Brunswick Corp. said in August that it will establish a manufacturing plant in Brazil to produce boats for South America’s largest country and the surrounding region.
The plant, which is to be in the Perini Industrial Park in Joinville, Santa Catarina, will have nearly 150,000 square feet of manufacturing space and will eventually employ as many as 150 people to produce several Bayliner and Sea Ray sportboat and cruiser models.
“With the eighth-largest economy in the world, we believe Brazil and its expanding boat market offer us attractive opportunities for growth,” Brunswick chairman and CEO Dustan McCoy said in a statement.
Brunswick plans to have locally manufactured products available in advance of the 2012 summer boating season. When it is in full operation, the plant will have the capacity to produce more than 400 boats annually.
In a separate development, Moody’s Investors Service in July upgraded Brunswick Corp.’s corporate family rating to B1 from B2 because of expectations that its earnings will continue to improve in the near to mid-term amid stabilizing demand trends and a significantly lower cost structure.
The following ratings also were upgraded: probability-of-default rating, to B1 from B2; secured notes, to Ba2 from Ba3; and unsecured notes, to B3 from Caa1.
“We believe that the combination of stable boating participation trends, the increasing age of licensed boats and fewer used boats for sale should help drive demand for new boats in the near to mid-term,” Kevin Cassidy, senior credit officer at Moody’s Investors Service, said in a statement.
In an additional development, Sea Ray Boats laid off 17 people in July at its operation in Forks of the River Industrial Park in East Knox County, Tenn., according to the Tennessee Department of Labor and Workforce Development.
“These recent actions are the result of the traditional ebb and flow of the boat business. To continue to effectively manage the marine pipeline, our overall strategy further reflects our plan to ensure that our dealers have the appropriate levels of inventory to meet seasonal demand and to gain market share,” Brunswick spokesman Dan Kubera says.
2011 sales disappoint dealers in survey
A survey of nearly 300 dealers indicates that “2011 is not the inflection year that many hoped for, going into the selling season,” according to a report from RBC Capital Markets.
“Dealers expressed disappointment with what appears to be a flat to slightly down year for new-boat sales,” analyst Edward Aaron wrote in his report.
Bright spots in the survey include:
• Small-boat categories continue to show gradual recovery and dealers are reporting robust used-boat sales and service business.
• There are pockets of geographic strength, including evidence of a recovery in Southern markets.
• Inventories remain healthy.
Meanwhile, a National Marine Distributors Association survey revealed optimism about next year. Most of the members surveyed said they expect that 2012 will be an up year for marine accessory sales, compared with this year, according to the group’s annual State of the Industry survey.
Seventy-eight percent of the respondents said sales will be better next year. Twenty-two percent said business probably will be about the same.
Looking at this year, compared with 2010, 43 percent said total sales volume for marine accessories is up, 39 percent said it is down and 18 percent said it is about the same.
Wholesale shipments increase, NMMA says
Through May, wholesale shipments of traditional powerboats were up 4.8 percent from a year earlier, according to a report issued in August by the National Marine Manufacturers Association. Corresponding dollars were up 19.6 percent, the NMMA says.
For the first quarter of this year, new powerboat registrations were down 5 percent on a rolling 12-month basis, compared with a year earlier. Advance estimates indicated that sales would be down 4.4 percent on a rolling 12-month basis through June.
Recreational boat and marine engine export volumes were up 10 percent in the first quarter of 2011, and dollars were up 8 percent from a year earlier, according to the NMMA. Corresponding import volumes were up 57 percent; dollars were up 25 percent.
Several companies announce acquisitions
Seven marine industry companies announced acquisitions, and an eighth company bought a manufacturing plant.
• Pontoon builder Premier Marine Inc. said it completed the acquisition of Weeres Industries and Palm Beach Marinecraft. The sale closed July 29 and the terms were not released.
“The purchase of these two strong brands will further expand Premier’s selection of pontoon boats to our dealers,” Tom Menne, newly appointed vice president of Palm Beach/Weeres and former vice president of Premier, said in a statement.
Weeres and Palm Beach will retain their names, but will be wholly owned subsidiaries of Premier Marine under the terms of the sale.
• U.K.-based Fairline Boats was sold, the company said in July.
