Ian Kopp is vice president/general manager of Kenway Corp. and president/chief operating officer of Maritime Marine Group and a part owner of both companies.
Kopp, 41, joined Kenway as a project manager in January 1998 after spending about five years working in education. He is a 1993 magna cum laude graduate of Amherst College with a degree in English.
After six years of successfully managing large industrial projects, as well as developing and marketing new products, he became vice president/general manager, responsible for Kenway’s daily operations as well as partnering in long-term strategic planning for the company.
When Kenway decided to buy Massachusetts-based Maritime Skiff Inc. in 2007 and relocate it to Maine, Kopp became president/chief operating officer of the newly formed Maritime Marine Group LLC. More recent acquisitions include Southport Boats and Bristol Harbor Boats, along with a partnership in Front Street Shipyard in Belfast, Maine.
During the last 10 years he has contributed to a number of industry organizations, including the American Composites Manufacturers Association’s Corrosion Division, the Maine Composites Alliance, the Maine North Star Alliance Initiative and Maine Built Boats. He is president of the board of the Maine Marine Trades Association.
Kopp and his wife, Holly, live in the MidCoast area of Maine with their two children, daughter Emma, 8, and son Blair, 11. Kopp says his family enjoys boating together.
Q: Last year was a big year for Maritime Marine Group with the purchase of Bristol Harbor Boats, Southport Boats and your investment in Front Street Shipyard in Belfast, Maine. What drove these purchases and investments?
A: These investments represented strategic diversification within our [Kenway’s] marine business. Obviously the last few years have presented fairly unique opportunities in that market, given the economic downturn, and our diversification effort has really put us in a position of stability where we can capitalize on that.
When you take a look at something like Southport, you look at the pedigree — the Hunt design, the exceptional performance of the boat, you throw in our partner (in the Southport Boats division) Tom Johnson, who brought the deal to us, and it allows us to introduce Southport in a very compelling way. It’s new to the market, even though the product existed.
Front Street Shipyard — again, a unique opportunity with deep-water access. It’s complementary to the rest of our business because of the large composite manufacturing that we do for the U.S. military, for heavy industry and the future of offshore energy, so there was a lot of synergy.
Q: The last few years have been challenging for the industry, to say the least, so why make these acquisitions at this time?
A: In each case it was really too good to pass up.
With Southport, I was very reluctant at first. We had purchased the Maritime and Maritime Skiff business at probably the worst time … although the product is doing well for us. But … Tom Johnson was an integral part of that. He’s the partner who’s been working with us to set up the dealer network and grow that business and he was very persistent. We went down to actually run the boats and it was taking them out for a ride … that showed me we had something truly exceptional. It was not an easy decision, but it was the right decision.
Likewise with Front Street Shipyard. You look at the location, the deep-water access on the coast of Maine, the partnership between the managing partner, J.B. Turner, and his experience in the industry, the business experience of the other silent partner and the opportunity in just 12 months to build (out of an old cannery) one of the finest shipyards on the East Coast is really exciting.
They all represent unique opportunities, given the current market conditions, with products that are really quite exceptional.
Q: When you look at the different boat lines you own, was there a strategic decision to purchase one line over another, and how do they complement each other?
A: Kenway Corp., when it started in 1947, ironically started building boats — little wooden boats that eventually became composite 15-foot runabouts. [Then] for about 40 years the company didn’t even think about boats. It was in the process of diversifying that we got back into marine … with the Maritime and Maritime Skiff lines. That’s a fairly utilitarian boat, but with a great hull design. It represented a great platform from which to build that small-boat market. We looked at going bigger into the 25- and 27-foot bracket with that hull concept, and it just didn’t make sense.
When Tom Johnson brought Southport to us … there was a commonality in hull design. Hunt was actually involved in the original line for Maritime and Maritime Skiff, so we knew what a tremendous hull Southport would be, based on the Hunt design. It represented the opportunity to get into that larger boat market.
Interestingly, while the boats look very different, there’s a lot in common. The manufacturing processes are very similar. We’ve focused on high-end vacuum infusion; we only use the best reinforcement vinylester resins. We could build the boats cheaper, but we chose not to.
What we saw in Bristol Harbor Boats was a very different product from either Southport or the Maritime lines, but what it had in common was it was well-designed. It was fuel-efficient, stable, but it was more of a Down East style, so we could now offer customers — customers who value the quality, the features that were in a Maritime, but wanted more classic lines — we could offer them a product that met those requirements.
Q: Do you do sell to commercial and recreational markets, and what’s the product mix?
A: Most of our commercial work is done in the Maritime and Maritime Skiff product line, and that boat has a long history in that arena. Paul Hureau, who founded that business, along with Bev Brown, his background was with Boston Whaler’s commercial division, and when Boston Whaler moved to Florida he stayed in the Northeast and built his own boat. The boat has always been built to commercial specifications, so it lent itself to that very well. Our focus there has been in markets like Virginia Fish and Game, the Baltimore Fire Department, local harbormasters, police departments … and our ability to customize the boat puts us in a unique position.
