Yachting Industry - In pole position
As the yachting industry revs up, in Malta as in the rest of the globe, Melita Marine Group's vision is focused on one objective - to be ahead of the rest, with honours in all-round seamless service to the boating community throughout the Med. The Times Business interviews chairman Pierre Balzan
Pierre Balzan has a group portfolio to manage which has grown wide enough for a relatively young operation that would sometimes seem to require a number of clones thinking and acting at the same time to function.
This makes him difficult to pin down and get his undivided attention.
Yet, like a seasoned sea captain, he steers the wheel without ever losing track of the coordinates, rain or shine, giving the reassurance that all is well and in full control.
But the waters he navigates far from lend themselves for any plain sailing. An industry registering rapid growth and turning over the pockets of the rich and famous, the yachting business is cutthroat to the point that it may only take one distracted manoeuvre to find that you not only have missed the boat but that you are out of the race completely. The Melita Marine Group, marina operators and marine service providers throughout the Mediterranean, today boasts 17 subsidiary companies offering yachts of any size the full range of services, from yacht refits, to marina management, fuel supplies, yacht/charter brokerage and supplies and representation of some of the most reputable yacht brands. Each company fulfils one particular specialised service.
Over a brief period, Mr Balzan has covered ground which now finds him positioned at a point of meaningful advantage. He attributes this to one focused strategy - he will only go on board operations when the forecast is favourable, with sails close to the wind.
"The inroads I made were mapped out on the same tried and tested formula - I analyse the business regularly for a reading of where the industry is going and what services are available, or lacking, on the way," says Mr Balzan.
"My strategy has always been to tap the under- or ill-serviced patches and remap my route accordingly. This is what has taken the group places, with a reputation that we can take any yacht owner or captain through the Mediterranean with peace of mind as whatever the need or urgency we are equipped for it through our offices, under one name, throughout the whole Mediterranean region."
Mr Balzan established Melita Marine in June 1989, inheriting a nose for business, and the subject industry in particular, from his grandfather. "The idea of a big yacht then would not exceed 30 metres, quite a considerable number of metres down from today's yachts which can go up to 150 metres.
"However, even in those days the industry was already in evolution and after calculating risks with my uncles in the ship repair business I decided this was a shot I needed to fire, offering agency services to any size of yacht entering Malta through agreements I established from time to time with yachtsmen," said Mr Balzan.
What started off like drip-feed back then, to fill in blanks neglected by other providers with a consistent service, developed into a healthy bank supplying any feed on demand.
"During these hard-working years of our history, I analysed the services that were lacking from our competitors and how I could improve my company by reinvesting in a new service or product to offer the quality and commitment I had in mind," he said.
"This led to the opening of our first office in Italy in 1998, right in the centre of the Italian yachting industry - Viareggio.
"When I left on this particular journey, the feedback was that the path undertaken was so arduous I would have only survived a year. But responsible determination brought us to our position today, operating our own offices in major Mediterranean ports.
"It was also evident to me when Malta was in the process of entering the European Union, that while the country was doing well in the yachting industry, additional investment was required to find us prepared to compete with larger companies in the sector.
"So the idea came to mind that we should have our own marketing network to continue expanding our operation in Malta and in the rest of the Mediterranean. Melita Marine is one of two companies in the region to own and manage its own offices to service the yachting industry."
Melita Marine has its own offices in major harbours around the Mediterranean coast - Italy, Sicily, France, Tunisia, England and Croatia - and is developing others in Spain, Sardinia, Turkey, Greece, Cyprus, Egypt and Gibraltar.
The number of direct employees on the group's payroll stands at 149. Hundreds of others are either sub-contracted, outsourced or commissioned to carry out the many jobs and services offered under the Melita Marine portfolio.
The company has recently announced the completion of a restructuring exercise to reorganise its operations and consolidate business in Malta and across its vast owned Mediterranean network in preparation for long-term growth and new acquisitions in the yachting industry.
"It had become evident to the administration that with the growth of our client base and turnover, more control over quality and speed of processing orders and delivery of service had to be obtained in addition to the original personalised service policy the Melita Marine Group had in its early days of operation.
"Heads have been appointed for all the individual divisions of the group to implement the expanding programme which will lead to the further growth of each subsidiary and a more direct and personalised service to the client," said Mr Balzan.
How Malta fits into the big picture
Based on statistics received, the yachting industry has simply begun scratching the surface of growth. It is estimated that just in the Mediterranean there will be more than 8,000 super yachts in movement by 2010.
"Compared to the figures of a few years ago, this is more than double," said Mr Balzan. "This means that the super yacht industry graph will continue to rise as the volume of high net worth individuals grows globally. These super yachts need to be serviced and berthed, so, in my opinion, the future is bright for any serious organisation in the industry.
