With the emergency spreading worldwide, we are interacting with the market’s players in order to collect points of view and find out the actions put in practice by the industry in their crisis management. With this situation evolving continuously, it is not easy to figure out the current state of things and all the consequences. Trying to offer some considerations directly from the business world, we have interviewed superyacht builder Nobiskrug.
SYD: The yard has clients in its portfolio which represent the highest segment of the market, so let’s focus first on this type of customer, the wealthiest segment, few numbers, not a mass market. Can we imagine that at least this high level of clients will remain in the sector, I mean, in the short term? Or, on the contrary, is uncertainty as democratic as the virus infection, which affects everyone?
Nobiskrug: “This isn’t the first time that the yacht market has faced uncertainty, and we’re not in this alone. While we are currently dealing with a unique set of criteria, what past experiences have taught us is that the current situation is just a phase in history. Uncertain months may lead to temporary hesitancy by some but we stay in close dialogue with current and prospective owners and remain optimistic that all projects and plans will continue to move forward as smoothly as possible in the challenging times ahead”.
SYD: Financial markets show an equally apocalyptic scenario. If we look at how Bloomberg looked this morning, ‘deep red’ doesn’t even begin to describe the situation. In addition, oil is also at a price war and historic lows. You don’t need a great expert to say that the richest clientele in this sector comes from the financial, oil and energy world … are we therefore burning great wealth or creating others of different types? It is said that wealth can neither be created nor destroyed, like energy, but can only be transferred or changed from one form to another. So should we expect a different geography of the distribution of the wealth? Have you done this type of evaluation?
Nobiskrug: “The past five years have already demonstrated that not only does wealth come from all sectors, but that the demographic of yacht owners is evolving, too. Historically, the titans of oil and finance have ruled the seas, and while they still remain big players there are new and innovative markets that offer services and developments required and sought after by the modern world. Who could have imagined the eruption of silicone valley billionaire’s before the creation of the Internet? Wealth may well be redistributed, but it doesn’t disappear. And the advent of green technology in the yachting industry signals a bright future even in a new financial dawn”.
SYD: Germany is expected to enter a more serious situation in the following day. How are you responding to the emergency and what kind of consequences have you had from an operational and commercial point of view?
Nobiskrug: “In view of our responsibility to society and for the health of our employees, their families and our partner companies, we are prepared to take all necessary steps to prevent the further spread of this disease. In order to better deal with the coronavirus crisis, we have therefore set up a crisis management team at the shipyard, which centrally monitors the various reports and new recommendations for action and then implements them. We make use of the possibilities offered by flexible working time accounts or grant short-term leave and provide opportunities for home-office working. We keep a close eye on what other regulations the federal and state governments are making. At present it is too soon to be able to process the immediate operational and commercial implications on the yard as a whole”.
SYD: How are the relationships with your customers today, with those who have a construction under way and those who have or are about to sign a new order?
Nobiskrug: “The world is facing a crisis at present, not just Germany. The limitations on international travel are far-reaching, and we have taken the decision to postpone any face-to-face meetings that were due to take place in Germany. All of our clients fully understand and appreciate the steps we are taking to keep everyone as safe as possible. In countries outside of Germany where travel is not restricted or required, some existing meetings have been possible, but the situation changes daily and affects our clients as much as the shipyard. We haven’t experienced any negative reactions to date”.
SYD: For a shipyard like yours, the Palm Beach Boat Show – now postponed – was a key-event. What kind of impact on your specific business will mean not to be able to cover the U.S. market for an indefinite period of time? As a matter of fact at the moment we do not know if yachting events can be ‘restored’ before summer or we have to wait until September…
Nobiskrug: “Our aim has always been to continue in full operational mode unless advised otherwise. We planned out participation at the Qatar International Boat Show right up until the point it was cancelled three days before the start date. While we always try to anticipate changes and put contingency plans in place, we can only operate under the information provided. Our hope is that by October, the situation will have returned to normal, and the Fort Lauderdale International Boat Show will take place as scheduled providing us with valuable access to the American market”.
SYD: In practical terms, what kind of problems are you facing at the production? Do you import components and accessories from countries affected by the emergency, especially from Italy, for example?
Nobiskrug: “Inevitably our rate of production has been influenced by the current situation, and part of this is due to the number and variety of imported components and accessories that we acquire from foreign countries. But, as mentioned previously, we are not alone in this, and we continue to remain in communication with all parties to try and navigate a smooth transition back to normality at the earliest time possible”.
SYD: Can we conclude with a positive message?
Nobiskrug: “Our commitment at Nobiskrug is to bring our clients nothing but the best. From this central point, we have brought to life some of the most challenging and visionary superyachts ever built and have carved out a niche in the industry as the go-to yard for ground-breaking builds, aesthetically arresting yachts. Our brand pedigree is one of strength, courage and determination, and we bring these qualities to the fore at times like the present when normality lies in question and the future is unknown. We remain confident that as a brand, an employer, a shipyard and builder of exceptional superyachts, we will continue to deliver on our promise, in whatever shape or form that may be”.