We probably could be doing more in the commercial end of things, but we have not … split off a division to focus on that exclusively. Some companies with commercial sales have opted to pull that in-house, so to speak, and sell directly from the factory. We continue to do all of our commercial sales through our dealers, and we feel that while there might be more sales opportunity for us if we went direct, for the health of the brand and the brand overall it’s better to have fewer commercial sales but maintain that through our dealer network and make sure they remain financially strong.
Q: Are there plans to purchase any other boat lines? If not immediately, would you rule it out in the future?
A: I didn’t have any plans to purchase the lines that I did. We don’t have any plans presently, but … one thing that’s been characteristic of the company is we always listen to opportunities and we always look for opportunities. We’re not afraid to take risks — calculated risks.
To be honest, we’ve been fortunate so far. The opportunities that have come along have matched what we’re committed to. It has to be something that has an exceptional design pedigree and performs well. It’s got to have strong brand reputation. It’s got to have high quality standards. Those are all important to us. So unless they meet [those] narrow criteria they’d really be a distraction to us right now.
Part of Front Street Shipyard’s business plan is to find a semicustom production boat somewhere in the mid-30 to 60-foot bracket that will leverage that facility’s capabilities … but it’s got to be the right fit.
Q: How is production going these days in terms of the number of boats you are producing? How does it compare to years past?
A: Our production is fairly strong right now. Like every other builder in the 2008-2009 time frame, we saw a significant drop in business. Maritime was once a 150- to 200-boat-a-year company, and at its low it was about 50 boats a year, which is a significant drop — not as bad as some, I’m told, but it’s significant. We were blessed that the company is well-diversified, so we never shut down, we never laid off employees. It’s always been part of our business plan to have a variety of manufacturing markets … so we can manage steady growth.
For instance, with the Maritime and Maritime Skiff brand, [compared with] 2006-07, our production is less than half. But because of the strategic acquisitions we’ve made, our sales this year will certainly match, if not exceed, our best sales year since we’ve gotten back into boatbuilding. The marine part of the business has been growing quite well with the diversification strategy.
Maritime and Maritime Skiff, as a result, is having one of the best January/Februarys it’s had in recent years. There are retail sales happening, which is encouraging, and I think it will be a good season. Southport’s really exceeding our expectations. We have a strong backlog presently, we’ll be announcing more U.S. dealers in the coming weeks and months and have recently initiated an overseas market development initiative. It’s not out of the realm of possibility that by the July/August time frame our 2012 production year could be sold out.
Q: How are sales? Do you think the buyer is back?
A: I wish I knew the answer to that. We only sell through our dealer network, so our focus is really on retail sales, and we believe strongly that we can’t grow unless our dealers are financially strong. We’ve structured our business in such a way that if we don’t sell a boat for a couple of months, it would not make me very happy, but it doesn’t shut down the company. We don’t lay people off. We remain financially strong because of the way we’ve diversified. We’ll shift personnel and remain ready. What that allows us to do is to help dealers sell old inventory, maintain their financial strength and puts us in the position where we never have to go to them and say, ‘Take a boat now’ … I think our dealers value that highly.
The industry’s trouble in recent years was exacerbated by some manufacturers really trying to force dealers to overextend themselves just to keep production lines going. I’m concerned that might be happening again in some sectors, but I don’t think that’s the right long-term strategy, and that’s why we structured the business the way we have.
There are early indications, from some of the boat shows, that this year will be positive. I think it will be challenging, but I think there will be managed growth.
Q: How would you characterize the financing situation these days, both for your dealers and for consumers?
A: It’s certainly challenging. Floorplan financing is a real conundrum for traditional banks. They really don’t know how to manage that floorplan inventory in the context of the typical financial analysis they do, the typical ratios they run for businesses. I’m personally not in favor of more lenient financing, but more flexible financing in terms of how the banks evaluate dealers’ collateral.
Floorplan right now, it’s fairly fragmented. Dealers are having to tie up multiple resources they could otherwise be using for working capital. That’s why I say it’s challenging. I’m seeing progress there. A lot of our dealers are finding more focused ways to finance that inventory, and I think the more that happens, the stronger our market will be.
At the customer level, I think we’re headed toward an equilibrium that we need to find. Lending was far too lenient when the market collapsed and, as a result, we over-corrected. We careened in the opposite direction, where it became far too stringent, and I think we’re heading toward a position of balance. I may be different from many in the industry, but I guess if we’re going to make a mistake in lending practices I’d rather see that criteria stay too tight than too loose.
Q: Can you discuss how Front Street Shipyard fits into your business plan?
A: Front Street Shipyard is certainly a one-of-a-kind opportunity, but what it really represents — particularly between Front Street Shipyard and Kenway Corp. — is a unique partnership. We’re able to leverage the talents of each company. Kenway’s expertise is in composites manufacturing and we also build boats. Front Street is a shipyard. It does everything from service work to major retrofits to new custom builds. One of its many areas of expertise is systems integration, and the people it has are very good at that.
