Christopher Adams

The Business Herald’s markets and banking reporter.

Superyacht builder hits doldrums

Luxury boatbuilder blames staff cuts on Government failure to move on high dollar.

Super yacht Janice of Wyoming was designed by Ed Dubois' team in Hampshire, UK and built by Alloy Yachts. Photo / Greg Bowker
Super yacht Janice of Wyoming was designed by Ed Dubois' team in Hampshire, UK and built by Alloy Yachts. Photo / Greg Bowker

An award-winning superyacht exporter has been forced to axe more than 70 jobs and is blaming the Government for failing to take action against the strong NZ dollar.

Henderson-based Alloy Yachts' workforce has plunged from 330 to 225 since September because of lay-offs and resignations and it warns of more redundancies if business does not improve.

Marketing manager Linda Berry said global superyacht orders had shrunk considerably in recent years and the Government had failed to take any action against the high Kiwi dollar, which makes local boatbuilders less competitive compared with their overseas rivals.

"With a very high New Zealand dollar, its continued rise and a Government that is doing nothing to alleviate the situation we are finding it very challenging to compete against European and American shipyards."

Fitzroy Yachts in New Plymouth said in January that it would close - at the cost of 120 jobs - as a result of falling demand.

Berry said the reduction in the workforce reflected "production needs". The company is building a 44.1m motoryacht scheduled for completion at the end of the year.

"It would not be prudent for us to continue to pay our skilled craftsmen when we have no work," Berry said, adding that the firm had helped most of those made redundant find new roles in the marine industry.

She said Alloy Yachts, which has won more than 30 international superyacht awards, was in the fortunate position of being considered one of the world's top superyacht builders. The company was optimistic about proposals it had provided to potential customers, but in the "unlikely event" that a superyacht contract was not signed by September the firm would have to consider more redundancies.

NZ Marine Industry Association executive director Peter Busfield said competitors in the Northern Hemisphere were also receiving government subsidies that allowed them to lower their prices.

Berry questioned why tax breaks were provided to the film industry and not the superyacht sector.

But Minister for Economic Development Steven Joyce said the Government could not subsidise individual struggling companies.

"The Australians have tried doing some of that with their car industry for example and it has become a real problem for their economy which they are now having to deal with," Joyce said.

He said that while the high dollar was challenging for some exporters, it reflected the strength of this country's economy.

- NZ Herald

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