Gulf Craft, a UAE-based boat manufacturer, has scaled down its operations due to slower demand and is still keeping its plan to go public on the back burner due to prevalent volatility in the market, said senior company officials yesterday.
When asked the company's plans to go public, Erwin Bamps, COO of Gulf Craft, said: "It's not the right time and I don't see it happening in 2010 and 2011."
Commenting on the general decline in yacht prices, he said the company didn't reduce prices. "Instead it added more features to its standard products," he said.
Nasser Alshaali, CEO of Gulf Craft, said yacht prices are under pressure due to low demand, particularly in the secondary market after a number of companies in the US and Australia went bankrupt and dumped their assets in the market. "But Gulf Craft managed to adjust itself because we make customised yacht," Alshaali said.
He said mortgage will help the yacht industry but financial institutions are incapable of providing mortgage and it is affecting growth of the industry.
He said the market has not been in the good shape and growth of boat industry in the Gulf has been hampered by the high inflation and rising costs of labour force, adding that the regional governments have been focusing on the services sectors rather than the manufacturing sector and change of labour policy will have a positive impact on the manufacturing industries.
"Manufacturing is becoming difficult and fixed-costs are going up like land and labour and claim that this region offers low-cost labour is not longer right," he said.
He said the company is also looking at distributors in African and East Asian countries where the yachting is lifestyle and has the potential for growth.
Alshaali and Bamps were addressing a press conference to announce the launch of Majesty 125 yacht which will start sailing in May. Gulf Craft is also participating in the Dubai International Boat Show opening today with more than 400 boats, including the Silver Zwei – the world's fastest conventionally-powered motor yacht.
The Dubai World Trade Centre, the organiser, said there will be 15 world exclusive premieres and 25 regional launches at the 18th edition of the exhibition this year.
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