Christopher Adams

The Business Herald’s markets and banking reporter.

High dollar takes wind from sails

Award-winning boatbuilding industry faces a contracting market and a strong currency raising local prices.

Yachting Developments won awards for refitting the classic 1934 America's Cup J Class Endeavour (pictured). Photo / Supplied
Yachting Developments won awards for refitting the classic 1934 America's Cup J Class Endeavour (pictured). Photo / Supplied

New Zealand boat builders are savvy and determined but the strong kiwi dollar is making it difficult for exporters to remain competitive and the marine sector is clashing with the Government over the problem, an industry group boss says.

Two New Zealand superyacht makers have received prestigious awards in the United States this month.

The 30m Antares III, built by Yachting Developments in Hobsonville, took out the Best Sailing Superyacht award in the 24-40m category at the International Superyacht Society Awards, in Fort Lauderdale.

And the 67.2m Vertigo, manufactured by Henderson's Alloy Yachts, took out the award for Best Sailing Superyacht over 40m.

Yachting Developments also won the Best Refit award for its refurbishment of Endeavour (pictured above), a classic 1934 America's Cup J Class.

NZ Marine Industry Association executive director Peter Busfield said local superyacht makers had managed to pick up some market share during the tough times since the global financial crisis. But the dual impact of a contracting total market and a strong New Zealand dollar made for a very challenging environment to operate in, he said.

Busfield said the high dollar, which was trading above US82c yesterday, was making it more difficult for manufacturers to offer competitive pricing.

"The market is declining and prices of goods from New Zealand are increasing - it's a double negative really."

Busfield said the industry was "at loggerheads" with the Government over its failure to take steps to address the dollar's strength.

The industry wanted the Reserve Bank to cut the official cash rate, the relatively high setting (2.5 per cent) of which encourages buying of the kiwi dollar, pushing up its value.

Opposition parties and unions are also putting pressure on the Government over the high dollar and the effect it is having on manufacturing. The Government, however, has labelled the Green Party's suggestion that quantitative easing - essentially printing money - could lower the dollar's value a "snake oil solution".

Prime Minister John Key said this month that the manufacturing sector was not facing a crisis.

In the past four years the sector contributed between 11.7 per cent and 11.9 per cent of GDP - it wasn't growing massively but it wasn't in decline, Key said. "There is not a crisis in the manufacturing sector," he said.

"It's just tough on some businesses."


NZ marine industry

$1.7b Annual turnover

$650m Annual exports

9000 Fulltime staff

470 Apprentices

Superyacht industry worth more than $200m annually

Source: NZ Marine Industry Association

- NZ Herald

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