Successful template

Last year, over 90 per cent of Heysea’s sales were in the over-30-metre segment of the market, reflecting the shipyard’s competency in custom and semi-custom builds. The yard is now working overtime to complete projects delayed by the disruption from COVID-19.

Ocean’s Associate Editor Scott Alle spoke with Heysea Chairman Allen Leng about how the company has managed the recent challenges and their plans for the future.

Allen, thanks for talking with Ocean. What is the situation like now in Jiangmen, Guangdong Province? Is life completely back to normal?

Yes, life is back to normal now in Jiangmen. There are some changes though; there is reduced entertainment time and we must keep a safe social distance. Consumption habits are altered with more online shopping and food ordering.

What about in your factory?

At the height of the outbreak, everyone who entered the factory and office area was asked to check their body temperature. There were also temperature checks every morning and afternoon. We have provided face masks to our employees and they are required to wear them; we sterilise every corner of the factory and office area; we have also arranged to work online and reduced the number of meetings.

From a production point of view, we have boosted overtime in order to catch up the time we were shut down for so as to restore revenue. We are also trying to enhance productivity. On the marketing side, we have launched more promotional activities and new ways of promoting our boats.

What has been the extent of the impact of COVID-19 on Heysea’s manufacturing operations? Can you quantify it?

Firstly, all projects have been delayed by more than a month. Secondly, five percent of our employees are from Hubei Province. We also have many workers from other affected areas, but everyone is back at work now. Thirdly, composite cost (a company’s cost to finance its business), has increased.

How long were operations delayed? Didn’t the government hold back resumption of work until after the Lunar New Year?

The local government allowed us an early resumption on 10 February, but we had to match the epidemic prevention conditions and get their approval. So, up until 17 February, we arranged for only a few employees to come back to work. At the beginning of March, 70 percent of our employees came back to work. All of our employees have returned to work now and production is on track.

Jiangmen is more than 1,000 kilometres south of Wuhan, but are there any indirect effects?

We think the main indirect effect is a change in consumption ideas and habits. On one hand, some customers will think carpe diem and go ahead with their purchase, while others might think the yacht price will be lower than before.

What other steps are you taking to adapt to the new business conditions?

We are developing and researching more yacht models such as sailing catamarans and explorer yachts. We also now providing more interior design options to the customer. At the same time, we are keeping a tight control on internal costs while optimising management processes and upgrading products in order to lower the cost of the whole project. The aim is to keep the price of our yacht the same as before the virus, even though the composite cost has increased. There is also the possibility of some discounting in special deals.

Do you have a sense of the impact on the boatbuilding industry in China?

There will be delays in most of the boatbuilding activities in China. Also, many boat shows have been postponed or cancelled this year. Customers could not visit onsite and there’s been a change in consumption ideas, and this is impacting our industry.

The overarching message from China’s yacht industry is, however, optimistic and encouraging.

The industry is looking for new ways to conduct marketing such as online sales, online boat shows and other virtual tools.

What positives have come out of the COVID-19 experience?

I think the positive part is the change of consumption idea. Many people are asking for quotes on yachts and while they can’t come in person they can go online. Once the virus is fully gone, we think there could very well be an increase in demand.

heyseayachts.com