Poland's yacht-building industry rides crest of wave

By bne IntelliNews December 12, 2007

Bogdan Turek in Warsaw -

While Poland's famous Gdansk shipyards face an uncertain future, the country's yachting industry, centred in the northern Lake District, is experiencing phenomenal growth and is set to become a European yacht-building hub. Exports already reach almost all corners of the world due to a combination of good quality and low prices helped by the falling dollar.

"We hold first place in Europe in the production of sailing yachts six to nine metres long," claims Marek Slodownik, an official in the Polish Chamber of Boating Industry.

Slodownik says that yachts hold sixth place on the list of exported industrial products, with more than 95% of the sailing and motor yachts made in Poland now going for export, chiefly to Germany, the UK, France and Norway. "Sales of yachts grew by 12% in 2006 against 2005, and 2007 is expected to be quite a good year too," predicts Slodownik.

Indeed, the value of exported yachts was PLN440m (€123m) in the first six months of 2007, Poland's Central Statistical Office reports, with about 9,000 yachts sold abroad during the period. Norway bought 1,900 yachts, France 1,800, and Germany 1,500. Polish yachts, in smaller quantities, were exported to French Polynesia, Japan, Hong Kong and Australia.

"The yacht-building sector is growing swiftly and Poland can become a European centre in the area of yacht construction," reckons Marek Wilanowski, owner and CEO of the company Skipper Yachts, another major Polish producer that expects to boost production by 30% next year. "Our future is exports."

Diving for pearls

The situation of the yacht-building business stands in stark contrast to that of the country's shipbuilding one. The government's battle to save the Gdansk shipyard with dollops of aid, despite criticism from the European Commission, culminated in an agreement in November to sell the complex to a Ukrainian company. Even so, the shipyard now employs only about 3,000 people, a fraction of the workforce it had when communist rule ended in 1989.

The same market forces that helped destroy the shipyards are the same forces that have allowed the yacht-building sector to develop. Initially, there were small workshops making basic yachting equipment such as ropes or various gadgets. Over the years they have grown in power and in number.

About 100 yacht- and boat-building companies were recorded by 2005. Their managers formed the Polish Chamber of Boating Industry and Water Activities in 2006 to promote the sale of yachts abroad and in Poland. Annual boat shows held in Lodz, central Poland, drew clients from all over Europe for many years, though the next boat show will be held in Poznan, the city with a tradition of more than 70 years in hosting international industrial fairs, which can offer more space for the growing industry.

"Only 10 years ago, exported yachts were sold under the logo of the western companies we cooperate with," says Slodownik. "Now the products carry the names of the Polish yacht yards because their quality is so good."

The managers of the yacht yards are optimistic about their future. Wojciech Kot, head of the Polish Chamber of Boating Industry and owner of the Delphia Yachts yard at Olecko, northern Poland, one of the country's biggest, says the demand for yachts is so high that prices are now rising. "We are also asked to produce more luxury yachts," says Kot, whose company employs 600 workers and makes 2,000 motorboats and 300 sailing yachts annually.

A luxury-class, nine-metre-long yacht with a shower, kitchenette and beds costs about €56,000. Given that the manufacturers buy yacht equipment for dollars, chiefly in the US, the falling rate of the dollar means that the prices of the Polish yachts are very competitive on the international markets this year. "That is why there is such high demand for the Polish yachts and motor boats," says Andrzej Margalski, the manager of AM Yacht Service at Ostroda. Margalski runs a family business, employs 25 highly skilled workers and makes about 130 motor boats annually.

Out of that total, 80% go for export to Germany, the Netherlands and Norway. However, Margalski says that while the Polish nouveaux riche initially favoured western yachts, now they're being persuaded by the superb quality of Polish-made yachts. "Foreign clients and experts say so," states Margalski.

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