Gulf Craft scales back small-boat manufacturing
By IBI Magazine
Gulf Craft said earlier this week that it has scaled down its operations because of slow retail demand of boats. The company also said during a press conference at the Dubai International Boat Show (DIBS) that it has postponed plans to go public because of volatility in the market. "It's not the right time and I don't see it happening in 2010 and 2011," Erwin Bamps, chief operating officer, told the press. Nasser Alshaali, CEO of Gulf Craft, said yacht prices are under pressure because of lower demand and higher supply. He said that the secondary market was particularly impacted after companies in the US and Australia declared bankruptcy and dumped boats in the market. "But Gulf Craft managed to adjust itself because we make a customised yacht," Alshaali said. Alshaali also said that the growth of the boating industry in the Gulf region has been hampered by high inflation and rising costs of labor. He said regional governments have been focused on service sectors rather than manufacturing. A change of labour policy could have a positive effect on domestic manufacturing. "Manufacturing is becoming difficult and fixed-costs like land and labour are going up," said Alshaali. "Claims that this region offers low-cost labour are no longer right." Alshaali said Gulf Craft is looking to widen its distribution in Africa and East Asia, where he sees potential for growth. During the press conference, which marked the launch of Gulf Craft's new 125-ft. superyacht, Bamps said that while small-boat production has been curtailed, its yacht business has remained largely intact.
(12 March 2010)
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