Archive for » June 9th, 2014«

Smoother sailing predicted from once-stressed boat industry

MANATEE — Boosted by a resurgent luxury pleasure boat market, many Manatee County boat manufacturers are planning to lay more keels in 2014 than any time in the past six years.

Once an economic engine for the county, the industry is surging back from a recession that put many builders out of business. New hiring in the sector is on its way to creating more than 200 new jobs locally, while reinvigorated companies are refitting or adding onto older manufacturing buildings as they grow their operations.

But it’s still not the industry it used to be. Sailboat manufacturers continue to languish in a slack sales breeze, while powerboat builders find themselves having to cater to high-end buyers with expensive boats loaded with quality and options.

High-production, low-cost boat manufacturing will not come back to Manatee County, builders said. They point to Wellcraft, which closed its Manatee County factory in 2008. At its peak, that company built boats in about

1 million square feet of manufacturing space in south Manatee and employed about 800 people.

These days, industry growth is fueled by “high net worth individuals.” Chris Craft, Jupiter Marine, Hann Powerboats, Yellowfin, Seaforce IX and a growing family of companies owned by Palmetto boat builder David Marlow are among those selling craft that cost tens of thousands, hundreds of thousands or millions of dollars. Sales for many of these companies are growing by more than 20 percent annually.

The manufacturers, and boat sellers, credit the high end of the market for keeping the industry alive.

“That buyer has remained in the market place even in the toughest of times,” said Darren Plymale, vice president of Galati Yacht Sales on Anna Maria Island.

Florida is a major hub for the boat industry. Pleasure boat manufacturers employ more than 9,300 people across 172 individual companies in the state, according to a 2012 study by the National Marine Manufacturers Association. More than 28 percent of pleasure boat construction jobs in the United States are in Florida.

Florida boat builders took a big hit during the Great Recession, with many paring their workforces to the bare minimum. Some closed for good.

In Manatee County, Jupiter dropped to about 50 employees before getting back to 115 this year. Chris Craft, which operates a 170,000-square-foot factory in Tallevast, dropped from a peak workforce of 390 to just a few dozen. And Marlow Hunter, an Alachua sailboat manufacturer David Marlow bought out of bankruptcy for $1.9 million in 2012, barely remained in business through the downturn.

Now, with their manufacturing floors full of boats on order, the one thing these companies need most urgently is employees. Jupiter, which began building boats at its 12th Ave. E. Palmetto facility in 2007, is doing everything it can to add to its workforce. That includes looking at both potential hires with previous boat building experience, and working with Manatee Technical Institute to bring in students for one-week internship-style tryouts.

“We’re still trying to get as many people in the door as we can,” said Todd Albrecht, Jupiter’s vice president.

Call it a comeback

Talk to an owner or top executive at Manatee County’s boat building companies about revenue and the picture is rosy. Hunter Marlow is looking at a 50-percent increase in revenues this year on a volume of about 300 boats between its sailboat operation and its Mainship line of powerboats, said company president John Peterson. Jupiter is looking at a 30 percent bump in business, while Chris Craft is predicting 20.

Stephen Heese, one of the owners of the 140-year-old Chris Craft brand, sees the turnaround as something that acutely affects the top end of the boating market. His company builds boats ranging in size from 20 feet to 36. About 500 of the wood-accented, super luxury craft sold to buyers in 46 countries last year, most of them for cash. Sales are up this year and the company is looking to add 20 workers to its 225-person workforce. Chris Craft boats can retail for more than $600,000, according to its website.

The company’s strategy, even during the worst years of the recession, has been to build boats that are high quality, expensive and that appeal to the company’s core market of 45 to 60-year old high-net-worth professionals. Heese said this is the way to go for any boat builder in the Bradenton-Sarasota area. Industry wages, he said, are higher in Florida than in some other boat building markets.

“It’s not a great place to build value-brand boats,” he said. “We’re competing at the very top end of the market.”

Peterson at Marlow Hunter and Albrecht at Jupiter say similar things about their companies’ boats. Marlow Hunter has kept its manufacturing operation in Alachua, in part, to retain its workforce of experienced boat builders. At Jupiter, boats that cost up to $850,000 are built to last. Albrect said Jupiter boats can weigh 1,000 to 2,000 pounds more than those built by competitors because they are designed with more structural material.

Yellowfin, in particular, benefited from its position as a luxury boat brand during the recession. The Bradenton company grew from about 90 employees pre-recession to 180 now. The company builds about 170 boats a year ranging in price from $45,000 to $600,000.

The company’s owner and president, Wylie Nagler, said that, for now, the formula is working. It may not as builders run out of space for industrial manufacturing and qualified workers.

“We’re running out of room and we’re running out of employees,” he said.

Market demand is so great that even smaller, niche builders are jumping into the pleasure boat market. Hann Powerboats, which has been building aluminum and fiberglass boats for the armed forces and security services out of its Tallevast factory since 2006, is adapting high-durability designs for the luxury market. Russ Hann, the company’s president, said his $7 million company now has the sales volume to move into pleasure boating.

The company’s 13 employees built 72 boats last year and will likely build even more in 2014.

“This year for the first time in years I have two 50 footers on order with another behind it,” he said. “Everybody is feeling comfortable and wealthy.”

A build up

With the uptick in business, boat builders are feeling cramped in the buildings they made do with through the lean years. Chris Craft is evaluating a 30,000-square foot expansion to its facility, while Jupiter is already building about 25,000 square feet onto its main manufacturing building.

Another Manatee County company in the pleasure boat industry is growing even faster. JRL Ventures, a marine tool and mold maker that recently expanded its Cape Coral business to the Whitfield industrial district in Bradenton, bought several derelict Wellcraft buildings in 2012. The company makes hull molds for a number of boat builders, including Jupiter and Yellowfin. Since opening its local facility, the company has hired more than 80 new workers. More than 50 of them were previously laid off by Wellcraft.

Kevin Long, a JRL project manager, said JRL and its Marine Concepts subsidiary has expanded into more than 200,000 square feet in four buildings.

The amount of boat mold work coming in is an indicator of the health of the industry as a whole, Long said. Boat builders who previously built their own molds are contracting that task out to keep assembly lines running without interruption.

“Nowadays we’re starting to produce all of their molds for them,” he said. “What we’re doing is allowing the manufacturers to focus on their production.”

State and county government are helping the industry come back from the brink. Hann, JRL and Donzi-yacht builder Roscioli International have garnered a total of $226,000 in incentive money from Manatee County. JRL picked up an additional $192,000 in grants from the state.

“It’s nice to see boat building coming back,” said Sharon Hillstrom, CEO of the Bradenton Economic Development Corp. “Historically, it has been an economic driver for the community,”

It’s not all smooth sailing. Powerboat manufacturers, who sell 84 percent of all power boats in the state, according to the NMMA, are seeing most of the gains of a rebounding market. Sailboat sales which comprise just 3 percent of the market, are not rebounding according to manufacturers.

Richard Porter, co-owner of Palmetto sailboat builder Precision Boat Works, said his workforce of seven is about as small as it’s ever been. The 35-year-old company has seen scores of companies producing similar products go out of business. Precision was one of about 15 sailboat builders operating in Manatee County at one time, he said.

Porter expects to see about 100 boats leave Precision’s 15,000-square foot factory this year, about the same as in 2013. He doesn’t know when the market will get better.

“The sailboat industry itself is in fairly bad shape,” he said.

Peterson at Marlow Hunter said he expects increases in revenue this year and in 2015 to come largely through sales of Mainship powerboats.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

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