Feature: Jade Yachts leads the nation's shift to upscale market for steel super yachts

Han said that Taiwan's comparatively lower labor cost is another crucial advantage, especially now that building costs in Europe are surging as a result of the euro's sharp appreciation in the past few years.

Right track

As steel yachts are getting more popular, Jade Yachts is on the right track, White said. The margin from making FRP yachts is declining given competition from China, making the transition to high-end products critical, he said.

According to statistics provided by Jade Yachts, on average, the building cost for mass-production, smaller FRP yachts measuring less than 33ft LOA are US$8,000 per foot, and that for larger FRP yachts between 33ft to 164ft is US$60,000 per foot.

Costs for custom steel yachts are way higher, ranging from US$600,000 per foot for ships measuring between 164ft and 230ft, to US$1.3 million per foot for top-grade vessels above 230ft, the company said.

Profit margins from the different types of yachts soar along with the costs.

But Taiwan still has room for improvement when it comes to building custom-designed yachts. One quality standard that needs to be emphasized is cleanliness, White said. Keeping a clean working area and staff are important when building yachts that cost more than US$10 million, he said.

The shortage of skilled workers is another obstacle that could limit growth in this market, White said.

Aware of the problem, Han said he has started to work with colleges and offered scholarships and internships for students in woodworking, design and related fields.

To aid the industry's shift to a higher-end market, Han called on the government's help in providing loans, land and tax incentives for shipbuilders.

Taiwan's high-tech sector has long been subsidized by the government, while the shipbuilding industry has to stand on its own feet for decades, he said.

Promoting yachting as a national pastime could further help the sector, Han said.

To achieve this, wharfs need to be constructed, Han said. Taiwan has none at present.

Once the infrastructure is in place, sailors from other countries anchoring in the wharves will bring in more cash for cleaning, maintenance, fuel and other services.

The government also needs to revise the Shipping Act (船舶法) and other maritime laws that put many restrictions on recreational sailing, forcing many people either to register their yachts as fishing boats or under other nations, he said.

Dream

At the end of the sea trial, asked how he would evaluate the first steel yacht he has built, Han gave a modest score of 80 out of 100 points.

"We always have room for improvement," Han said.

Yacht building may be a traditional industry, but it has an international perspective, Han said, adding that he hopes to make Jade Yachts a world-class brand name and a guarantee of quality.

While other traditional industries have moved to China, Han said he would maintain his roots in Taiwan.

"We will keep moving forward and improving our quality so that our Chinese competitors can never catch up," Han said.