Thursday, May 31, 2007

NorthStar Heads to China

Several builders are starting to market their boats in China, and a handful have partnered with shipyards there to build their yachts, but NorthStar Yachts is taking the concept in a different direction. It's packing up its entire operation in Kalama, Washington, and re-establishing itself in the country of the Great Wall.

Why such a drastic move? In a one-on-one meeting last February, Keith Huzyak, president of NorthStar, told me that it’s just become too expensive to continue being a semicustom builder in the USA due to insurance costs and various requirements of the U.S. Coast Guard, OSHA, the EPA, and other agencies. On top of that, there’s the cost of acquiring machinery and other items the Kalama facility has never had, such as an overhead crane to move things more easily around the shed and a rail system for launching.

That’s why in May 2006, NorthStar started investigating yards in China. While Huzyak and the other principals met with 15 yards, they signed an agreement with yet another facility—one which would permit U.S. ownership and operation, he stressed, thereby avoiding the need to train an entire workforce and potentially creating a competitor down the road. Jerry Clark, the COO of NorthStar, and other department heads will be based in China and overseeing everything. In addition, NorthStar is retaining another group of department heads to remain focused on servicing its yachts; they’ll split their time between China and the USA. (Northstar is keeping its purchase department in Kalama to acquire and ship items not readily available in China.)

As for the yard itself, it’s in Zhu Hai region, in the Pearl River Delta, near Macau. It already has a 5-axis CNC mold and has been using computer-aided design and resin infusion on ferries and patrol boats.

NorthStar began shipping gear overseas in April. We’ll keep you updated on its progress, which as you can imagine is being followed closely by buyers and competitors alike.

No comments: