TOP STORY: Bay boat firm goes bust

Yacht builder owes $7m
Tauranga's biggest boat building company, Pachoud Motor Yachts, has gone into liquidation owing nearly $7 million.
The company, which at one time employed up to 120 people to build luxury yachts, has become the latest victim of the rising New Zealand dollar.
The mortgagee sale sign has gone up on a business hailed as a major new force in Tauranga's boat building industry when it shifted from Rotorua to Sulphur Point five years ago.
It has been a dizzy spiral into insolvency for company managing director Dave Pachoud.
Two years after he bought the 1.8ha site at the end of Cross Rd from Port of Tauranga, Mr Pachoud boldly announced a $3 million plan to build a boat storage stack and dig a canal to service the stack and his boat-building operation.
He even planned to build an apartment block next to the dry stack but then confidence started ebbing out of the industry as the New Zealand dollar climbed above US70c, slashing profit margins for boat builders.
The half-finished skeleton of the boat stack, which has dominated the horizon behind the Chapel St sewerage works for more than a year, became a symbol of Pachoud's worsening financial situation.
After shedding most of his production workers in December, Mr Pachoud opted for voluntary liquidation last Monday and closed the doors on the dozen remaining employees.
Attempts by the Bay of Plenty Times to contact Mr Pachoud have been unsuccessful.
Athol Ryan, of RFMS Consulting, the agent for the liquidator, said creditors had commenced High Court proceedings against Pachoud Boat Builders and it eventually became a choice of being forced into liquidation or going voluntarily.
The biggest portion of the $6.9 million debt comprises shareholder loans and advances totalling about $2.8 million. The preliminary statement of company affairs also shows 10 secured creditors are owed about $2 million, 220 unsecured creditors about $1.7 million and preferential creditors about $290,000.
The 1.8ha property at 50 Cross Rd is shown as being owned by Mr Pachoud and was valued at $5.1 million in September 2003 - land $2.2 million and buildings $2.9 million.
Mr Ryan said New Zealand's rising exchange rate against the US dollar was a big factor and made it tough to compete in the international marketplace.
The final straw was the termination of a large contract in November, with no big job to replace it. From a payroll of more than 100 staff in July, numbers dropped to 65 in December and had reduced to 12 when the doors closed last week.
Mr Ryan said even a few of the creditors had said it was a shame that such a promising enterprise for Tauranga had ended in liquidation.
The luxury end of the boat-building market has been hardest hit by the downturn.
Auckland's Marten Marine went belly up two months ago and Tauranga's only big yard still operating in this market, Southern Ocean Marine, is grimly hanging on.
Company director Greg Prescott said the exchange rate was tearing the heart out of the industry. They were doing only a fraction of the work they used to when prices more than made up for the competitive disadvantage of building so far from international markets.
A non-replacement policy had seen staff levels drop by a third to 31 since the downturn started to bite. Southern Ocean Marine was now fighting for every scrap of work it could find in order to retain core staff until the dollar weakened, he said.
Mr Prescott has buyers wanting to have boats built in Tauranga, including a 60-foot luxury yacht but told him they were hanging off until the dollar weakened.
It meant the company was no longer getting the big time-consuming projects and work had dropped by "50 per cent and some".
Tauranga's production boat builders have not been affected to the same degree because most of their output was sold locally.
Chris Heaton of Oliver Marine in Greerton said it was building four boats at a time and staff had grown from 25 to 30 over the past 12 months.
Boats sold from $600,000 to $2 million but, unlike custom builders which started with a blank sheet of paper, production yards had a set range of models so that clients knew what they were getting.
Business was also good for the AMF Boat Company in Hewletts Rd which mainly does custom-built alloy craft for the New Zealand market. Spokeswoman Jodi Sharratt said the company had five staff and was looking to employ another one or two.