US move to stay buoyant
For the first time in 40 years, one of Queensland’s premier boat builders is considering the potential for offshore manufacturing, reports NICK NICHOLS
THE US is emerging as the most viable option for Maritimo’s proposed new production base as costs soar in Australia.
The Gold Coast-based luxury boat builder, headed by Bill Barry-cotter, is still considering its options for a new factory in Asia or the US as a spike in production costs over the past two years has weighed heavily on the company’s competitiveness in global markets.
‘‘The problem purely is Australian,’’ Mr BarryCotter said.
The issue was not confined to the strength of the Australian dollar, he said, but it was exacerbated by a surge in material costs and rising power bills.
Mr Barry-cotter said that the cost of powering his factories was being felt at the bottom line for the first time in his 40 years as a boat builder.
Electricity costs, the scourge of Queensland households in recent years, added $8000 to $10,000 to the cost of a boat.
‘‘This is the first time in my career that I am looking at electricity as a major cost,’’ Mr Barry-cotter said.
He said power costs at his Coomera factory had risen from $220,000 more than two years ago— when Maritimo was ramping up production with 480 employees — to $260,000 in the past year with a workforce of just 100.
Price rises were being felt across the board for the marine industry, with increases for engines and components ranging from 9 to 14 per cent and materials between 8 and 10 per cent over the past year.
The cost of transportation also had risen from about $50,000 to $100,000 between Australia and the US, Mr Barry-cotter said.
‘‘There’s going to be a real issue of competitiveness for this country (if this keeps up),’’ he said.
The US, in contrast, was shaping as a strong contender to provide a more efficient production base for Maritimo. Mr Barry-cotter said that while Turkey, Thailand and Taiwan were on the radar, the US was at a significant advantage because of the low wages and the availability of workers who were skilled.
Mr Barry-cotter said that materials were cheaper in the US than they were in Asia in some cases.
Maritimo’s US option has been buoyed by the growth of American boat exports this past year.
According to Maritimo’s US boss David Northrop, the American market was improving for new boats at the expense of used boats — some of which are being dumped in the Australian market and depressing prices here.
The softening US dollar had helped lift export numbers for luxury boats to about 50 per cent of production in the US compared with 10 per cent a few years ago.
Despite the continued ec- onomic gloom around the world, the US posted record new boat sales in June this year, marking a turnaround in sentiment there, Mr Northrop said. ‘‘We are cautiously optimistic,’’ he said.
‘‘We are talking to mul- tiple buyers every single day. It’s not like the good old days, but we are trying to live with the new normal.’’
Europe remained challenging, with Mr Northrop describing the situation as ‘‘just sick’’.
Mr Barry-cotter said that despite the cost pressures, he remained confident Maritimo could improve its operations domestically.
‘‘I’d rather get a lot smarter about what we do,’’ Mr Barry-cotter said.
Maritimo’s strategy for 2012 will be on product improvement as it undertakes a major overhaul of its range, with new models to be launched in 2013.
Mr Barry-cotter said the new styles and layout were designed to meet new expectations from buyers, and build on the company’s reputation for performance.
Maritimo chief executive officer Bill Barry-cotter