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The recent international boat show held at the Cape Town International Conference Centre attracted 125 exhibitors. Around 12 500 people attended the three-day exhibition. Boats worth at least R20m were sold and, according to the organisers, sales valued at a further R50m could flow from the show.
Informed sources say that SA's boat-building industry has grown by 120% since 1994. However, it's especially Cape Town that's at the bow of that activity. About 85% of SA's boat building takes place in and around Cape Town.
SA Boat Builders' Business Council MD Bruce Tedder says that the 3 200 jobs now provided by the industry could at least double by 2010. In Cape Town alone, it currently accounts for 2 700 jobs.
Though the industry in SA builds less than 1% of the world's boats for the recreation and tourism markets, it's making its presence felt in building luxury catamarans and is now second only to France as the biggest manufacturer of this class of vessel.
Around 65% of the content used in boats built in SA, which sell at an average price of US$350 000 (R2,2m), is local. Around 90% of boats are for the export market and sold to France, Germany, Britain, the US and the Caribbean islands.
Tedder says that there are various reasons for the strong growth in SA's boat-building industry, such as the terrorist attacks in the US on 11 September 2001 which have made Americans hesitant about flying and now prefer to travel near home by boat.
Another reason is the increasing trend to buy boats as investments. People buy boats and then make them available to a leasing company, such as The Moorings, which has international networks and around 700 boats under its banner. In terms of this scheme, which works almost like timeshare, the company leases the boat on behalf of its owner and returns of 10% to 20% are guaranteed.
Several initiatives have been introduced since last year to strengthen the industry. These include SA's first boat-building academy. Courses will be offered at the academy near Cape Town from next year, and formal qualifications can be acquired.
Robertson & Caine deputy MD Baren Smit says the company, with a turnover of R110m, will build 70 boats this year, with 77 in 2006. Their owners will make most of them available to The Moorings, so that they can be leased.
Says Smit: "As an investment opportunity the industry is still in its infancy in SA." But it's definitely growing. In the past, only two boats/year were sold to South Africans. But this year's figure is already six.
A problem in the industry is suspicions by the European market concerning boats made in Africa. To counteract that trend SA boats are sold for around 10% less than in Europe.
Veecraft Marine marketing head Jack Rivers says that SA is regarded as a very good testing region for boats, because of its stormy weather. In addition, the largest testing tank in the southern hemisphere is housed at the University of Stellenbosch, where boat models are tested.
Veecraft designs and builds more than 20 boats for countries in Africa, four for countries in the Middle East and two for SA's National Ports Authority. The company will earn around R100m from these projects.
SA's boat-building industry gives a ripple effect to other industries, such as moving boats and upholstery and woodwork below decks, which is worth R1bn/year in Cape Town alone.
Rivers says that in favourable world economic conditions Cape Town could build boats worth R3bn over the next five years. However, that requires an improvement to the logistics infrastructure, such as Cape Town's harbour, and realistic import taxes on components from overseas. Copyright on boat designs will also have to be addressed, as there's currently nothing stopping someone overseas from copying SA's boat designs.
