Superyacht-Maker Ferretti Plans China Plant on Rising Wealth
Ferretti Group, whose Riva unit made boats for Brigitte Bardot and Sean Connery, intends to open an assembly plant in China as its new Chinese parent seeks to drive up sales in the world’s most-populous country.
The Italian yachtmaker is considering plans for the facility in Qingdao, Shandong province, Tan Xuguang, chairman of the company and of its majority-owner Shandong Heavy Industry Group-Weichai Group, told reporters in Beijing today. The plant will customize vessels for the local market, he said.
Ferretti plans to boost sales in emerging markets led by China, Brazil and Russia, Tan said, as the Euro-zone debt crisis saps demand in Europe. Shandong Heavy, China’s biggest maker of bulldozers, agreed to buy 75 percent of the yachtmaker from creditors in January for 178 million euros ($222 million).
The new ownership “will give us unbelievable access to emerging markets such as China, where the potential is the highest in the world,” Ferretti chief executive officer Ferruccio Rossi said in Beijing. The company will also continue to focus on Europe and the U.S., he said.
The boat-builder, which also makes Ferretti, Pershing and Bertram brand yachts, will retain its existing management as well as its headquarters and production facilities in Italy, the two companies said in January. Its yachts can cost more than $100 million.
The yachtmaker’s bank liabilities have fallen to 116 million euros from 760 million euros following a restructuring, Tan said. The company almost collapsed into bankruptcy in 2009 before creditors led by Royal Bank of Scotland Group Plc agreed to a debt-for-equity swap. RBS and Strategic Value Partners LLC both own 12.5 percent stakes in Ferretti following the January deal.
Ferretti may buy parts for its Chinese-made yachts from suppliers in Guangdong and Fujian provinces as well as Taiwan, provided they can meet quality standards, Tan said. Shandong Heavy is controlled by the Shandong provincial government. Qingdao is a major naval base and it was the host city for the 2008 Olympic sailing regatta.
Ferretti sold about 17 vessels in the country last year, Tan said in January. The number of ultra-high-net-worth households in China rose 20 percent in the period, according to Boston Consulting Group.
The Chinese company’s other units include bulldozer-maker Shantui Construction Machinery Co. and Hong Kong-listed engine- maker Weichai Power Co. (2338) The Chinese machinery maker is also in talks about buying a 25 percent stake in German forklift maker Kion Group GmbH from KKR & Co. (KKR) and Goldman Sachs Group Inc. (GS), two people familiar with the matter said earlier this month.
To contact Bloomberg News staff for this story: Feifei Shen in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Neil Denslow at email@example.com