"Malta should have a very important role to play in this scenario. Situated in the centre of the yachting world, the country is slowly developing the service industry to meet the quality required to accommodate super yachts which are always increasing in size. More berths are needed in different locations in Malta, possibly starting with the Sliema Creek and then Gozo. Different government entities and the local yachting industry need to come together, combining their expertise to charter a way forward.
"Over the last year, a growth has been registered in larger yachts berthing for longer periods and for more substantial service lists and projects. Malta is English-speaking, which is an advantage in the sector, and has a skilled workforce, but it needs further upgrades. I strongly believe Malta can be developed into a structured base for super and mega yachts. Friends who are yacht captains or owners have already started investing in property in Malta. The underlying meaning of this is that they intend to base their yachts here.
"In this context, Melita Marine strives to keep in line with this growth in the industry and it is our intention to invest further in marinas, yacht 'yards and service centres to meet the demand generated by the growth predicted," said Mr Balzan.
"We will also be expanding the type of services offered in Malta and elsewhere, where the group is involved, in areas where we feel there in not sufficient expertise and/or the level of service is not one that meets our criteria. Our management also recognises the fact that our people will have to be trained to keep abreast of new technology and up with the continuous up-ratings of the yachting industry. This will require capital injection of hundreds of thousands of euros and possibly millions over a number of years."
Mr Balzan said Malta's small size is an advantage rather than a handicap. "Malta is unique in this sense. Super yacht crew are likely to find all they require in a concentrated area and do not have to travel long distances or relocate the yacht to obtain the service. Malta is already well-positioned to offer a good level of service. Compared to other high-profile destinations, I would rate the Maltese infrastructure as medium when it comes to the service offered, but with the right attitude Malta will place top in a relatively short period of time."
Yacht registration is another competitive market where Malta is doing well. "Malta has recently started accepting yachts under the commercial code which brought the Maltese flag flying on the stern of a number of yachts, which is a great ambassadorial representation for the Maltese islands. Through a company we have invested in, Melita Marine Group has also managed to bring in considerable business with interesting numbers in this sector," said Mr Balzan.
Super yacht statistics
• There are currently 3,237 super yachts in the global fleet, excluding those on the order book.
• The global order book for new super yachts over 25 metres stands at 445.
• By 2010, there will be more than 8,000 super yachts over 25 metres. 50 per cent of these will be more than 30 metres long.
• Europe dominates the yachting business by 72 per cent of the global market share.
• Italy has the largest portion of the European cake with 38 per cent.
This makes him difficult to pin down and get his undivided attention.
Yet, like a seasoned sea captain, he steers the wheel without ever losing track of the coordinates, rain or shine, giving the reassurance that all is well and in full control.
But the waters he navigates far from lend themselves for any plain sailing. An industry registering rapid growth and turning over the pockets of the rich and famous, the yachting business is cutthroat to the point that it may only take one distracted manoeuvre to find that you not only have missed the boat but that you are out of the race completely. The Melita Marine Group, marina operators and marine service providers throughout the Mediterranean, today boasts 17 subsidiary companies offering yachts of any size the full range of services, from yacht refits, to marina management, fuel supplies, yacht/charter brokerage and supplies and representation of some of the most reputable yacht brands. Each company fulfils one particular specialised service.
Over a brief period, Mr Balzan has covered ground which now finds him positioned at a point of meaningful advantage. He attributes this to one focused strategy - he will only go on board operations when the forecast is favourable, with sails close to the wind.
"The inroads I made were mapped out on the same tried and tested formula - I analyse the business regularly for a reading of where the industry is going and what services are available, or lacking, on the way," says Mr Balzan.
"My strategy has always been to tap the under- or ill-serviced patches and remap my route accordingly. This is what has taken the group places, with a reputation that we can take any yacht owner or captain through the Mediterranean with peace of mind as whatever the need or urgency we are equipped for it through our offices, under one name, throughout the whole Mediterranean region."
Mr Balzan established Melita Marine in June 1989, inheriting a nose for business, and the subject industry in particular, from his grandfather. "The idea of a big yacht then would not exceed 30 metres, quite a considerable number of metres down from today's yachts which can go up to 150 metres.
"However, even in those days the industry was already in evolution and after calculating risks with my uncles in the ship repair business I decided this was a shot I needed to fire, offering agency services to any size of yacht entering Malta through agreements I established from time to time with yachtsmen," said Mr Balzan.
What started off like drip-feed back then, to fill in blanks neglected by other providers with a consistent service, developed into a healthy bank supplying any feed on demand.
