Flagship: Henk de Vries on building through a boom
If you (pandemic restrictions permitting), walked into any shipyard or brokerage over the past 12 months there’s a chance you heard talk of unprecedented demand, refit craftsmen at full tilt and not a slot to be seen until at least 2024. And there’s little sign of let up.
It’s almost getting repetitive, but the reality is just that. Demand for new builds and refits is unprecedented in renowned shipyards right now. In more than 30 years in the superyacht industry Feadship’s CEO, Henk de Vries has never seen a period quite like this.
“For the Lurssens, Abekings, Amels, Feadship [etc.] everybody is busy, brokerage is good for good products. Price levels are okay, but supply is getting more expensive more quickly, so there is a squeeze on margins even though the actual sales prices go up,” de Vries tells Superyacht Investor.
The challenge over the coming year and on will be one of control, says de Vries. To not hastily accept all business offered to realise later you don’t have the resources to fulfil it. That’s why after record years in 2020 and 2021 in terms of new builds, Feadship is taking its foot off the gas a little. The yards delivered six yachts in 2021 and have more than a dozen projects on the books. Average production is four, maybe five, each year.
“Profitability was suffering a little because we were scrambling to get all these boats out. So in the coming years we are certainly not slowing down much, but we are actively trying to control output and keep the flow constant,” says de Vries.
Today if you were to request a new build slot from Feadship for a reasonably sized yacht (under 3,000GT) you are going to have to wait around three to four years. Whilst this is slightly longer than normal for buyers, it also presents a challenge for Feadship. When you contract at a fixed price and the delivery point is four years out, how do you predict cost increases over such a long period?
“For the big projects that is super difficult at the moment,” says de Vries. Cost increases could also lead to supply issues, take a look at the automotive industry. For Feadship there has been no such problem. “But for high-tech components, even washing machines, the delivery time is terribly long. But that only plays a role in the boats we physically have in build.”
As an outspoken supporter of sustainable operation and chairman of the Water Revolution Foundation, sustainability is a key driver of de Vries’ vision. He used the small lull in activity in March 2020 as an opportunity to push sustainable yachts into the market. “Now almost all of the projects we have signed up for are electric-drive, still with mechanical power making electricity, but it is easily upgradeable.”
Feadship is also now encouraging the use of HVO, an organic biodiesel, which offers up to 90% reduction in carbon dioxide emissions over its lifecycle. de Vries says the company hardly offers a conventional drivetrain as an option, even though it is sometimes requested. “And we’ve not lost business. So we are making the mark. There are still a few conventional boats in the pipeline, but they are quickly becoming a minority,” he says.
De Vries is already thinking ahead to the next generation of yachts. After decades of use diesel has assumed the title of conventional power, the new generation of yachts uses electric drivetrains and, where possible, biofuels. But de Vries is planning for the next phase. Although it is unclear exactly what shape it will take, he thinks it could well be methanol-based hydrogen.
“The state-of-the-art should be developed with existing elements. Albeit not to scale yet, instead of diesel you stick methanol in your fuel tanks,” says de Vries. “Methanol has a power density around 25% less than diesel so your range will drop. In principle you can burn the methanol in your diesel engine with some modification. That is what Maersk is doing in its container ships.”
If you are converting a vessel which uses diesel engines to create power for an electric drive, step one is to replace the diesel storage with methanol tanks. Step two is to run the methanol through a reformer, which is a small processing plant. The reformer does not exist yet in the scale required for a yacht. When the technology does exist (he thinks in between three to six years) you put in methanol and out comes hydrogen. Finally, you run the hydrogen through a fuel cell which can cope with hydrogen that isn’t 100% pure.
An advantage is the loss in range incurred due to the methanol would be more than offset by the 70-80% efficiency typically found in the fuel cell. Optimum efficiency from a combustion engine is 25-30%. de Vries expects the technology to be on the market around 2027-2028. He believes his clients, and superyacht owners more widely, can aid development.
He adds: “Being innovative thinkers and also looking at the value of investment, some of my clients are keenly interested to pursue that reformer fuel cell, electric drivetrain technology together with us.”