Remy Millott, CEO of GYG, explores how the growing size of the superyacht fleet will impact the refit and application sectors.
I’ve just returned from two fascinating days in Barcelona at our global sales conference debating the main factors that will influence the superyacht paint market over the next three to five years. As we come towards the end of a very busy refit period it’s the ideal time to take stock and reset our plans. At the conference, we reviewed performance, studied market intelligence and discussed the issues with our management team as well as hearing from some of our most valued partners. I never cease to be inspired by the passion and energy of our team.
One of the major topics was how the recent trend towards larger yachts will influence refit. The analysis of our market intelligence, in terms of yachts delivered over the past five years and
the order book of the major new-build yards, shows both the 70-90m and 90m+ segments have higher growth than the sub-70m segments. Today, there are 163 yachts in the 70-90m segment and 77 yachts over 90m. This correlates with our own history; 10 years ago, the average size of the yachts we painted was 54m, now it is 78m.
Although it’s encouraging to see positive figures and healthy order books, this does have some significant implications for the refit market. Bigger yachts require bigger refit facilities, more specialist infrastructure and companies capable of undertaking these huge projects. That’s before you start to consider the requirements of the largest designs such as Azzam, A and Eclipse.
Expanding shipyard infrastructure requires long-term planning and major investment. Fortunately, leading yards are reacting to this growth. MB92 Group will commission its new 4,800-tonne ship-lift in Barcelona in time for the 2019/20 season, enabling it to significantly increase capacity in the 70-90m segment and freeing up capacity in their dry dock for 90m+ yachts. La Ciotat Shipyards will break ground on a similar 4,000-tonne ship-lift later this year to supplement its existing 2,000-tonne ship-lift and the 200m dry-dock facility.
In Palma, STP has introduced a 1,000-tonne travel-lift, the largest in Europe, enabling it to lift yachts up to 70m, leaving the in-water berths available for 70-90m yachts. Astilleros de Mallorca is planning to relocate its major facility to the Muelle Viejo, and this will see more large yacht facilities come on stream in Palma. Meanwhile, we have experienced an upturn in refit activity in Navantia and other mixed use shipyards.
Many large yachts prefer to return to the Northern European yards where they were built for major refits, partly due to the lack of large dry-docking capacity in the Mediterranean. This, together with growing new-build order books, requires that the major New Build yards expand their refit facilities. Last month, Feadship opened its new facility in Amsterdam which will support expansion in its New Build and refit operations. We have also seen Oceanco and Royal Huisman expanding their refit facilities, while in Germany Lürssen recently bought Blohm&Voss, and Nobiskrug adjusted its operations to facilitate larger refit projects.
We see a similar picture in the USA with Rybovich making substantial investments to accommodate the growth in the 50-70m sector and Derecktor’s recent announcement in Fort Pierce. Savannah Yacht Center’s multi-million-dollar investment will come fully on stream in Q3 with a new ship-lift facility to handle multiple yachts up to 80m. This, alongside the 140m graving dock and in-water berths, will make Savannah the largest dedicated superyacht facility in the USA.
My colleagues and I have been debating how these developments will affect the paint market and what the opportunities are for Pinmar. Size has always been a determinate factor in where yachts choose to refit but this will become even more important as the available capacity of the infrastructure regains a balance with the requirements of the fleet. Time and risk factors also gain more prominence for yachts over 70m with decision-makers looking for suppliers who have the capacity, capability and experience to deliver.
The implications for the paint market are significant and the trend towards larger yachts will lead to a more marked market segmentation. The servicing of the sub-50m fleet will become more commoditised and local and the 50-70m fleet will continue to enjoy a relatively unrestricted choice of locations so quality, value and convenience will be important. The fast growing 70-90m sector will gravitate towards yards with the most efficient and available infrastructure, working with approved paint contractors that can deliver on time with a budget backed by the reassurance of global warranty.
The 90m+ segment requires specialised facilities and will remain the exclusive domain of a select few paint companies that can manage the risk of multiple-million-euro projects. Pinmar, as the largest operator in the sector, with more experience in repainting yachts over 70m than another other applicator, is well positioned for the future.