Marine manufacturers make headway on the heels of a sluggish economy.
The 2007-2009 recession, dubbed the Great Recession, caused major hardships for numerous businesses and industries. Many companies within the marine market struggled to stay afloat. The U.S. recreational boating industry suffered its worst contraction in nearly 50 years, which caused a number of bankruptcies among industry suppliers and dealers, according to The Freedonia Group study, Recreational Boating.
But the market is looking up. According to the Lucintel report, Global Recreational Boating Industry Analysis and Forecast 2010-2015, annual sales for recreational boats are projected to reach $27.8 billion by 2015. Marine manufacturers that persevered through the hard economic times point to three main reasons why – and look forward to a brighter future.
In 2008 as the recession gained steam, marine companies were faced with deciding the best way to maintain business. Some opted to move into other markets.
One of those companies was Marine Concepts, a composites tooling and fiberglass parts manufacturer in Cape Coral, Fla., that supplies everything from large hulls to small detailed parts. In the mid-2000s, it tried to diversify into truck parts, aerospace, wind energy and other markets. But marketing under the Marine Concepts name was tough. In 2005, the owners opened a sister company, JRL Ventures Inc.
“We regrouped and revisited each market, but this time as JRL Ventures,” says Matt Chambers, president of JRL Ventures and Marine Concepts. During the recession, the companies spent several months focusing on non-marine work such as business in the wind energy and simulator sectors.
Ian Kopp, president and COO of Maritime Marine Group LLC, in Augusta, Maine, also believes that diversification was the key to maintaining his company. “Boat-building makes up about 25 to 30 percent of the overall revenue, while technically advanced composites products for renewable energy, government, military and other industries make up the balance.”
Despite the declining economy, diversification didn’t prove necessary for Viking Yachts, a privately-owned company in New Gretna, N.J. “In November 2008 – as the recession was taking off – we launched a new flagship, an 82-foot convertible yacht priced at $6 million,” says Pete Frederiksen, director of communications at Viking Yachts. In July, the company delivered its 22nd hull.
Introduction of New Products
Adding product lines is essential to the growth of a company. Customers want to feel like they are investing in the highest quality boat or yacht. According to Chambers, when the marine market picked up after the recession, overstocked inventories and the used boat market inventories sold first. “As those products started to deplete after 2010, new product demands started to show life,” he says.