“A Boat Building perspective on challenges and Industry growth”

14 April 2014

Vanessa Davidson CEO

MIASA

• Established in 2011 (previously represented by CTBi) • Nationally represents the boating value chain, from design to manufacture,

to sale, to mooring, to boating activities • Membership of ICOMIA (International Council of Marine Industry

Associations)

• Membership of ABYC (American Boating and Yachting Council) which works on industry development and skills training globally

• Board members of IMCI (International Marine Certification Institute)

• Chairman SABS TC 188 (small craft and life preservers)

INDUSTRY OVERVIEW

• Directly employs about 3200 people in boat building • Produces goods and services valued at R1.2 billion

(excl commercial) • 85% is located in the Western Cape • 90% of production is exported • Second largest producer of catamarans globally • Growing commercial boat/ship reputation • Globally competitive (numerous international “Boat

of the Year” awards) • Major growth potential (Africa, commercial)

IPAP

• Boat Building Skills Development Programme • Industrial financing • Designation of working boats for public

procurement

POSITIVE TRADE BALANCE

COMMERCIAL GROWTH

VALUE CHAIN

• Expanded considerably in the past two decades • Industry growth from 4 builders in 1994, to 75

builders in 2010, and 68 builders in 2013 • Growth of commercial and job creation significant • Broad value chain including manufacturers,

importers, retailers, suppliers and allied services • The number of suppliers to a manufacturer ranges

between 5 and > 150

DIVERSITY OF SECTORAL NEEDS

• Recreational vs Commercial • Monohull vs Multihull • Sail vs Power • Trailerable vs non-trailerable • Inland waters vs Ocean going • Boat vs Ship • Manufacturing material • Manufacturing methodology • Manufacture and Repair/Service • Production Build vs Custom Build • Regional variations

COMMONALITIES

• Manufacturing space close to the water • Launch facilities • Cranes/Travel lifts/Slipways • Commissioning /mooring facilities • Space for shoreside support services • Longevity of tenure • Reasonable costs and escalations • Trained and experienced personnel • Labour rates that accurately reflect work

CURRENT SUCCESSES

• Well positioned international brand for SA built catamarans

• Proven track record and international recognition • Growth of the commercial sector (military and

private) • Strong global position • Innovation driven by passion and entrepreneurship • Customisation

BROAD INDUSTRY CHALLENGES

• Protracted engagement with TNPA (1994, 1998, 2002, 2005, 2007, 2010)

• Cyclical build and fluctuating demand • Infrastructure • Competition vs Collaboration • Labour rates/productivity • Cash flow issues and organisational capacity • Transformation • Skills and enterprise development • Lack of progress on industry identified priorities (COFISA

report 2008)

SPECIFIC CHALLENGES

• Manufacturing space close to the water Availability (up to 20 000 sqm for one commercial) Cost Tenure Permits/restrictions Escalations Type of manufacturing Closed/open Multipurpose user conflict

SPECIFIC CHALLENGES

• Launch facilities

Access for monohulls and multihulls from roadways Permits Shoreside infrastructure (containers, forklifts, equipment, staff, storage, offices) Draft Protection from weather Multi user demand and scheduling

• Cranes/Travel lifts/Slipways • Commissioning /mooring facilities • Space for shoreside support services • Longevity of tenure • Reasonable cost escalations • Trained and experienced personnel • Labour rates that accurately reflect work

SPECIFIC CHALLENGES

• Commissioning /mooring facilities Availability (port and private) Cost No fixed arrangement/user conflict Weather protection Access for mast stepping Metal and industrial pollution (recreational GRP)

SPECIFIC CHALLENGES

• Cranes/Travel lifts/Slipways

Floating dock (cannot wait for fixed infrastructure availability - commercial) Travel lift (500t for commercial, 30t for recreational – width critical) Cranes for mast stepping (high reach) and keel installation Synchrolift (commercial and recreational) Investment tenure

SPECIFIC CHALLENGES

• Space for shoreside support services • Trained and experienced personnel • Labour rates that accurately reflect work (GRP)

GROWTH OPPORTUNITIES

• Commercial and military craft - Africa • Custom build recreational boats (large) - International • Steady market demand for catamarans (power) • Superyacht re-fit - International • Cruising boat maintenance and repair – International • JVs with International yards constrained by space

Weaker ZAR Labour intensity/jobs Increase local content Leverage off South Africa’s geographical position Accelerate decision making Transformation

GROWTH OPPORTUNITIES

Port Elizabeth • Mandela Bay Composites Cluster • Land

GROWTH OPPORTUNITIES

Durban • Strategy in place • Shoreside build and repair facility with SMME

clustering

GROWTH OPPORTUNITIES

Cape Town • Commercial and recreational export growth • Dry dock and synchrolift • Superyacht re-fit • International yacht races

NEW ZEALAND

‘Destination New Zealand Superyacht Attraction Initiative’ A partnership between Tourism New Zealand, Auckland

Tourism, Events and Economic Development (ATEED), New Zealand Trade and Enterprise and NZ Marine have an active campaign to attract superyachts to the Pacific nation.

USA

Mod Marine Centre, Ft Lauderdale

CLOSING REMARKS

• Multi-faceted approach (one size never fits all) • Optimise Resources • World class facilities • Foreign Investment • Integrated artisan development programme • National strategy • The reality of SMME operations • Red tape/policy/decision making • Government inter-departmental engagement • Unintended consequences and mitigation • R&D and design innovation • Reproduction

THANK YOU

Securing our Future Strengthening our Future

As Boat Builders Globally

Vanessa Davidson vanessa@miasa.co.za

072 8363998