The Project Auckland series looks at the challenges facing Auckland as it seeks to become a world-class city.
When the Government brought international business guru Michael Porter to New Zealand in 1990 to advise on future business directions for the country, the Harvard University professor's advice was deceptively simple.
He recommended New Zealand should focus on business activities where the country enjoyed a natural advantage over international competitors, and where it had already proven competence. And he advised that further advantages would result from "clustering" together the various businesses that made up the chosen sector, grouping them close to each other if possible and taking a co-operative approach to foster excellence.
Professor Porter named the marine industry as one with considerable potential for expansion and greatly increased exports off the back of our internationally recognised skills in competitive sailing and boat building.
And that was before New Zealand had attracted even more international attention by winning and successfully defending the America's Cup, which brought international business tycoons like Paul Allen and Larry Ellison to watch the racing from their massive superyachts.
The marine industry is still a significant importer of components such as diesel engines, electronic equipment, and so on, but a growing proportion of these are used in superyachts. This earns ever-increasing overseas funds for New Zealand, as well as creating thousands of new jobs. The marine industry in Auckland exports more than twice as much, by value, as it imports, earning the lion's share of the $717 million of overseas funds earned by the marine industry on a national basis last year.
And it feeds a great number of suppliers of goods and services as diverse as ropes and interior design, leather and wine, plumbing and carpet, light fittings and entertainment systems.
According to an industry survey, Auckland's recreational marine industry in 2008 had sales turnover of $1.2 billion, about two thirds of the New Zealand total and representing a 31 per cent increase since 2005. The industry contributed 4.4 per cent of the region's exports. This was achieved through nearly 900 separate businesses employing some 6000 people in Auckland, including more than 500 apprentices.
Sales turnover in Auckland is predicted to reach $1.8 billion by 2020. This will be driven primarily by new superyacht construction and increasing superyacht refits, both of which depend on new facilities being created at Hobsonville in West Auckland and Wynyard Quarter in Auckland City.
Peter Busfield runs the recently re-named New Zealand Marine Industry which has played a leading role in ensuring Porter's advice has been followed and built on. It runs industry training and apprenticeship schemes and a raft of other initiatives to ensure members have access to advice and services which will continually improve standards.
Down on Wynyard Quarter there are more than 100 marine companies forming the sort of cluster which Porter preached would turbo-charge the industry. "It's the biggest marine cluster in the world," says Busfield."It's [recognised] we can do a range of things here in Auckland for a superyacht in just one week that might take up to three months to co-ordinate in the United States because over there all of the skills required are not grouped in a single place.
"Here we all co-operate, we all know each other, we refer business to each other, we focus on meeting the client's needs. There is no marine service, skill or component that we can't source right here in Auckland and they are all world class."
Faced with ever-growing demand, the race is on to ensure Auckland has adequate support infrastructure and capacity to be able to handle the demand and gain the benefits of the projected growth. Major public and private investment is going into Wynyard Quarter to create extra facilities for superyacht refits.
The yachts will be commissioned at Wynyard Quarter and built further up the harbour at Hobsonville where a new marine precinct, Yard 37, is taking shape.Across the harbour at Devonport, Babcock Fitzroy has leased the former Navy dry dock and associated facilities, which are available to handle the very biggest superyachts for maintenance and refit work, and Gulf Harbour Marina has also geared up to handle refit work.
Many of the specialist businesses which form part of the marine industry are themselves recognised as among the best in the world and export in their own right, as well as supplying equipment for new vessels built in Auckland for export, or for use in refits.
At its Avondale loft, believed to be the largest dedicated sail loft in the world, Doyle Sails recently crafted the biggest sail ever made in the world, a 2227sq m gennaker - big enough to cover more than a dozen houses - for the 58m superyacht Kokomo, built by Alloy Yachts in West Auckland. Companies like Maxwell Marine are displaying their Kiwi winches, made in Glenfield, at international boat shows, competing head-to-head with the best the world can offer.
Earlier this month industry co-operation became even closer, with the NZ Marine Export Group becoming a sector group of the NZ Marine Industry Association, as New Zealand continues the process of presenting a seamless front to the world under the distinctive NZ Marine logo. At major boat shows around the world you will find a "New Zealand Street" set up as part of the show where our marine businesses cluster together to cross-promote what they do, adding to the credibility of New Zealand - and Auckland in particular - as the logical place to come to. This has been just one of the Marine Export Group's successful initiatives to market the industry internationally - another has been to stage the Millennium Cup for superyachts in New Zealand, coinciding with the international Louis Vuitton racing.
It's a cluster, working just like Michael Porter said it could 20 years ago, using the advantages of an international reputation and a proven skill base to create a significant manufacturing group already earning good export dollars, and with exciting growth prospects.
Progress in the domestic market is somewhat dependent on population growth, but there are no such restraints in a world where sailing is a fast-growing sport.
The global market for new superyachts is expected to reach $54 billion by 2013. New Zealand has less than 2 per cent of this overall market, but is already the third largest supplier of big sailing superyachts. And when new infrastructure is in place in Auckland, we'll be able to refit more than twice as many superyachts as we do now.
- SEA + CITY PROJECTS
