JOHN LU IS CEO OF TAIWAN BASED HORIZON GROUP AND CHAIRMAN OF THE TAIWAN YACHT INDUSTRY ASSOCIATION.
Horizon Yachts was set up 24 years ago in a small factory to build a 40ft motor yacht by current Group CEO, John Lu.
Today it is a multi million dollar business with over 800 staff, has a global market and is divided into three brands; Horizon, which build 70-120ft plus specialist craft, Vision which look after smaller models from 40ft to 70ft and Premier, the super yacht arm which is alongside the water on Kaohsiung and builds boats 100ft- 160ft. Plus there is the company’s composite arm, Atech Composites which handles all the laminations for all the group.
Although capable of building upwards of 50 boats a year, they currently have around 30 under construction within the Horizon Group, ten of those in the Horizon yard alone and including a 58 powercat, Horizon 88,94,97 and 106, an EP66 plus at the Premier yard a 110ft and 148ft, with a 130 in the water under going final sea trials. To follow was another 130.
Barry Thompson talked to John Lu about the company’s future and how it has come through the GFC.
When did Horizon Yachts start?
I started the company in 1987 and the first boat we built was a 40-footer. I had a background in marine engineering and a vision for an international shipyard, building boats for a global market.
How has Horizon come through the GFC?
We tried to maintain the strengths that we have, so we didn’t have to make many changes to our staff or facilities and continued through with more emphasis on the R&D, as we had the time and the manpower to devote to this due to the downturn in orders. We also did some work on improving our own facility in readiness for the revival of the business in the future.
How do you see the future?
I have a positive feeling about the future and appreciate that we have been through a very difficult period, but things will change and the GFC will be behind us. I always look ahead with a positive attitude and that’s really all you can do. What’s happened has happened and you must look at the future and be ready to embrace whatever it brings. We want to certainly be at the forefront of any recovery.
Do you see any upturn now?
Yes there is a little and we have had a noticeable increase in interest from the US, but right now most of the enquiries and accordingly sales have been in Australia. Australia is a very important market for us right now and currently we are building five boats from 60ft to 97ft and recently delivered the first Horizon 70E.
The Asian market, including China, Japan and Australia in general is showing positive growth signs. Europe is still very slow and I see this still taking some time to recover. I think the US market will pick up before Europe.
Has there been much impact on your sales from Chinese boatbuilding yards?
Yes, there is a little, but I think it is still to come and will take a bit longer for the yards to achieve the same quality and efficiencies as we have at Horizon. The Chinese market is very price focused, but there are those that like the
top end quality product so that’s where we feel we have an edge on our Chinese competitors.
We build totally for export and that’s a big difference, whereas many of the Chinese yards also have a domestic market, which is very different from boats that are built for a global market.
Who are your major competitors?
I would say that the European builders, especially the Italian yards such as Ferretti and Azimut would be our strongest competition. But there are always builders trying to compete in any of our markets, be it Australia, the US or Europe, that build a similar style of boat and may appeal more to a client. In the end we just have to build the best boat we can for the right price and still offer the highest quality possible.
We have a strong position in most of the major markets in the world so we are certainly recognised as one of the world’s leading brands in the models we build.
How important is quality?
A decade or two ago boats coming out of Asia didn’t generally have a great name for quality, but that’s all changed. In order to survive in a global market you have to embrace the latest technologies and building techniques and produce a boat that is the equal of anything worldwide.
Through our R&D department we have established a very solid foundation for the past 10 years or more. At Horizon we place a major emphasis on quality, so much so that we have our own laboratory with dedicated engineers who evaluate all the composite materials before we put any into our boats. We have been strong advocates of the SCRIMP process for many years and also place a huge emphasis on installing only the very best hardware and engineering.
What future do you see for the superyacht market in Taiwan?
There is a change, but it’s not going to happen in a hurry. We have been building boats over 30m for some time now, as have other Taiwan yards, so in time we will be better recognised for what we can produce.
As far as production boats over 30m go, we are the only builder in Asia in that business and I see this as a developing market for us. There is less competition in that market.
Is there to be any expansion of the EP series?
Yes, there are plans to do that but we want to wait and see how the market accepts the models we already have and that will determine whether we go bigger or smaller in model sizes. We are developing entry level models, such as a new EP54.
What is the overall future for Taiwanese yards?
If you are talking about the short term future I would say things will not change much and there may even be a few that retrench or even close, with boats built by contract builders at other yards. However, long term, yes, I see plenty of potential for growth, because this is a good environment and a good place to build boats. Our labour costs are competitive and while a lot more than China, the tradesmen we have are so skilled and efficient in what they do, the end product is just that much better.
What is your current production?
Obviously not what it used to be. The best year was 2008 when we finished 50 boats. Today we are looking at around 30 boats so the downturn has not been as dramatic as some of our competitors in places like Australia and Italy. You also need to understand that the average size of the boats we are now building has got bigger, but we could comfortably built over 50 boats a year over 20m. We just need the orders!
Do you place importance on boat shows as a way of brand promotion?
Yes, they are very important. You have to be there to show the potential clients that you are a major player in the market. We attend most of the major shows, such as Miami, Ft Lauderdale, Dusseldorf and of course Sanctuary Cove and have a large display with the best of our models.
Why the move into powercats?
We have been looking to expand our range and power cats seemed an obvious way to go as there isn’t a huge amount of competition and it’s a growth market worldwide.
It’s something new for us and along with our solar boats it’s a whole new direction for the company.
The solar boats are something very personal to me as I have always liked a challenge and the solar boats seemed a neat thing to do. We have sold a number of the smaller boats and it is an area that we intend to develop more in the future.
What can we expect from Horizon in the future?
You will see we are going to play a very serious role in the world market. There will be a continual process of new models coming through the product range as well as improvements on existing models. Horizon is expanding its operations as a company and we now have our own offices in Spain, USA and Singapore and are looking at China and Japan in the future.
The Asian market is growing and it’s definitely bigger than it was just two years ago and while we will still be concentrating heavily on our European, American and Australian markets, Asia is something we certainly will be observing closely.