Dubai: If Mohammed Hussein Alshaali has his way, buying a boat would be as easy as heading to the nearest luxury car showroom and putting down Dh400,000 plus on the table. With a few tens of thousands added for any additional ‘trim’ the buyer wants.
And Alshaali, Chairman of Umm Al Quwain-based Gulf Craft, might just have his way. There are more people – the wealthy, of course – who are willing to consider such an investment in a boat of their own. The same way they would consider a Rolls-Royce, Bentley or Ferrari buy.
“In the last 10 years, our focus has been superyachts, which meant – potentially - losing our connection with smaller boats,” he said. “We are now doing a full revision for this category and reviving our small boats production.
“We feel now is the time to enhance given the fact we have really been successful in this area [in the past]. Small boats are our focus not because we don’t have customers for yachts – these small vessels are leisure boats between 20 to 50 feet, such as sports cruisers, fishing boats and overnight boats with small cabins.”
With the UAE and Saudi Arabia adding more marinas, Alshaali’s hopes of landing a few big deals for the small boats are not misplaced…
All set for delivery
Gulf Craft has in 40 odd years crafted quite a significant presence in the luxury yacht business, most recently with the ‘Majesty 175’, which will be delivered later this year to a private client based in the UAE.
“In these 40 years, we have carried the UAE flag all over the world, proudly displaying and selling our vessels as ‘Made in the UAE’,” said the Chairman, who has also been the country’s Ambassador to the US and the United Nations. “We have reached a stage where we see every marina in the world displaying a Gulf Craft boat.”
In the coming months, Alshaali – which is an out and out family-operated business, with daughter Abeer holding the Deputy Managing Director’s position - is hoping to put in as much distance as possible from Year 2020. Any business owner anywhere can empathize when he says, “It was a difficult year for everybody, especially for luxury goods businesses.
Keep at it
“To keep production moving, we reduced our capacity but never stopped or shut down our facilities. It was a difficult time, even to pay salaries, but we stayed together. We continued to build and retain our manpower and were able to build a range of boats and yachts.”
That includes the Majesty 175 – one of the biggest yachts to be made in the UAE ever. It was in January that she was put through the first sea trials, where it touched a top speed of 17 knots. Now, the last set of fitouts are being done on the 780 GT vessel that features a 5-metre Infinity pool and seven ‘staterooms’.
“We started building Majesty 175, the largest composite yacht in the world, four years ago,” Alshaali said. “At the end of last year, we found a customer for the Majesty 175, which helped us a great deal, especially during this challenging time.
“Anyway, I believe that with what’s happening in the region now, with better stability we will continue to do well in spite of the pandemic and other economic challenges. In the beginning of this year, we saw a new appetite for boats.
“We had boats in stock and so were able to sell them. The first quarter was better than the last two quarters of 2020. During the pandemic, we built new boats, but we also did trade-ins and so accumulated a number of pre-owned yachts. We were able to sell most of these during the last five months.”
During the peak of the pandemic phase, the UAE company managed to deliver two superyachts to clients in Europe. “The interesting bit is we sold it through virtual conferences and Zoom-based yacht tours,” he added. “The customers did the tour and the paperwork – everything before shipping – virtually. And this is how, at a very bad time – I think it was September or October – we were able to deliver both yachts.”
"We have been considering an IPO for a while, however, at the moment we don’t think this is ideal for us given the changes we are making in the company. Nevertheless, I do believe an IPO is inevitable for family businesses."
Anchored in the Maldives
Apart from the boat yard in Umm Al Quawain, Gulf Craft also operates one in the Maldives, which has proved a stable revenue generator through the years - and expected to deliver more of the same.
The Maldives facility is in its 20th year and “we are building a new facility to increase production,” said Alshaali. “We have observed that Maldives tourism has expanded due to the exclusivity of those resorts, which is ideal during the current pandemic situation.
“Due to their high occupancy, Maldives needs more yachts for transportation and recreational activities. Gulf Craft covers almost 80 per cent of Maldives’ needs for boats and yachts, including those for government use.”
Time for new?
Emerging out of a pandemic may not be the ideal time for businesses to think of committing significant new investments on expansion or a new facility. But Alshaali is nursing such plans.
“UAE is the best place for production of equipment and machinery related to marinas – and not just limited to boats and yachts,” the Chairman said. “As a company, we produce almost everything we need in-house. I think there is a big opportunity to invest in the marine industry. I hope the promise of the new UAE industrial strategy – Operation 300Bn - will make this promise come to life.”
Test Saudi waters
But there is the potential for a ride into the Saudi market. Each of the Kingdom’s giant-sized tourism developments feature an ample spread for marinas and all manner of water-side attractions. Alshaali can see how those prospects could shape up for the company.
“We are in talks with partners about joint ventures in new markets,” said Alshaali. “The closest one we have been talking to is a possible business partner in Saudi Arabia. We are still in a very early stage.
“We will need more facilities outside of UAE, similar to our facility in Maldives, However, we haven’t decided on the location of this new shipyard.”
But as the UAE and the Gulf keep adding those marinas, there will always be a spot for Gulf Craft to anchor. With a superyacht or a small boat…