McDell Marine going from strength to strength

By ROBIN BAILEY

An Auckland boatbuilding company that has been quietly achieving international sales of more than $10 million a year for the past five years is about to record some important milestones.

The company, McDell Marine, is highly regarded in New Zealand as the builder of the Farr MRX match-racing Farr 1020 yachts and 1220 cruiser racers and the Reflections powerboat. It has built few boats for the local market since 1998, but is about to ship its 150th Ponam 28 to Japan and the 21st Oyster to Britain.

Toyota markets the Ponam 28, the biggest-selling powerboat in Japan, and British-based Oyster Marine sells the Oyster 53 throughout Europe and North America, where it is promoted as a serious but refined blue-water cruising yacht.

McDell general manager Bill Howlett says the company's shift to contract building was driven by a fundamental change in strategy dating back to the Farr 1020, of which 160 were built.

"We identified the company was well equipped to series-build high-quality yachts and powerboats but not well positioned to market them, primarily because we found it prohibitively expensive to promote a New Zealand brand to European, North American or Southeast Asian markets," he says.

"We began formulating a strategy to identify and convince international companies with strong marketing programmes that we could build their boats more efficiently in New Zealand while maintaining all their brand expectations."

McDell Marine, already comfortable with that concept, was receptive when Toyota surveyed them during the research phase of the Ponam 28 project.

Toyota re-established contact two years later, in 1998, after deciding New Zealand, Australia and Thailand were the most cost-effective countries in which to build their boats.

In the interim, Toyota reviewed the Farr 1020s and Farr MRXs McDell Marine sold in Japan, but Howlett says the commitment to New Zealand was made easier by Team New Zealand's success in the America's Cup and Toyota New Zealand's involvement in that campaign.

Circa Marine and McDell Marine were invited to negotiate a joint contract, in which Circa built the aluminium hull and fitted the engine and McDell built the fibreglass deck and completed the interior and exterior fit-outs.

The contract, valued at $25 million, was for 155 turn-key boats. It has been extended by 20 units and it is likely Toyota will want more.

Although orders of this magnitude provide a measure of security for the company and its staff, and marketing expenses are eliminated, Howlett says other issues come to the fore, such as upfront negotiation and process development costs.

"Even though we considered ourselves skilled production builders we had to lift our game," he says. "We are continually hunting savings to offset market variables, such as the strong Kiwi dollar.

"But because the economics of what we do only work for a premium product, clients' specifications can't be compromised. Attention to detail and stringent quality control must be maintained."

Howlett and company managing director Kim McDell were pitching the company's series-building strengths to North American companies when Oyster appeared on the scene.

Oyster Marine managing director Richard Matthews, contacted the McMullen and Wing company about the possibility of building in New Zealand, and McDell was recommended.

Matthews recognised McDell as a competitor in international yachting competitions. The Toyota contract provided a heavyweight endorsement, and whirlwind negotiations began to build the Oyster 53.

In the process of building 21 of these multimillion-dollar yachts, McDell's relationship with Oyster has moved beyond that of a contract builder.

Oyster trusts Howlett and McDell to host their clients on site, and last year they jointly organised a four-day regatta for 14 Oyster yachts visiting Auckland.

McDell says building good relationships with customers, staff and manufacturing partners has been an important ingredient in the company's success.

"Trust and respect are fundamental to a flow of orders, although relationship development is not so much about working on the friendship but on performing up to expectations," McDell says. "We have forged strong friendships and they are leading to new projects."

McDell could not elaborate because the client wishes to make an international release next month, but he confirmed the latest contract is with a major brand and the company bid against four European yards to secure the prototype, tooling and production elements.

Although the company is doing well for orders, Howlett says there is no room for complacency.

"Anything that increases our costs compared to the international competition is a major threat. While strong relationships and reliable performances have been the cornerstones of our success, it is essential we keep manufacturing costs competitive."