Better Capital Ltd. announced that a company wholly owned by Becap Fund LP reached a formal agreement with the Royal Bank of Scotland PLC to acquire a majority stake in Masco 30 Ltd., a new company set up solely for the purpose of acquiring all of the share capital of Fairline Boats Acquisition Ltd. and its subsidiaries.
Under the agreement, West Register (Investments) Ltd., a company wholly owned by RBS, will acquire a minority stake in Masco 30 Ltd.
• Johnson Outdoors Marine Electronics in July said it had acquired the assets of Waypoint Technologies, the maker of LakeMaster, a brand of high-definition electronic lake charts. Details of the transaction were not released.
• Medina, Ohio-based RPM International Inc. said its Performance Coatings Group acquired API S.p.A., a $28 million producer and installer of polyurethane and urethane-based flooring and decking solutions for cruise ships, megayachts and naval applications.
Based in Genoa, Italy, API also produces epoxy and polyurethane flooring systems for the Italian building market. API will continue to be led by Giorgio Magnaghi, managing director and grandson of company founder Mario Magnaghi, along with his management team. Terms of the deal were not disclosed.
• Four businessmen/anglers purchased all rights to the name, trademark, molds, jigs, tools and other assets of the Warrior Boats brand, the group said in July.
The new owners are Chuck Barth, a cattle rancher and owner of Tamarack Kennels in Melrose, Minn.; pro walleye angler and 2005 PWT championship winner Dave Andersen; Joe Hellermann, former owner of Melrose Marine and Sports and a former Warrior dealer; and Al Leinen, co-owner of St. Rosa Lumber Co.
Terms of the deal were not disclosed.
The new company initially will employ about 10 people, including some key personnel from the former factory. The company will select from among four communities that are bidding to attract it.
“This was a dream of mine ever since the plant closed,” Andersen said in a statement. “I can’t believe how many people keep asking me about the boats, and what can be done. Well, we did something, and will start showing new boats at shows in December.”
• Celedinas Insurance Group announced the acquisition of Palm Beach Insurance Group, which was founded in 1998.
“Our goal is to offer Palm Beach Insurance Group clients the convenience of a local insurance firm that incorporates the breadth of products, expertise and market strength of one of America’s oldest and largest insurance advisory brokers,” Celedinas president and CEO Ray Celedinas said in a statement.
• Guilford, Conn.-based Ocean Accessories, a manufacturer, importer and distributor of specialty boating products, acquired Master Fender Covers.
The purchase includes all inventory and intellectual property. Terms of the deal were not disclosed.
• Legend Boats purchased a new 75,000-square-foot manufacturing facility in north-central Arkansas, the company said in July. The Midway, Ark., facility will house all production and operations of the company and replace the current factory.
“Sales of our boats are through the roof and we just can’t keep up with the demand in our current facility the way we’d like to. We need more space,” company president Randy Qualls said in a statement.
Organizers cancel Boston Fall Boat Show
The Boston Fall Boat Show, which had been scheduled for Oct. 1-3, will not take place this year.
“Due to the current economic climate, the local marine marketplace cannot support a show at this time. We simply could not get enough additional exhibitor support to make the numbers work for 2011,” show manager Warren Kelly said in a statement.
“If all the exhibitors returned from last year we would still have a significant shortfall in revenue,” he added. “We need new dealers and new brands to enter this market to produce a profitable show. This has been a major show in this region for many years, and it will be back.”
Grow Boating elects 2011-12 officers
Joe Lewis, president of Mount Dora Boating Center in Mount Dora, Fla., was elected chairman of the Grow Boating board of directors for the 2011-12 term. He replaces D. Scott Deal, president and chief executive of the Maverick Boat Co.
Also named to the board were vice chairman Marcia Kull (vice president of Volvo Penta of the Americas); secretary David Witty (vice president of operational excellence at MarineMax) and treasurer Bill Watters (president of Syntec Industries).
Officers serve one-year terms, but can be re-elected after their terms expire.
“Given the challenging economic environment we have faced in recent years, the Grow Boating board of directors looks forward to continuing to reignite Discover Boating and returning to a unified, consistent and long-term effort to drive more consumers to dealers and manufacturers around the country,” Lewis said in a statement.
Carl Blackwell, chief marketing officer of the National Marine Manufacturers Association, was elected president of Grow Boating Inc. and Phil Keeter, president of the Marine Retailers Association of America, was elected vice president.
This article originally appeared in the September 2011 issue.