FINANCIAL MAIL ONLINE: YACHTS THE TIDE IS COMING IN

21 Oct 2014

THERE is an undercurrent of optimism rippling through the SA luxury yacht sector. Things are beginning to look better after almost six years in the doldrums following the 2008 financial meltdown.

Last week the International Boat Show & Exhibition in Cape Town had some of the finest and most glittering sail and motor yachts on show. If you had anything between R3,5m and R16m handy, the world was your oyster with cabin cruisers, deep-ocean sailing yachts and a plethora of accessories to choose from.

But never mind the initial investment, you would also have to have the wherewithal to keep up the latest love of your life. This can mean mooring fees (the charge to keep the boat in a marina) ranging from about R1 500/month to more than R16 000.

Then there is the cost of fuel: a motor cruiser, even a relatively small one, has fuel tanks that can easily hold more than 1 800l of diesel. Then there is the cost of servicing and maintaining engines and electronics, repairing equipment, especially sails, and finally making sure she is spick and span. The latter is essential as the yachting and boating fraternity is notorious for being hypercritical of other people’s boats.

So before embarking on that idyllic sunset cruise to Clifton beach with babes in bikinis, beer in coolers and seafood in the galley, the cost of owning one of these luxury boats will set the owner back between R200 000 and R1m/year.

 

Marine Industry Association of SA (Miasa) CEO Vanessa Davidson says the market is definitely looking healthier. "We, along with many other sectors, took a heavy smack after the financial crisis. However, things are looking better. We are not back where we were in the heady days of pre-2008, but things have improved."

According to Miasa figures, annual luxury boat sales in the Western Cape top R1,5bn, and, believe it or not, about 220 multimillion-rand boats are launched in the province every year. Most of these are built by Robertson & Caine, a Western Cape company which is now the second-largest constructor of very expensive catamarans (multihulled yachts) in the world.

Davidson says employment figures in the boat-building sector vary due to the cyclical nature of a boat build. Build time can vary from a week in the case of a production yard to 18 months in a custom build yard. Companies commonly boost their permanent workforce with temporary contract workers, or outsource processes to subcontractors when large-scale projects are awarded. There are about 2600 permanent staff directly employed in boat building and an estimated 3 000 employed in the broader supply chain.

Davidson says government has recognised the importance of luxury yacht building in SA and it is now included in the second Industrial Policy Action Plan. "But there are still many constraints," she says.

These include the fact that SA marinas are overcrowded, relatively expensive and are often in dire need of refurbishment and repair. "It is a bit of a nightmare," she says. "In the smaller harbours, we have to deal with different government departments such as agriculture, forestry & fisheries, which runs them, but it is the department of public works that builds things."

One also has to deal with Transnet as far as the big harbours are concerned and it has its own and very different way of running things, she says.

Former Miasa chairman Bruce Tedder says: "I am always amazed at SA sailors. They are willing to sail in waters as dangerous as these."

In the Cape summer the southeaster can blow almost nonstop and, off Durban, the northwesterly can make life particularly difficult for any fair-weather sailor.

Furthermore, unlike the Mediterranean and the Caribbean, where destination ports are seldom more than 24 hours away, the SA coastline has a notoriously difficult stretch of more than 1000km with nowhere to hide. That is why SA has some of the strictest regulations for offshore skippering, and the training to get the certification is not cheap.

Boating World founder and chairman Derrick Levy says there is an upswell of new money coming into the market. "We are definitely seeing some business from the new black diamond class of people. Not just South Africans, but from the rest of Africa, too," he says.

Levy recently delivered a new Fairline motor yacht worth R22m to an Angolan oil magnate. "It is a fantastic boat with everything they need. Furthermore, the marina in Angola, where it is kept, is way ahead of anything we have in SA."

Levy says the idea behind buying a yacht such as that is for prestige, marketing and knowing they have an asset that is world-class. He showed photographs of the delivery party on board the Angolan millionaire’s yacht in Cape Town harbour. Prominent in several of the photos is a former ANC MP. "I am not sure exactly how he came to be at the party, as I know my client did not know him. But that is the thing with yachts like these, they attract people who know people and they are an excellent social and marketing tool," he says.

A sign of Levy’s optimism for the local market is that he has ordered a R12m motor yacht that will be delivered in November.

When asked if there was a buyer for it, he replied: "There had better be ... there had better be."

http://www.financialmail.co.za/life/2014/10/16/yachts-the-tide-is-coming-in