Price competitiveness without compromises on quality and aggressive sales into African and Far Eastern markets will help boat manufacturers post slightly better results this year. Monetising innovations and technology developments could also pave the way for more robust returns according to Nasser Alshaali, CEO of UAE's yacht builder, Gulfcraft.

Part of your growth strategy has been to enter new markets. Will this grow manufacturing capacity?

We are not expecting to grow the capacity this year for manufacturing. We have quite a few facilities available, so we expect demand this year to be accommodated by the existing facilities.

We expect demand to grow marginally to 2009, which was a weak year. It was similar to 2006 and similar in trend to what you would find in the real estate sector. Our company has very low fixed costs and we have very low debt. Our costs are variable and we can scale the business according to demand, which we did in 2009.

So we will still make a profit. It will not be obviously like 2008, which was a record year for the industry.

We have experienced the same trends here as seen in this industry across the world, which is roughly around 30 to 40 per cent drop in demand.

The time is ripe for us in these market conditions to spread our wings. We saw the beginnings of this when we started selling medium-sized yachts in South America and the Far East. We even started selling to Italy.

This year you'll see more of this. We'll be more aggressive when it comes to new territories. Africa is very promising with countries such as Nigeria, Tanzania and Somalia in focus.

This is a combination of boats and yachts but also special projects such as military and government contracts.

Some analysts feel this will be a double dip recession. What are your predictions?

If there's another dip we will adjust again. I wish I had that magic orb to predict whether it's going to happen or not and I doubt that most of the pundits know that. From what we see right now, while 2009 was a dim year for the industry and the country, we expect 2010 to be not much better.

You announced new technology developments at the recent Dubai International Boat Show. Will innovation become a part of your business model?

We're not a very jealous manufacturer. We have the interest of the industry on our mind. We also have the interests of the marine consumer in mind.

We will share technology where it's relevant and useful for the industry but we will always maintain a competitive edge when it comes to innovation and engineering. It is not explicitly a part of the business model. Our primary objective is to develop technology and create a market-leading product.

As and when it makes sense for Gulfcraft's own strategies and the industry in general we'll share this technology and open it up to a wider market.

In these conditions, do you expect to maintain 70 to 80 per cent exports?

The real surge in exports was on this decade. That was the real push towards international markets and we saw more exports of medium-sized yachts go to these markets. I expect exports to continue at 70 to 80 per cent out of the UAE and a further 40 to 50 per cent out of the GCC. Currently, it stands at around 45 per cent and we expect that to increase to European and Far Eastern markets, which have a huge potential. We sit in a slice of the market where we have the equivalent to European or Italian manufacturing. I would argue we have better engineering and structure at a 20 to 30 per cent discount in terms of price.

So we have a price advantage over the European builders producing at more or less equivalent quality. Some builders are proud and will say 'We sell our boats at the boat show', we say 'We sell our boats at sea'. The difference being it's not about showmanship but rather about engineering quality and ability to survive over a longer run.

Are the Americans and Europeans better marketeers?

If anything, Dubai has proven that it can be a very good marketeer at least in terms of Dubai, so there are good lessons to learn from that.

We've already established that as a platform in terms of the marketability of Dubai as a city from the Middle East. What doesn't help us is when confidence erodes in Dubai because then people question us.

We received several calls after restructuring plans of some Dubai entities. Obviously, we told them we were fine. But they know you're in the same environment so they associate you with it. Whatever happens in Dubai affects us.

PROFILE: Nasser Alshaali CEO, Gulfcraft

Alshaali who heads UAE's yacht builder was CEO of the Dubai International Financial Centre Authority (DIFC Authority) from 2006 to 2009, where he was charged with developing and promoting the financial services industry.

He also serves on several boards including those of the Dubai Financial Market, The Consulting Office (Dubai Government) and The Social Responsibility Fund (UAE Government). He held the position of COO at the DIFX, where he helped launch the region's only international exchange. He also saw the DIFX established as the world's largest sukuk exchange. lshaali moved to the UAE in 2001, when he assumed a management role with the Technology and Media Free Zone (Tecom).