“Refit has become a trendy word,” Alberto Perrone Da Zara says from Bremen. Lürssen’s director of yacht service is the man tasked with organising the shipyard’s refit offering. “It’s a sector doing incredibly well post crisis. I’ve identified a hit list of one hundred 65 metre-plus yachts younger than 15 years old that would justify coming to Germany.” [We have also attempted to identify these yachts, below.] Yet although the opportunities in the 60 metre-plus market are plentiful and demand outstrips the offering, there’s evidence to suggest that growth is not across the board. “We’ve seen the market slow down for yachts of less than 35 metres, and for yachts of below 27 metres the market does not really exist,” says Monaco Marine’s François Vila.
The ageing fleet has contributed to a host of new players entering the refit sector. Established shipyards are wary of these new independent operators. Alberto Amico of Amico & Co observes: “Even though demand has increased and will continue to do so as the fleet ages, a major chunk of works are performed outside proper refit shipyards, due to the influx of ‘new operators’ — one man companies, technical managers, new build shipyards or converted commercial ship repair shipyards, either in crisis or simply trying to do more business — in the refit sector.”
Where is the market headed?
There is a spike in 30 metre-plus yachts launched up to nearly ten years ago that will be due for their class surveys — 243 in 2007 and 256 in 2008. This bodes well for the refit market. For yachts due for their five-year survey the numbers drop in response to the financial crisis, but are still healthy with 190 launched in 2011 and 195 in 2012. Boat International’s own stats reveal that the past 12 months, compared to the previous 12, the refit market has grown at least 14 per cent. Monaco Marine’s Vila says, “We expect, thanks to the number of superyachts under construction for 2018, growth will continue at least to 2019.”
For the refit shipyards based on the east coast of the US, charter guests put off by recent extreme weather could have an impact on future growth. “Based on our current pipeline, we expect to see increases over the prior year for each of the remaining months in 2017. We are not sure if the impact from Irma will affect 2018 based on vessels’ Caribbean travel plans,” remarks Lauderdale Marine Center’s Doug West.
The changing face of refit
Amico says the sector as a whole has matured. “For larger yachts and bigger refit projects, most clients are now organised with qualified consultants and project managers and as a result, the design and bidding process is better managed. Clients pay more attention to the key criteria for choosing a yard: reliability, quality and technical capability. We are also more often asked for the customisation of yachts, such as the creation of new superyacht beach clubs, and for the upgrading of systems due to changes in rules and regs.”
Better onboard planning and increased professionalism has been an advantage to this maturing sector. Compositeworks' La Rochelle shipyard director, Stéphane Marcelli, has noticed more ex-merchant navy crew on board superyachts, adding, “This is positive for us as they do a great deal of preparation for the refit in advance. We’re then able to organise logistics as far in ahead as possible. It saves us and the client time and money.”
Advances in yacht design will be another boon for the sector. Compositeworks' Rob Papworth predicts, “Major modifications will be more common due to the capacity problems with quality new build yards. Modern design trends are attracting existing owners who are happy with their current yacht but would like to benefit from current trends of more seamless integrated exterior and interior spaces.”
Areas of strength
The strongest European refit hubs are found in the Western Mediterranean, spread from Barcelona to the South of France, Genoa and also Mallorca. In the US, Fort Lauderdale accounts for the most activity with yachts stopping before or after FLIBS and using time in between charters to make repairs. In Holland and Germany new build yards are becoming active, although they have yet to gain the traction of the established refit yards and require larger jobs to make the journey time and fuel spend worthwhile.
In order to become a successful destination for refit a yard needs to be close to an attractive town for the crew, easily accessible for suppliers and have a network of sub-contractors in striking distance. Meanwhile, shipyard facilities must be strong from lifting capacity to hardstanding, dry dockage and covered halls. Working in regions known for commercial ship repair is an added advantage. Alberto Amico was concise in his list of successful hubs: “Genoa is an important area for ship repair and Tuscany is home to about 70 per cent of the Italian superyacht industry. Barcelona and La Ciotat are our biggest competitors. At La Ciotat, the co-operation between public companies, sub-contractors and shipyards has proved very successful.”
The recent news that MB92 has acquired a majority share in Compositeworks has made for a powerhouse refit organisation with all bases covered. At present, there are no plans for the management structure of each company to change with both organisations continuing to work according to their own strengths.
Mallorca is popular for sailing superyachts but has less capacity for the largest superyachts whilst Compositeworks’ other site in La Rochelle and Pendennis in the UK make practical refit destinations for yachts that will later cross the Atlantic. Palumbo Group is hoping to make Malta an attractive refit destination but faces challenges with its location in the middle of the Med and the import and export fees. At present the three largest hubs are in a strong position, but in future the need for ever larger refit facilities and greater lifting capacity for the 80 metre-plus sector will represent opportunity for the German and Dutch yards as well as yards able to combine with the commercial sector.