Ocean Alexander: Mundy on cadence and disruption
Ocean Alexander's Dan Mundy is looking beyond trade wars and tariffs.
He describes himself as a marathon runner, not a sprinter which is why Dan Mundy is looking beyond the turmoil of trade wars and tariff turbulence.
Mundy, the global operations director for Taiwanese yacht builder Ocean Alexander, has seen it all in a 40-year career and describes the various pronouncements by the Trump administration as “a great marketing opportunity to grab airtime and capitalise on a news cycle”.
Political and market noise should not be mistaken for official legislation, he says, believing that “things do play themselves out”, although he says that “very cautiously”.
“You have to take it day by day,” he tells Superyacht Investor. “Right now, I don’t put any of this geopolitical disruption as being of high concern. But you never know what somebody’s going to think of tomorrow. These are complicated world issues that must be carefully worked through to find harmony in world trade.”
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Mundy talks of how world events, including oil embargoes, dot com and real estate bubbles, recessions, 9/11, and war cause “uncertainty” which “disrupts the necessity” of buying a superyacht. Conversely, he says the global pandemic turned out to be a “gift from unprecedented news”.
But in terms of tariffs directly affecting the superyacht industry, Mundy believes “our world is a little insulated right now”.
“The financial strategies of the people that utilise them are generally offshored anyway,” he says. “So I would say the superyacht business really isn’t in as much of a flux as a lot of people perceive that it might be, but I would never say that in a flippant way.”
Strong cadence
Ocean Alexander produces about 22 superyachts a year in the 27-44m range from its Taiwan manufacturing base with about 80% of the market coming from the USA.
“Our cadence and our momentum is very strong,” he says. “My future outlook is very positive as well.”
He puts his confidence partly down to Ocean Alexander’s “unique” structure, which has evolved over the years since it was founded by Alex Cheuh in 1978. Cheuh’s son Johnny is now at the helm.
Rather than a factory direct model, the company operates a series of dealerships, including Alexander Marine Australia, Alexander Marine USA, which takes care of the western states, and MarineMax as a dealer for the east coast.
“There is no opportunity in the US to buy an Ocean Alexander factory direct,” says Mundy.
High risk, high reward
Two service companies, East Coast Yacht Group and Pacific Coast Yachting Services then take on the commissioning and after-sales service. The latter also commissions for other shipyards “to capitalise on the greater market”.
“So we never lose focus on our objectives,” says Mundy. “We have manufacturing that we’re controlling, we are controlling distribution along with one outside entity being involved in that. And then we control the service side of that business as well.”
Ocean Alexander will have at least four to five yachts in build – “not terribly unique in their design cues” – that are unsold to provide current inventory, courtesy of additional capital available as a listed company on the Taiwan Stock Exchange.
“We run manufacturing as though it’s a nonstop entity,” says Mundy. “Then we run distribution and sales as though it’s a nonstop entity. And so the cadence of the two pretty much have to be in lockstep with each other.”
Mundy describes the need for inventory as a “critical discipline” for the business.
“There are people who want a $15-30m superyacht and they don’t want to wait two-and-a-half years to get there,” he says. “Sometimes, if I have the right product, I can satisfy that appetite within six months. And I have a 37m and a 35m that you could take delivery of within 10 days’ time.”
He adds: “For any shipyard to put up $100m in capital is definitely a high-risk, high-reward proposition. But as a luxury brand we’re able to leverage our branding efforts and our reputation pretty skilfully to make sure that we don’t have inventory problems.”
Love-hate relationship
At the beginning, Mundy was “in the right place at the right time” to buy a boat dealership in Colorado soon after college. He expanded from there, folding his multi-location network of Sea Ray dealerships into MarineMax, which he helped grow to $1.3bn in annual revenue before retiring from the company in 2007.
When he first joined Alexander Marine USA, he was intrigued to explore the wholesale side of the business.
“There is this love-hate relationship that exists between manufacturing and retail,” he says. “They both need one another, but the manufacturer feels that they can sell better, and the retailer feels that they can build better.”
The key, he says, is “understanding the complexity of the two” and combining them in an “extraordinarily harmonious relationship” to avoid “arm wrestling”.
“I saw a company in Ocean Alexander that hadn’t tapped into its tremendous potential,” he adds. “In my world and in this business, good is never good enough. It is the constant pursuit of making sure that we never miss.”
Pain points
Ocean Alexander’s range of yachts – L-Series, Puro and the R-Series – are designed to cater to a broader pool of clients under one brand. To stay ahead of the curve, Mundy studies and has direct involvement in external industries such real estate, design, aviation, banking and the automobile industry to see what factors are influencing decisions. Even changing behaviours, such as remote working because of Covid, are cues to adapt.
“You have to pay attention and be constantly focused,” he says. “How can I integrate that knowledge into a yacht, or the industry, is an interesting challenge.”
Away from world events, Mundy’s “pass-through pain points” are people and the increasing lack of infrastructure for large-scale yachting.
“The human capital side of it will always be a challenge,” he says. “Societally, the evolution of what work is, is challenging when it comes to the crew. And trying to find the next generation of labour-centric talent is certainly a direct pain point for me.
“Taiwan is known for the very high-quality semiconductor chip business and technology that is basically taking away a tremendous amount of the young and upcoming talent. When you employ thousands of people like we do, it’s definitely not for the faint of heart.”
Issues aside, Mundy describes yachting as an “amazing business”.
“I find it fascinating, because it’s an industry that really doesn’t have a tremendous amount of structure around it,” he says. “We live in a world of rarefied air, building these beautiful creations that are certainly exhausting in one part, but fulfilling in the other. You just keep pushing envelopes and you find new boundaries.
“If there is a driver that gets me out of bed, it is, how am I going to not only advance Ocean Alexander, but how am I going to advance the industry and make a lasting impression?”
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