By: Dr. Magdy Sadek
Saudi Vision 2030 is a truly amazing undertaking, not just because the Kingdom of Saudi Arabia is actively promoting a more diverse and sustainable economy and committed to reaching net-zero by 2060, said that yacht industry expert Xavier Mercado CEO at Ptw Shipyard™ in an exclusive interview with “Leaders MENA “ magazine.
When I asked about clear competition for the ownership of mega yachts between the Arabs and the Russians and whether he agrees with me or not?
He has said it is true that a high percentage of the world’s most expensive and stunning yachts have Arab or Russian owners, with the Arab world leading the pack in terms of quantity. When I think of yachts such as Lady Moura, Al Mirqab, Serene, Al Said, Radiant, Yas, Dubai, Topaz, and Azzam, it is clear to me that a large number of the world’s most spectacular superyachts and mega yachts have Arab owners.
1-The yacht industry has gone through difficult crises due to the repercussions of Corona, how were those ripple effects?
There is no denying that the Covid-19 pandemic has had a profound effect on the global leisure industry and the superyacht charter industry has been no exception. National and local lockdowns coupled with international travel restrictions resulted in unprecedented cancellations across the entire chartering calendar in both the northern and southern hemispheres and this had a knock-on negative effect for support services and businesses.
To assuage losses scheduled refits, repairs, and annual maintenance works were all revoked and relegated to wishlist status, replaced only with urgent or compulsory tasks, resulting in empty shipyards and idle craftsmen across the globe.
That said, here in Spain, like many other regions, we have now crossed the line in regards to restrictions and the demand for superyacht and megayacht charters has rebounded stronger than before. The mental residue of isolating and maintaining social distance has heightened the appeal of private chartering in and around the Mediterranean, resulting in a large number of superyachts now in need of dusting off and updating for the upcoming season after being sidelined for so long. Maintenance put on the long finger during the pandemic is now past due so shipyards like ptw Shipyard are busy earlier in the season and owners are clamoring to find work slots to fit with their upcoming season.
The current downtime is the ideal window for superyacht refits and repairs as boats are currently not in use but the 2022 season is looking robust for the industry as a whole.
2-What is the number one most pressing issue facing yachts industries today?
Modern sea-going vessels are built in all corners of the globe and come in a wide variety of standards, classes, and regulations and technical guidelines vary in information, language and clarity. For a successful outcome to a project, shipyards teams must be able to master this information as well as put it into practical use. Technical understanding of a superyacht is a skill that requires training, experience, and aptitude but technical know-how alone is not enough to keep a shipyard reputation and bottom line on a Fairwinds course.
When it comes to superyacht and megayacht refit and repairs the individual steps of a project come with their own need for expertise as well as a crucial optimal time slot. Each task needs to be assigned and completed within a specific time to ensure no time or budget is wasted. The workflow of each action must be harmonious within a fluid sequence, not interrupting any other step, knowing what needs a priority and what can wait as well as understanding who does what and when.
With so many irons constantly in the fire, in my opinion, keeping control of a refit project is no mean feat. Delays, miscommunication, incorrect specifications, and poor planning are just some of the catalysts that can cause a quick spiral into overspend and delays. Every action must be thoroughly understood as mistakes are costly and cutting corners is not acceptable. The mammoth task of ensuring teams, subcontractors, and specialists are where they should be at the exact time they are needed, that they stay on course and complete tasks safely, correctly and to quality, the standard is a constant juggling act that shipyards must dominate to maintain our hard-earned reputation.
3-As the industry of repairing ships starts to crawl out from its stump, what are the most important takeaway lessons?
While the shipyard recovery has well and truly begun it is not smooth sailing for many as the demand for work is far greater than the actual work hours available. Shipyards are under extreme pressure to keep up with the demand as what would normally have been a more incremental process of incoming projects, has now resulted in clients competing for the same work hour slots as the industry recovers across large regions.
While no shipyard is complaining about being back in demand, the pressure to complete is weighing heavily on contractors and skilled employees, in addition to an additional burden on the industry to ensure that standards are maintained and safety remains paramount. Every working hour is a valuable commodity and mistakes are not only costly but also time-consuming. Shipyard synergy is more important now than ever and high demand for services is adding to this pressure.
While shipyards have had to hit the ground running, owners and owner crews are scrambling to expedite their superyacht refit and repair processes.
What should normally take months of careful preparation, research and organization are now being squeezed to fit with a limited shipyard slot. The reduced time to cover the key elements of the groundwork for the expensive and involved operation required for any superyacht repairs could easily result in unexpected delays or pivotal projects being missed or overlooked.
Going forward, from my perspective, it would seem more logical and productive for both owners and shipyards to use the downtime more effectively. We all know that the most ideal time to work or upgrade a yacht is when it is not in use; therefore, all downtime should be maximized and availed of, even if the next charter or sea time is not clear. This will ensure that shipyards can offer clients more accommodating yard time and captains and owner crews can plan, prepare and organize their worklists for maximum efficiency, resulting in a more fluid, safe, and effective outcome for all.
4-What are the greatest benefits and challenges posed by digitalization from your point of view?
At Ptw Shipyard we have embraced the digitalization of the industry with open arms as we have found that the positives it offers far outweigh any negatives. For my business and my work teams, located in a historic port on the northeast of Spain, to have access to owners and vessels from across oceans is an incredible experience and privilege. The removal of geographical barriers has opened up a worldwide market for us, offering us access to an unlimited flotilla of superyachts of a variety of designs and concepts.
In the past, and my team would only have the opportunity to meet new clients at boat shows and conventions unless we cold-called yachts in marines.