As Front Street Shipyard looks at a new custom build they have the resources of our company on the composites manufacturing. For example, we’re working with a customer right now on a potential 80-foot powerboat. We’re able to ramp up production very quickly … because we have the already-trained personnel at Front Street Shipyard on the assembly and systems side. So we’re not bringing in new people and we’re not having to retrain work forces.
We have a fairly long history with J.B. Turner, with Taylor Allen and Steve White in our company, so part of what is making it successful is the way each of us works together.
Q: As a builder, how do you balance creating a boat that has new and interesting features for the consumer while keeping costs down? Do you think this is an issue that needs more attention from the industry as a whole?
A: That’s very challenging and, without question, it needs to be addressed. It really comes back to the financial health of the builder and their ability to invest in new product and managing that financial health.
We’re close friends with the folks at Sabre Yachts and Back Cove Yachts, and they’ve managed their marine business exceedingly well. They’ve introduced new products on a regular basis that excite the customers, excite their dealers and the market in general.
For the past few years we’ve been relatively quiet in that regard, for obvious reasons as we brought new product lines into production. But I think over the next 12 to 24 months you’ll see much more of that. We’re going to be investing in product enhancements in the Maritime and Maritime Skiff lines. If the right conditions present themselves, we’re also in the process of evaluating new models for the Southport line.
The key, I think, is building that business model [so] it allows new product to be accomplished without overextending company resources. We’re certainly not going to be the builder who introduces the latest fad. Chris Shannon of Madaket Marine, one of our longtime dealers on Nantucket, has said that the height of sophistication is simplicity, and we believe fairly strongly in that. It’s different for each of the product lines, but we’re going to make sure the improvements we make represent value for our customers, rather than just improvements for the sake of being able to introduce something new.
Q: How big a challenge is it to meet existing environmental regulations and those coming down the pike? Also, how interested are your customers in green boating practices and issues such as fuel efficiency?
A: Before fuel efficiency became a concern in the marketplace we were marketing the fuel efficiency of the Maritime and Maritime Skiff lines — their ease of planing, how flat they run, their ability to handle rough water, low horsepower, etc., etc., and that was certainly part of the evaluation of Southport that we looked at. Even though those boats have twin engines, the hulls, relative to their peers, perform extremely well on a fuel-efficiency basis.
As far as environmental regulations, there are concerns insofar as how they’re introduced so they don’t become burdensome for a business. We’ve taken a very proactive approach.
Take styrene emissions. Styrene is one of the products emitted in the composite manufacturing process. That’s been a focus of our industry for years, and recently the government made a ruling based on pretty unsound science for addressing it. But it hasn’t had a lot of effect on our company because we’ve been far more proactive than most.
We transitioned to closed molding in vacuum infusion years ago, even with our smallest boats, even when people told us it wasn’t cost-effective. But for us, cost wasn’t the driver. We’re not competing as a low-cost boat. We saw an opportunity to build a better product for our customer, create a better work environment for our employees, and that’s the philosophy [that] really drives our manufacturing and our environmental focus.
I believe strongly that’s valued by our consumers. We’re not out actively marketing that we’re a green company, but those decisions drive what we do and I think that is valued.
Q: What do you feel are the biggest challenges facing the recreational boating industry and what can be done to solve those problems?
A: The issues facing our industry are no different than the issues facing our country, really. We build a discretionary product that people are very passionate about and we’re very passionate about, and so creating an environment of financial stability is important. That means companies need to be managing for long-term growth rather than a short-term rebound.
I also think, to achieve that, manufacturers and dealers need to be thinking about our business model. The old model of manufacturing and the relationship between manufacturers and dealers and the consumer is broken, and moving forward it needs to be looked at as much more of a partnership among those folks rather than a top-down business model.
Q: What about participation in boating? What can be done to get more people out on the water?
A: A lot of what we’re doing is good. I think the Grow Boating initiative is a good one. At the end of the day, what we’re missing is the middle-class consumer who used to be in a position to purchase a boat, but now is more concerned about the longevity of their job and the health of their family. I think the solution is not unique to the boating industry. The solution is improving the overall financial condition of our country, rather than just marketing boating.
I talk to many of our employees. I see people at boat shows and I’ve talked with friends who love boating. They’re passionate; they don’t need to be convinced that boating is a priority in their life. But it comes back to the financial resources to pursue it, and that’s what we need to solve.
Q: What do you see as the future of the boating industry?
A: Over the coming years I see slow but steady growth for our businesses. Unfortunately, I think more companies will likely go out of business in the coming years. I think there will be more consolidation. But I think that the manufacturers and the dealers who continue to innovate with their business models will prosper.
I think that old model is broken, and a new one is evolving that is much more collaborative. It’s much more of a partnership. Whether it’s collaborating on financing, marketing, advertising, boat shows — as resources are pooled together rather than duplicated, I think that is far more effective.
For us, in terms of our overall business in the high-end, value-added composites market, I see a future that’s never been brighter. I see more opportunity in a variety of markets than we’ve ever seen in the history of our company, and I think the fact that we’re diversified across a variety of markets provides us a unique level of security and predictability for our dealers and customers. So I think that puts us in a position to excel as we experience this slow and steady growth in the marine market.
This article originally appeared in the March 2012 issue.