Cheerful spirits at the Millennium Cup belie the current downturn in the NZ superyacht industry. Over the past 15 years the Millennium Cup has carved out its niche in the world of superyacht regattas, catering for those superyachts cruising or refitting in the Antipodes and Pacific regions.
While it may have fewer competitors than events such as the St Barths Bucket or Palma Superyacht Cup, the Millennium Cup is the only dedicated superyacht regatta in the Pacific region, reputed as a hugely enjoyable event run in beautiful surroundings with great sailing conditions.
This year’s edition saw the regatta held in the beautiful Bay of Islands for the first time. A three hour drive north of Auckland, and centered between the three settlements of Russell, Opua and Paihia, the stretch of water that was to be the race track for the regatta provided a perfect setting with a stunning backdrop.
Building afternoon breezes ensured ideal conditions for the competing yachts in the flat waters of the bay, and the many rocky islets provided plenty of variety for the race committee’s courses.
While the atmosphere at the event was extremely friendly, owners’ and captains’ competitive instincts were piqued and optimum performance was the order of the day.
Fortunately, finding competent and competitive race crew for the Millennium Cup is as easy as making a few phone calls and booking a bunch of hotel rooms. The abundance of local sailing talent, much of which is employed within the sailing industry in Auckland, brings a huge amount of technical expertise and local knowledge to the yachts racing. Professional race crew from international campaigns mixing with local legends produced a wonderful spectrum of skill and experience.
I was talking to ‘Brownie’, one of the Doyle team who was trimming for us on Bliss; in typical understated Kiwi style he mentioned in passing a ‘campaign’ that he was involved with. I later learned that he was referring to the ‘campaign’ where he represented New Zealand sailing at the Olympics.
Typically, superyacht regatta fleets are very diverse and the Millennium Cup was no exception with the 50m, 499 tonne Silencio at the larger end of the spectrum and the 33m, 70 tonne Silvertip at the other.
The usual staggered-start format of racing was used to try to even out this divergence. Under this system, allocated start- times are based on predicted times for completing the course in different wind scenarios.
If every calculation is correct, the system produces tight finish line scraps with all the yachts crossing the finish line almost simultaneously. But handicapping such a fleet was never going to be easy, and most people were not surprised when the 90 minute start- time range on day two, for what was to be a three hour race, did not have the desired effect.
If winning a yacht race on sailing merit is an owner’s main aim, superyacht regattas are probably the wrong place to compete.
Superyachts, by definition, are unique and no handicapping system could accurately distil the unique characteristics of each vessel into a single number to accurately rate it against another yacht. The limitations of handicapping are largely accepted by competitors and at the end of the day, win or no win, all the owners at the Millennium Cup had a huge amount of fun.
With wins in the first two races, Silencio finished overall first and was awarded the Millennium Cup for 2015. Bliss came in second and Millennium Cup stalwarts Janice of Wyoming a close third, and an honorable mention must go to Sassafras who won the last race having been a back-marker on previous race days.
The tone of the evening social events reflected the laid-back atmosphere that pervades in rural New Zealand. No one was turned away for wearing sandals/thongs/flip-flops and there was not a blue blazer in sight.
The opening night ‘do’ was held at the historic Duke of Marlborough in Russell. With cruisers’ tenders pulled up onto the small sandy beach in front of the pub, standing on the verandah with rum in hand overlooking the anchored boats, it was hard to believe I was not in Martinique or Bequia.
It took the local Maori welcome and blessing of the fleet ceremony to remind me that I was on a Pacific island instead of in the Caribbean.
As the week rolled on, the evening events moved to different locations around the bay, with tastings of wine and local delicacies and, of course, the obligatory race bar with the beer and rum ‘tastings’ that come with any regatta.
Day One of the regatta was Ed Dubois Race Day, named in honour of the eponymous designer’s contribution to the marine industry in New Zealand. With 37 Dubois designs having been built in New Zealand over the past 30 years, Ed Dubois would be better qualified than many to comment on the state of the industry, so when he took the stage at the end of the first day’s racing, the who’s who of yachting in New Zealand certainly paid attention.
After paying tribute to the contribution of Tony Hambrook of Alloy Yachts and Ian Cook of Yachting Developments, Dubois acknowledged the challenges that the industry is currently facing but pointed out that it was not the first time that the NZ superyacht industry has faced such challenges, and he remains confident that, with the improvement in global financial conditions, the market in New Zealand would come back.
So what is the current state of the New Zealand superyacht industry and what are the prospects?
Global economics have not been kind to the New Zealand superyacht building industry over the last five years.
With the delayed reaction to the GFC drastically reducing the number of build clients in the market, coupled with a move in exchange rates that have made prices in New Zealand less attractive, activity in the build market is significantly down.
During the industry’s peak in the middle years of the last decade, there was an average of over 10 yachts in build with waiting lists at the yards. I recall being told by a yard in 2006 that one of my clients would have to pay for a slot and wait 18 months before his build could start. In stark contrast, currently there are just a couple of new vessels in build across all yards, and many yards that have not shut down have been forced to downsize while prospecting for new projects.
Industry insiders believe that a change in exchange rates against the major currency is required to make the industry competitive again.
Strong NZ Dollar a disadvantage
The NZ dollar has strengthened approximately 25 per cent against the dollar and euro in the past five years, and with materials being a significant percentage of a build cost, many of which need to be imported into New Zealand, the Kiwi price advantage has quickly disappeared.
Along with the impact of the exchange rate there has been a sharp decline in potential clients in the build market. With many clients originating from Europe or the USA, and yards in Northern Europe and Italy hungry for work, attracting clients to the opposite side of the world is a challenge.
However, as European yacht builders start to fill their build slots again, clients may need to consider New Zealand yards in order to get their projects built within a reasonable time frame, so perhaps it’s just a matter of time until New Zealand benefits from the on-flow
The refit industry in New Zealand has fared a lot better, with Auckland becoming a refit hub for the South Pacific region. The high level of skill and technical expertise in the region mean that many captains are happy to trust their vessels to local yards, and the geographic location of New Zealand is a perfect location to avoid the cyclone seasons in the Pacific.
In addition to world class refit facilities, Auckland is also home to some major component manufacturers who export worldwide.
Rig builders Southern Spars and Hall Spars are both thriving with healthy order books and Doyle NZ, who supply Stratis sail laminates to the Doyle lofts worldwide, are running double shifts to keep up with demand.
The region’s composite component manufacturers, recognized internationally for their technical skill and innovation are also doing well, as demand for weight saving and high performance become more prevalent.
The Millennium Cup represents a fantastic showcase for the New Zealand Superyacht Industry. Many of the local marine companies generously sponsored the event in a show of strength and solidarity for the NZ industry, and much of the fleet had a distinctively Kiwi feel, with more than half the yachts this year having been built in New Zealand, or having Kiwi masts, rigging or sails.
Maybe next time round the Kiwi boats will be dominating the Europeans on the water and Kiwi yards will be thriving again in the international build market.
*Image credits: Jeff Brown
Guy Waddilove is Co-Founder and Company Director of 8 Yachts. Based in Sydney, Guy has been involved with superyachts for over 20 years as Captain, yacht manager and owner's representative on builds.