When Emirates Team New Zealand decisively won the 35th America’s Cup in Bermuda in 2017, the team took home the trophy that it last held from 1995 to 2003, and yet again boosted the international reputation of Kiwis for inventive boatbuilding and extraordinary racing skills.
The team also delivered the opportunity for New Zealand’s marine businesses to gain a slice of the tens of millions of dollars that would be spent in the buildup of events leading to the Cup finals in 2021.
A 2017 report by New Zealand’s Ministry of Business, Innovation and Employment promised a countrywide economic impact of up to $660 million. This was later revised downward, as the multipliers used by the authors were determined to be overly optimistic. However, the report accurately identified realistic economic gains in two key marine areas: the direct spending of the competing Cup teams, and a large contingent of visiting superyachts. The four or five teams racing will be fewer than forecast, but the number of superyachts expected to attend is higher than initial expectations.
“As of December 2019, 150 superyachts have advised they are coming,” says Peter Busfield, executive director of the New Zealand Marine Industry Association. “Our goal is 160, and we’re confident we’ll reach that.” His estimated spend per superyacht is about $1.8 million, which could total more than $280 million, albeit not all to the benefit of the marine trades.
Busfield says there are normally 60 superyachts operating in New Zealand in a given year, including participation in the Millennium Cup, held in early February in the Bay of Islands north of Auckland. In 2003, the event was also held a month before the final Cup races and drew 35 superyachts.
Not only is the America’s Cup a fashionable superyacht destination, but New Zealand’s proximity to the South Pacific islands, such as Fiji and Tahiti, also creates charter possibilities. Local regulations have recently been relaxed to allow yachts to stay in New Zealand waters for up to 24 months without levying importation taxes. Australia, not far behind, also has loosened its regulations.
Refit and Service Work
Superyacht refit and service work will be most important to many New Zealand marine businesses. Within walking distance of the team bases in Auckland is Orams Marine, which plans to invest about $66 million this year in expansion, installing an 840-ton Travelift capable of handling 230-foot superyachts. The yard’s investments will double its capacity to service superyachts.
Southern Spars, the world’s largest builder of carbon-fiber spars for bigger sailing yachts, has a service site adjacent to Orams Marine — its main facility on the outskirts of Auckland — that is being incorporated into the development. Southern Spars is part of the North Sails Technology Group that, along with Future Fibres, handles the composite stays that support the masts.
Every five years, larger sailing yachts require a complete service, according to Mark Hauser, founder and sales director of Southern Spars. He says that unstepping the carbon-fiber mast on a 110-footer; inspecting and updating the hardware, rigging, electronics, lights, wiring and plumbing; and, often, repainting the spar can be a $2 million job. “And we now have some boats over 100 meters [328 feet] with three masts, which can cost tens of millions,” he says.
Doyle Sails, a New Zealand-owned international firm that caters to superyachts, and North Sails, the world’s largest sailmaker, both have major lofts in the Auckland area.
Staging any regatta requires support boats, and New Zealand’s Rayglass developed its Protector series of high-speed RIBs for Cup events starting in 2000. CEO Dave Larsen, who started out at the company as a mechanic, persuaded the Lottery Grants Board of Lotto New Zealand to allot nearly $6.7 million for the purchase of 26 boats for Cup organizers and racing syndicates to use for crowd control, umpiring and vessel support. After the Cup, the 30- to 45-foot boats will be distributed to Royal New Zealand Coastguard units, replacing about a third of its fleet.
Two of the largest boats, the Catalyst 45 high-speed catamarans previously built by Salthouse Boatbuilders, will be produced by Lloyd Stevenson Boatbuilders; the other 24 boats have added 15 to 20 jobs at Rayglass.
The company, reporting a strong year, also launched a Targa line of boats that it has been developing with Simrad electronics and Mercury engines — V-6 225s and V-8 300s. Rayglass has built 10 of the 310 Targas to date and has forward orders from the United States, Australia and Asia-Pacific, Larson says. “We have a full order book out to the middle of 2022,” he says.
An Imperfect Report
Imperfect as it may have been, the 2017 Ministry of Business, Innovation and Employment report provided enough ammunition for Team New Zealand to gain cooperation and investment from the national government and the Auckland city council to redevelop a portion of the Auckland waterfront. This development set the stage for all of the team bases to be located together, and to add dockage for up to 70 superyachts. That work is nearly complete — and the superyacht slips reportedly are all booked for 2021.
Other nearby work has seen the removal of an unsightly tank farm and the creation of significantly improved public access to the waterfront. That kind of infrastructure change will last long beyond the end of the series.
The 2021 America’s Cup challengers to Emirates Team New Zealand are Luna Rossa Prada Pirelli (Italy), New York Yacht Club American Magic, and Ineos Team UK. (A fourth challenger, Stars & Stripes Team USA, appears to be well behind the others.) According to published reports, the three main challengers each have estimated budgets up to $160 million and will spend $33 million to $46 million each within the country.
Team New Zealand set up shop building its own boats and hired 50 builders. Its first boat is sailing, and a second boat is in development. Some of the boat parts for all teams are supplied, by agreement, by a single provider, such as foils, control arms and composite rigging; mast construction, however, is up to each team. Southern Spars won the contracts to build masts for Team New Zealand, Luna Rossa Prada Pirelli and Ineos Team UK, and it will build three for each team. The mast packages are estimated to be about $1 million each. (American Magic hired its own team to build masts.)
The additional work will add roughly 20 percent in sales for Southern Spars. Hauser says the company has 250 employees in New Zealand and about 600 globally. Due to the extra work, they are currently running extra shifts in the New Zealand facility. They put in 170,000 work hours in 2018 and 220,000 last year. That will increase to 250,000 this year.
In addition to the direct business and employment being brought in by the Cup campaign, companies such as Southern Spars are counting on the Cup to bring them new and strengthened recognition internationally for the innovative work of enterprising Kiwis.
“We find if someone makes a trailer pad, rigid inflatable or any other product, the ‘Made in New Zealand’ label carries high credibility, as Swiss watches do for Switzerland,” Busfield says. “We may not build the most, but we build at higher quality and a higher price; people respect the quality that comes out of New Zealand.”
This article originally appeared in the February 2020 issue.