Recreational boating making inroads in Egyptian economy
With 2,000 km of coastline, Egypt possesses a lucrative yachting potential, which has not been adequately developed. The country's relationship with recreational boating, boat manufacturing, and boating tourism has been tepid, since Egyptians by nature are not a sea-faring population.
But, beginning in the early 1980s, with the development of Red Sea tourism, a small boat industry (both tourism and manufacturing) took form, reported Business Today Magazine.. As a growing number of divers visited the Red Sea, tourism developers recognized the need to provide them with boats that could transport them to and from the various dive sites, and this led to the birth of the safari boat industry. At the time, however, investors were unsure of the industry's potential for success and were reluctant to invest in the in infrastructure necessary to support a yachting tourism industry. Still, the safari boats that began with basic amenities have since grown larger and now include more luxurious features such as cabins and air-conditioning.
The bulk of safari boats are still manufactured from low-quality wood in primitive boat yards in Alexandria, Cairo and Suez. Most boat builders are traditional craftsmen who transfer the know-how from generation to generation. Until the 1980s, they had only produced, fishing.
A majority of Egypt's boat owners do not use their craft for recreational purposes but hire them out to sports fisherman or divers. Locally manufactured wooden yachts generally do not meet international standards, they do function adequately on the calm waters of the Red Sea.
These boats, however, require constant maintenance to remain safe. Each six month the wood must be resealed and repainted. Due to generally poor manufacturing, an average of EP 120,000 annually must be spent in order to maintain a 30-meter wooden yacht. Still, if properly maintained and marketed to tourists, an investor can earn a return on an EP 3 million investment on a safari boat within four years.
There are presently approximately 1,600 boats registered in Egypt, the overwhelming majority are made of wood and were manufactured locally. In fact, the government has stopped issuing new boat licenses, claiming that the market is over-saturated.
Egypt's yacht manufacturing industry should thus target the booming global market. In recent years, the traditional yacht building centers of Italy, Greece and the Netherlands have become less competitive due to rising labor costs. As a consequence, countries such as Turkey and Malaysia have emerged as the new market leaders. Egypt holds the same potential, as local manufacturing costs are a fraction of what they are in Europe. However, if Egyptian yacht manufacturers wish to target the international market, they must adopt a different set of standards and technical skills, as well as begin manufacturing fiberglass and steel yachts.
In the past several years, a number of Egyptian companies have ventured into the international yachting market but have encountered trouble along the way. The Alexandria-based Neptune Commerce Corporation has attempted several times to manufacture large yachts for foreign customers, but logistics prevented the deals from materializing.
In 1996, Mohamaed Shama commenced building a luxury yacht manufacturing factory in the Sixth of October City. His plan was to import from the United Kingdom the expertise for building fiberglass motor yachts and to manufacture the vessels in Egypt, at a lower cost—for both the local and export market. Shama now produces seven models of motor yachts, with prices starting at EP 399,000 and rising rapidly for larger vessels. A 30-meter that markets for $5.5 million in the United States is sold locally at a 10-15 percent discount. Still, the prohibitive cost makes the Egyptian market difficult to penetrate, and Shama is focusing internationally and in particular the United States.
Red Sea Yachting and its sister company, U.S.-based DeBirs, are also looking to Egypt’s tourist trade from a boating perspective. DeBirs, a yacht manufacturer, will introduce Egypt's first luxury yacht that will be available for charter on the Red Sea. The five-star, fully equipped, 80-meter fiberglass yacht will cater to international businesspeople and upscale tourists.
DeBirs will eventually have the capacity to manufacture three such yachts annually. The yachts will be foreign-owned, with the option of having Red Sea Yachting manage the vessels on the Red Sea.
At present, Egypt lacks the marinas and services necessary to support a sizeable yachting community. Furthermore, the bureaucratic steps required for a boat to enter the country are cumbersome. If properly managed, however, Egypt's yachting industry could become a lucrative sector for both the government and the private sector.- (Albawaba.com-MEBG)
© 2000 Mena Report (www.menareport.com)