacture of a yacht over 60m in length means it has to be fashioned from steel and aluminium,” says Erwin Bamps, the chief executive of Gulf Craft, speaking at the 2017 Dubai International Boat Show last week. The event provides a global platform for local boat outfits such as Gulf Craft and Jalboot, as well as international manufacturers.
Not only are different materials required for a 60m megayacht,the firm will also need to bring in craftsmen able to work with such products, Mr Bamps says. “It is a totally different skill set working with steel and aluminium compared with fibreglass. We also need a dry docks and new sheds to house the construction. We can just about fit the [53m yacht] in our current sheds but the [60m] boat, no way. That shift in technology, skills and infrastructure is going to need a major investment of probably more than Dh100 million.”
Such a cash injection will see Gulf Craft move to a different league – from a local boat builder to a global player. The company is investigating a partial float to fund its next stage of expansion, it says. An IPO has been mooted many times before but now it seems the company has specific fiscal requirements to take the next step in its evolution. The company’s chairman is particularly interested in allowing the general public to share in Gulf Craft’s growth.
“We have been in the UAE for 35 years and I want to be here for another 35, so the public should share in that stability,” says Mohammed Alshaali. “We are only evaluating the possibility now but I think it may happen this year.
“Currently we sell 70 per cent regionally with the rest overseas but I think this year we will see a 65/35 split because we are now becoming known for producing bigger boats that excites the globe.
“We used to be 30 per cent cheaper than many of our rivals but the world economy means our competitors have slashed costs and we are now probably only 20 per cent more affordable. The low oil price has becalmed the market’s growth but we must be ready for a big increase,” Mr Alshaali.
“The United States is on the horizon for us, which is the biggest boat market in the world and we must be ready for that opportunity.”
While 2016 was a flat year for boat buying in the UAE, Gulf Craft believes it will see 20 per cent sales growth in 2017. The optimism behind the new sales target is based on the concrete evidence of a 40 per cent jump in new berths being delivered in the Dubai Canal, Dubai Harbour and Deira Islands. Dubai and Abu Dhabi have both been slow to create new appropriate berths for larger craft but now the UAE is expecting to see 2,000 berths added over the next two years, with Dubai Harbour and Bulgari Island getting moorings that can take superyachts.
There are currently 5,000 berths offered across the country but they are not generally suitable for vessels more than 30m long.
“2016 was a flat year for sales but we also sold two [47m] superyachts, for US$25 million each, underlining our appeal to the highly affluent,” says Mr Bamps. As well as the Majesty 155, others in the range include the Majesty 110, at 33m in length.
He says the uncertainty caused by geo-political events added to the sales inertia last year but he believes the UAE’s investment in marine infrastructure will kick-start a sales pick up this year. “People don’t buy boats if they cannot berth them where it is convenient or where it is easy to get to,” he says.
“We had seen a polarisation in sales with customers buying at the high and low end but the availability of berths across Dubai will bring the mid-market back into the industry. I predict a 20 per cent increase in sales as people see the berths and lifestyle available to them.”
International yacht builders on the sidelines of this year’s Dubai Boat Show saw the lack of berth space available, and the expense of securing a berth, in the UAE as hampering sales in the country. However, local industry experts see Dubai as comparatively inexpensive and a hub for the global yachting community.
“Dubai and Abu Dhabi’s marina’s offer a prestige service which is a higher quality and lower price than many in the Mediterranean,” says Saeed Hareb, the secretary general of the Dubai Sports Council.
“This year we will see 400 berths come available in Dubai Canal, Dubai Harbour will offer 1,400 berths and Port Rashid 400 berths that will be able to take megayachts of over 80m.
“We are seeing more demand each year for space at the Boat Show, which underlines the increasing interest of the country and the region.”
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