Taiwan builds first steel hulled megayacht

Jade Yachts Shipbuilding, based in Kaohsiung, is to deliver the first ever Taiwan built steel super yacht representing a technology breakthrough and milestone in the nation’s shipbuilding sector.

“We hope to take the shipbuilding industry in Taiwan to a higher level in terms of quantity and quality,” Jade Yachts chairman Han Pi-hsiang said. Han is also the chairman of Jong Shyn Shipbuilding Co, the parent company of Jade Yachts and the nation’s largest private shipbuilder.

The 26.46 metre Bandido was built for Drettmann GmbH, a Germany-based boat agent, and has a steel hull and aluminium superstructure and took 12 months to build. “The Bandido is an upscale European quality model,” Dave White, a marine engineer at Drettmann, said. The good quality of the product has prompted Drettmann to place orders for another four similar vessels. Having worked with Taiwanese shipbuilders for 12 years on more than 30 boats, White said that Taiwan is well-positioned in the business given a favourable climate, hard-working labourers and high production flexibility.

This Bandido will be shown at the 38th International Boat Show in Dusseldorf, Germany in January next year. The annual week-long show at the Dusseldorf fairgrounds is the world’s largest boat exhibition and attracts hundreds of exhibitors from 55 countries and several hundred thousand visitors.

Prior to the Bandido, Jade Yachts made its mark by winning the contract for converting a 64.60 metre vessel into a luxury yacht for a daughter of French fashion-house Bernard Arnault, chairman and chief executive officer of LVMH Moet Hennessy Louis Vuitton.

The deal was significant at the time because Jade Yachts, having just started up in business, had no experience in making steel yachts. The firm outbid its rivals by offering to complete the contract at a cost of $914,000 and delivering the mega-project in two years. This was some 30% lower than other competing bids for the project, leaving Jade Yachts with very little profit margin. “We took it as a great opportunity to learn and made it a head start for our future business,” Han said.

Although the yacht — with more than 10 suites, along with a gym, restaurant, swimming pool, movie theatre, restaurant and other entertainment facilities — was only 95% completed by Jade Yachts owing to some dispute with the owner, the resources and investment in this project paved the way for follow-up orders.

Besides pumping more than $24.5 million into a new shipyard, Jade Yachts invested heavily in acquiring the technology for making steel yachts. Han said that Taiwan’s comparatively lower labour cost is another crucial advantage, especially now that building costs in Europe are surging as a result of the Euro’s sharp appreciation in the past few years.

As steel yachts are getting more popular, Jade Yachts is on the right track, White said. The margin from building GRP yachts is declining given competition from China, making the transition to high-end products critical, he said. But Taiwan still has room for improvement when it comes to building custom-designed yachts. One quality standard that needs to be emphasized is cleanliness, White said. Keeping a clean working area and staff are important when building yachts that cost more than $10 million, he said.

The shortage of skilled workers is another obstacle that could limit growth in this market, White said.

Yacht building may be a traditional industry, but it has an international perspective, Han said, adding that he hopes to make Jade Yachts a world-class brand name and a guarantee of quality. While other traditional industries have moved to China, Han said he would maintain his roots in Taiwan. “We will keep moving forward and improving our quality so that our Chinese competitors can never catch up.”