In contrast to the doom and gloom surrounding US building in recent times, the Christensen shipyard appears busy, with Foggia also bidding for six further contracts in the 50m category, at the time of writing. As is well documented, US buyers still exist in their droves; it is just a case of convincing them to build in America.
“Those six [bids] are very, very warm”, Foggia says. “I’ve also got four for the 43m platform, and between us and Ocean Alexander there are another four that are pretty darn warm on the 36m platform. These are contracts that have been narrowed down to us and one or two other yards.” This is a clear indication that contracts are still available for shipyards that can match a client’s profile.
Today’s clients, Foggia says, have identified a set price before they even approach a yard. Their shopping list is not dictated by price, but pedigree. Or in Foggia’s words, “they will decide on a yard based on what they can get for their buck.” Yards are effectively competing on quality, not price. And quality extends to efficiency, a consideration that has led Christensen to enter into long-term agreements with its supply chain. This mutually beneficial relationship provides capital for niche businesses and ensures that the yacht’s constituent parts are readily available, with Christensen amassing a larger than ever on-site inventory.
Foggia’s list of clients – from North America, Latin America and South America (with an additional Chinese client) - highlights an additional challenge US yards are facing: whilst American clients are happy to look further afield, the same cannot be said of European clients and American yards need to find a way of ensnaring their geographical catchment area.
Interestingly however, Foggia feels the problems with the resale market are not impinging on the prospects of the new build market. Like other prominent figures in the US market he feels that those who remain in yachting are there because they are really passionate about the discipline. And in Foggia’s view, this means that they are prepared to commission a new build, knowing that it allows them three to four years to use and offload their current vessel. “They’re tired of their old boat but they still have pride in what they own, compared to what else is out there”, he explains. “And refit is no walk in the park and even after an extensive refit, you’ve still got an old boat and it’s cost you almost as much as a new build.”
Is there a need to push this ‘commission now and enjoy your yacht in the meantime’ mentality? Well yes, and it’s the job of brokers to seize the opportunity says Foggia. “They’ve been doing a really good job and, even though the resale is the quicker buck, the long [established] brokerage houses see the need to get some new product on the market.”
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