Searching for Treasure in Foreign Waters
Yachtbuilding in Asia has changed drastically over the years. Yacht consultant Phil Friedman shares what you need to know to bring home the boat of your dreams.
If you were a yachtsman in the late 1970s or early 80s, you might remember some of the FRP trawler-style cruisers that came out of Asia at the time. Most had teak-laden interiors, some of which looked as though they had been finished with a disc sander. “Stainless” steel that turned out not to be as stainless as expected. There were all manner of odd electrical issues to sort out, made doubly difficult to deal with by manuals printed in a foreign language. And more than a few warranty issues with fittings and equipment of unknown and sometimes dubious origin.
The name of the game was The Price is Right. And while the quality of the product did not live up to standards then set by top-line builders in North America and Europe, the significantly lower first-cost of Asian-built yachts in those days put a lot of yachtsmen into boats in sizes that would otherwise have been well beyond their means.
Over the past five decades, Asian yachtbuilding survived, even thrived, and steadily increased its share of the market (the global economic downturn notwithstanding). Moreover, not just as the result of its highly competitive pricing but also because the Asian yachtbuilding industry consistently improved (on average) the quality of its products, there are now a significant number of Asian builders who offer top-quality yachts at highly competitive prices.
However, before you rush off to buy a ticket on Hong Kong Airlines to cut the deal of a lifetime on the yacht you’ve been dreaming of, there are some important things to understand.
Of course, not all Asian boatyards are the same. Because yachtbuilding has not fully matured as an industry in all parts of the continent, the range of products—from great to substandard—can be pronounced, sometimes dramatically.
A couple of years ago, I oversaw the building of an 80-footer in Kaohsiung, Taiwan. The build ran as, or more smoothly, than any I’ve been involved with. Everyone at the yard—from the general manager to the head of engineering to the in-house project manager to the craftsmen on the shop floor—was skilled, experienced, conscientious and focused on meeting expectations.
Keep in mind, though, that even with the best intentions on both sides of the build contract, problems and disputes can arise, often as the result of misunderstandings—linguistic, cultural or otherwise. In the case of the above-mentioned 80-foot build, everything went so smoothly partly because I prepared for the owner a general specification that incorporated the importer/distributor’s standard spec, plus another 40 pages that set standards and ways to resolve inconsistencies and ambiguities. This helped bridge the language barriers that could arise in the contract. And before everything was signed, the owner, the importer/distributor, the yard and I sat together for hours making sure that when we began the project, it would be from the same page of the same book. It was time well spent that returned major dividends.
But don’t take just my word for it. The other day, I spoke with Steve Forest, a well-known yacht surveyor and build project manager who’s lived and worked in Taiwan for 16 years. Steve has overseen builds for Outer Reef, Horizon Power Cats and numerous other importers and yacht dealers.
Steve was adamant that the single most important factor in a successful Asian yacht build is proper project management. And he emphasized that, in most cases, an additional critical factor was the relationship between the boatyard and the dealer or importer/distributor.
By most recent count, there are more than 200 yacht builders in Asia scattered throughout about a dozen nations. In some areas, segments of the industry are more robust than others, such as those outfits in Taiwan and China. While both nations have made great strides over the last two decades, the shoals of economic downturn in the mid-to-late aughts effectively sent the Chinese yachtbuilding industry back to Start without passing Go. Nevertheless, optimism is strong today in most of the Asian yachtbuilding industry.
John Kung, Deputy General Manager of the Kha Shing yard in Kaohsiung told me recently that despite some economic thinning in the number of industry players, the average size of yachts being built in Taiwan is going up significantly. At Kha Shing, they build their own brand, as well as private label yachts for Hargrave and Offshore, two widely different but popular North American brands.
According to Kung, the main reasons for the strength of Taiwan yachtbuilding are that the current roster of builders in the country are all highly credible and turn out world-quality yachts at competitive pricing. Additionally, he points out that with maturation, the Taiwan yards operating today are very flexible and able to accommodate customization—something that seriously improves their position in the megayacht world market.
Kung’s comments match many of the on-site observations I made during the build I did there a couple of years ago. One thing that blew me away was the depth and strength of supporting manufacturing and auxiliary services available in Kaohsiung—for instance, the impeccable stainless-steel fabrication work that is critical to producing a high-quality yacht. Another was the high level of experience and the long connection to yachtbuilding displayed by the yard’s in-house engineering and project and executive management contingents.
Experience is a thread that runs consistently throughout the Taiwan yachtbuilding industry. Kung is a 17-year veteran of project and production management with 132 builds under his belt from 45- to 125-feet. Jason Kao, general manager of New Ocean Yachts is a naval architect with 31 years of background in yachtbuilding. Both are typical of the current generation of Asian yachtbuilders.
Before moving to New Ocean—which builds the Regency lines for North America and the Whitehaven line primarily for Australia—Kao worked at several yards, including Horizon Yachts, well-known worldwide. He counts nearly 300 yachts under his belt. And if the Regency 65 motoryacht I saw under construction last year at the New Ocean yard is any indication, a vast majority can hold their own against a world standard.
It’s no coincidence that Kao and Kung express a similar view of contemporary yachtbuilding in Taiwan. In Kao’s view, Asian yachtbuilding has passed from its infancy, during which period it did not exhibit much expertise in engineering or design, to its current mature period, when it now handles most of the associated technical work in-house. For both builders, like so many others working in the Asian yachtbuilding industry today, and the industry worldwide, dedication and pride run deep. Justifiably so.
For a brief period, it appeared that a serious piece of Asian yachtbuilding would migrate across the Taiwan Strait to the Chinese provinces of Guangdong and Fujian, where labor was plentiful and costs were still relatively low.
Marlow Yachts was instrumental in building a new facility, the Norseman Shipyard, at Chi Hu in Fujian Province, not far from Xiamen where Nordhavn was being built by Northcoast Marine. Even some well-ensconced Taiwanese yacht builders like Jeff Chen, who also owns New Ocean, had moved production of Hampton and Endurance Yachts to China. Unfortunately, by 2008, there was bad news and good news.
The bad news was that, except for these and a few other strong brands, the downturn of 2008 left many of the fledgling Chinese yacht yards moribund. Indeed, in 2015, when I visited Zhuhai in Guangdong province, China, to evaluate the capabilities and stability of a yachtbuilder, the road along which several yards were arrayed—including IAG, Nisi, and One World—looked very much like a ghost town.
The good news is that yachtbuilding in China is now recovering. And in the typical Chinese manner, yachtbuilders there seem intent on not plodding along through a snail-paced industrial evolution but are making quantum leaps ahead to embrace the latest technologies and techniques, including more eco-friendly approaches to the manufacture of FRP products.
One thing is certain, though—there’s gold in thar’ yards. You only have to know where to look.