"During these hard-working years of our history, I analysed the services that were lacking from our competitors and how I could improve my company by reinvesting in a new service or product to offer the quality and commitment I had in mind," he said.
"This led to the opening of our first office in Italy in 1998, right in the centre of the Italian yachting industry - Viareggio.
"When I left on this particular journey, the feedback was that the path undertaken was so arduous I would have only survived a year. But responsible determination brought us to our position today, operating our own offices in major Mediterranean ports.
"It was also evident to me when Malta was in the process of entering the European Union, that while the country was doing well in the yachting industry, additional investment was required to find us prepared to compete with larger companies in the sector.
"So the idea came to mind that we should have our own marketing network to continue expanding our operation in Malta and in the rest of the Mediterranean. Melita Marine is one of two companies in the region to own and manage its own offices to service the yachting industry."
Melita Marine has its own offices in major harbours around the Mediterranean coast - Italy, Sicily, France, Tunisia, England and Croatia - and is developing others in Spain, Sardinia, Turkey, Greece, Cyprus, Egypt and Gibraltar.
The number of direct employees on the group's payroll stands at 149. Hundreds of others are either sub-contracted, outsourced or commissioned to carry out the many jobs and services offered under the Melita Marine portfolio.
The company has recently announced the completion of a restructuring exercise to reorganise its operations and consolidate business in Malta and across its vast owned Mediterranean network in preparation for long-term growth and new acquisitions in the yachting industry.
"It had become evident to the administration that with the growth of our client base and turnover, more control over quality and speed of processing orders and delivery of service had to be obtained in addition to the original personalised service policy the Melita Marine Group had in its early days of operation.
"Heads have been appointed for all the individual divisions of the group to implement the expanding programme which will lead to the further growth of each subsidiary and a more direct and personalised service to the client," said Mr Balzan.
How Malta fits into the big picture
Based on statistics received, the yachting industry has simply begun scratching the surface of growth. It is estimated that just in the Mediterranean there will be more than 8,000 super yachts in movement by 2010.
"Compared to the figures of a few years ago, this is more than double," said Mr Balzan. "This means that the super yacht industry graph will continue to rise as the volume of high net worth individuals grows globally. These super yachts need to be serviced and berthed, so, in my opinion, the future is bright for any serious organisation in the industry.
"Malta should have a very important role to play in this scenario. Situated in the centre of the yachting world, the country is slowly developing the service industry to meet the quality required to accommodate super yachts which are always increasing in size. More berths are needed in different locations in Malta, possibly starting with the Sliema Creek and then Gozo. Different government entities and the local yachting industry need to come together, combining their expertise to charter a way forward.
"Over the last year, a growth has been registered in larger yachts berthing for longer periods and for more substantial service lists and projects. Malta is English-speaking, which is an advantage in the sector, and has a skilled workforce, but it needs further upgrades. I strongly believe Malta can be developed into a structured base for super and mega yachts. Friends who are yacht captains or owners have already started investing in property in Malta. The underlying meaning of this is that they intend to base their yachts here.
"In this context, Melita Marine strives to keep in line with this growth in the industry and it is our intention to invest further in marinas, yacht 'yards and service centres to meet the demand generated by the growth predicted," said Mr Balzan.
"We will also be expanding the type of services offered in Malta and elsewhere, where the group is involved, in areas where we feel there in not sufficient expertise and/or the level of service is not one that meets our criteria. Our management also recognises the fact that our people will have to be trained to keep abreast of new technology and up with the continuous up-ratings of the yachting industry. This will require capital injection of hundreds of thousands of euros and possibly millions over a number of years."
Mr Balzan said Malta's small size is an advantage rather than a handicap. "Malta is unique in this sense. Super yacht crew are likely to find all they require in a concentrated area and do not have to travel long distances or relocate the yacht to obtain the service. Malta is already well-positioned to offer a good level of service. Compared to other high-profile destinations, I would rate the Maltese infrastructure as medium when it comes to the service offered, but with the right attitude Malta will place top in a relatively short period of time."
Yacht registration is another competitive market where Malta is doing well. "Malta has recently started accepting yachts under the commercial code which brought the Maltese flag flying on the stern of a number of yachts, which is a great ambassadorial representation for the Maltese islands. Through a company we have invested in, Melita Marine Group has also managed to bring in considerable business with interesting numbers in this sector," said Mr Balzan.
Super yacht statistics
• There are currently 3,237 super yachts in the global fleet, excluding those on the order book.
• The global order book for new super yachts over 25 metres stands at 445.
• By 2010, there will be more than 8,000 super yachts over 25 metres. 50 per cent of these will be more than 30 metres long.
• Europe dominates the yachting business by 72 per cent of the global market share.
• Italy has the largest portion of the European cake with 38 per cent.