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

NT News - Motoring - - MARINE GUIDE -

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

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