The opportunity to put our skills and talents on a worldwide market, to be able to reach out to such a varied and extensive range of clients and projects is highly gratifying and an advancement we relish.
5-What is your vision for the superyacht refit and repair industry for the next decade?
Based on my experience within this industry over the past two decades I would predict that the advancements in 3D printing and CNC manufacturing will continue to improve and innovate as their contribution to the industry thus far has been exponential.
Being able to replicate and produce exact parts at faster rates with less waste has allowed the industry to evolve at a remarkable rate and the technology promises a multitude of possibilities for the industry’s future.
Additionally, the entry of a younger clientele into the market has opened up a wide range of new demands and services. As more and more millennials reach the heights of millionaire status, the demand for superyachts has not only grown but concepts and design tastes have expanded.
None so much as the challenge to reduce our carbon footprint in the industry, to offer a greener product as a standard, and the centennials who follow these millennials into the market will push the demand even more. Any business that has not already implemented a more sustainable business model is now at the back of the pack and losing ground rapidly.
While some might struggle to embrace a new greener future for us at ptw Shipyard it is an exciting time and we pride ourselves in offering a sustainable business model.
For me, having been in the industry this long I am thrilled to be an active part of this future, which ironically has saved a lot of my past.
As the demand from Gen Y and Z reduces waste and promotes recycling and reuse, yachts from the ’80s and 90’s that until now were overlooked in favor of new builds are back in vogue as retro is now highly viable through refits and updating of engines, electrics, and electronics.
It’s a joy for me to see yachts that would have been top of the range and highly aspirational when I started in the industry back in demand and loved by a whole new generation of owners and sea goers.
6-After Corona dip what are the main priorities for your plan in that respect?
The covid-19 world’s pandemic has been the most interesting time most of us have lived through and while it has been devastating in terms of travel and leisure the extreme limitations it has enforced on the industry have had a positive and encouraging effect on innovation and creativity. For us, at Ptw Shipyard we had to quickly react to the ever-changing circumstances and that has given us a more flexible outlook on how to operate our business and attract clients. Going forward we will continue to be more reactive to change while effectively managing costs as we now know that business agility and awareness of where trends are going are key, and that downtime in our core business is an ideal opportunity to focus on complementary project ideas that were sidelined due to time constraints during normal working hours.
7-How did you get into the industry of shipbuilding, especially Yachts? How did your career path lead to finding your shipyard Ptw?
To date, I have spent more than two decades working in the yachting industry having started in the late ’90s dealing with overseas sales for Grand Banks and Grand Yachts.
In 2002 I moved to head up a new sales division in the Pacific Northwest market, a division that rapidly became a top sales earner for the company.
Although I left the world of boats in the mid-2000s to dedicate myself to other sectors, I have always had close relationships with yachting because it has always been my passion and a treasured experience we have always shared as a family.
In 2016 I founded ptw Shipyard, located in the port of Tarragona in the northeast of Spain, of which I am now CEO. Utilizing my experience as a professional in the superyacht arena and a superyacht repair and refit specialist, the company has quickly become the breakthrough shipyard in yacht and Superyacht refit and repairs in the Mediterranean region.
8-There is clear competition for the ownership of mega yachts between the Arabs and the Russians. Do you agree with me on that, so why then?
Indeed, a high percentage of the world’s most expensive and stunning yachts have Arab or Russian owners, with the Arab world leading the pack in terms of quantity.
When I think of yachts such as Lady Moura, Al Mirqab, Serene, Al Said, Radiant, Yas, Dubai, Topaz, and Azzam, it is clear to me that a large number of the world’s most spectacular superyachts and mega yachts have Arab owners.
9-Do you have Arab shopping for your future projects and how do you view the Arab market as a fertile market for the yacht industry?
From the list above it is easy to see that affluent Arabs appreciate the beauty and splendor of a super and mega yacht. For us, at ptw Shipyard we consider the Arab world as the leading market in the superyacht industry. For the past few years, the number of billionaires has increased by more than 40% and these extremely successful business people are choosing to celebrate their accomplishments with the purchase of superyachts. In the highly prosperous Arab world the high-end superyacht price tags, that make most people’s jaw drop, are considered worthy investments which have resulted in over 200 of the world’s largest and most upscale yachts like Azzam, Dubai, Al Asid, and Prince Abdulaziz calling the Middle East home.
10-Do you have clients in the Arab region and do you have future expansion plans? What temptations do you offer to attract your Arab customers?
Currently, about 50% of our clients are from the Middle East and we are eager to attract more clients from this growing market. In addition to our highly skilled craftsmen and teams at ptw Shipyard, our staff is 100% customer orientated offering individual and personalized service to every client. We pride ourselves on providing tailor-made solutions to our clients while maintaining open and clear communication in a customer-centric environment.
11-Have you followed the great developments that took place in the Kingdom of Saudi Arabia through Vision 2030? Can there be any cooperation with the Kingdom in joint projects?
As a business that prides itself on offering sustainable business practices and promoting a greener future ptw Shipyard welcomes initiatives that further this endeavor. Vision 2030 is a truly amazing undertaking, not just because the Kingdom of Saudi Arabia is actively promoting a more diverse and sustainable economy and committed to reaching net-zero by 2060, but their Sustainable Saudi Vision combined with a large number of superyacht Arab owners means that there is a real and solid drive for greener change coming from what I would consider the epicenter of the superyacht market. In my opinion, Vision 2030 is one of the most influential and effective projects for change within the superyacht industry and Ptw Shipyard would be delighted to play our part, in any way we can, to ensure its successful outcome.