Henk De Vries

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Superyacht Business
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   Industry insight for decision makers    S  UP E R Y A C HT  B  U  S I   N E  S  S   w      R E  G I   ON F  O C  U S :  L AT I  N AME R I   C A   |    w       I   N D  U  S T R Y I   N  S I   D E R :  T R A I   N I   N  G E  S T A B L I    S H ME N T  S  |    w      Y AR D I  N S I   G HT :  MB ‘    9 2 F E B R  UAR Y 2  0 1  5   |   I   S  S  UE 4 4  Latin America Picking up the pace. The region’s potential is driving a new commercial market Issue 44 | February 2015 www.superyachtbusiness.net Infrastructure Spotlight on the huge investment under way in St. Kitts and Nevis Dynamic Positioning An authoritative guide to the technology being embraced by yachts Crew training The courses and facilities raising the bar to meet with new regs 3D Printing A revolution or a bridge too far for the superyacht industry? + Feadship’s director sets the record straight on fully custom building Henk de Vries MB‘92 grows Expansion plans will meet the demand for more complex refits  FEBRUARY 2015 | WWW.SUPERYACHTBUSINESS.NET 37 The interview Henk de Vries Director | Feadship From management consultant to established industry leader, Henk de Vries has a clear view on the production of fully custom builds and has redefined Feadship’s yacht building process INTERVIEWED BY JULIET BENNING I f ever there was a demonstration of marketing prowess at a yacht show it was the ‘House of Feadship’. A short tender ride from the Fort Lauderdale show, the Italianate villa provided a sanctuary away from the public eye in which Feadship could discreetly conduct its business. It is in the villa’s waterside gardens that I meet with Feadship’s outspoken director, Henk de Vries. Bumping into him earlier in the week he had told me there was a bone of contention that he wished to address, namely his concern over media portrayals of semi-custom builds being quicker and more efficient than fully custom. It was this desire to re-educate me, and reveal more about the super-efficient build processes at the Dutch shipyard, that became the cue for our interview.After disembarking the Zeelander tender, I was given a tour of the premises – De Vries, as one might expect, was in a client meeting that had over run. The extravagant and rather baroque interior of the villa was a hive of activity as catering staff embellished it further with decorations for the Great Gatsby party that was being held for Feadship crew that evening. After my exploration I was in no doubt that Feadship’s clients would feel right at home negotiating deals in such charming surroundings. Entrepreneurial spirit  Judging from Henk de Vries’s body language and mood, the show was going well for him. He seemed relaxed with a youthful vitality about him, and dressed in a pale blue cotton shirt and slacks, he projected an air of informality. CAREER DETAILS w  Current role : Director of Feadship & CEO of Koninklijke De Vries Scheepsbouw w  Work experience : De Vries studied at Amsterdam Free University and worked in the high-end audio business before becoming a management consultant. He joined Feadship in 1987, as sales and financial manager of the company. In 1996 his father Bieb retired and Henk became CEO alongside his cousin Tom, who took on the role of COO. Henk de Vries   Feadship’s director has a strong vision for fully custom builds    TO THE POINT 38  WWW.SUPERYACHTBUSINESS.NET | FEBRUARY 2015 The interview Do you prefer signing new contracts direct with the client or through a broker or brokerage company? It is hugely subject to the client. There’s no real preference. A broker can be great for smoothing a deal, but when brokers compete with each other for a deal things can become murky for us. Do you enjoy yachting yourself? As a kid I had a sailboat and was on the water everyday. As an adult I have a sailboat and I’m never on the water. I live in Amsterdam and I have just bought an old 20ft motorboat that maybe I will start using in the canals. I have a sailing boat of similar dimensions that I keep on a lake near the shipyard and I use that maybe twice a year. It’s a boat that my grandfather built in 1933 so it’s tremendously high maintenance. That keeps another family member busy! What is your relationship with the Feadship shareholders like? It’s interesting. The dynamics have not changed that much because typically LVMH lets the company run itself. They’re not trying to tell us how to do our own work but they do have an opinion about marketing as they are a marketing powerhouse and that works to our advantage. They help us get sharp. What is Feadship’s attitude towards R&D? We try to allocate 1% of turnover to R&D annually so there’s a budget, a programme and a department. The department is part of De Voogt Naval Architects. We call these guys ‘knowledge development’ and they help us to develop innovative things for our customers. What’s your feeling towards concept yachts? We used to present the Feadship concept yacht at a boat show every year but after six or seven of those we decided to no longer do that as every guy and his brother has decided to produce concepts. Some are just plain bullsh*t and you simply cannot build them. So how do you plan to market new developments? We are still debating among ourselves how to communicate new developments to the market without giving all our secrets away. Where does competition come from? The nice thing about having produced so many boats is that there’s always a number for sale second hand so occasionally you can say that my biggest competition comes from my own fleet – especially if the boats are maintained nicely. The only way to compete with your own fleet is to make sure the new yachts But far from the established industry leader he is now, De Vries’s entrance into the family business had at first been somewhat reluctant. Demonstrating an entrepreneurial spirit of independence, he had already carved for himself a career as a successful management consultant when he was invited into the Feadship fold. He says: “In 1987 I was in between jobs and I was looking around as to whether to continue in my current management consulting field and my father, who was in his mid 50s at the time, said ‘Are you coming or not?’ I said ‘I dunno, why should I?’”.De Vries makes no secret of this reluctance, but why was he so hesitant about joining the successful ranks of his various family members? “It was really the complexity of family enterprise that put me off. Working with the five shareholders; uncles, cousins and brother. But I then had a meeting with my four uncles and I was really impressed with how entrepreneurial they were. I wasn’t previously aware of it,” he explains. Swift to make his mark on joining the family business, De Vries made a comprehensive analysis of the market and was soon given the position of sales and financial manager. In 1996, De Vries’s father retired and he and his cousin Tom took over the company, taking on the roles of CEO and COO respectively. “When I joined it was one company with one small subsidiary, about 110 employees and a turnover of about NLG35-40m – that’s not even € 20m. Now Feadship as a whole group has 1,500 employees, 900 of which are De Vries, and makes many times over the turnover we achieved in the ‘90s.” De Vries tells me, evidently proud of this significant growth. Steep learning curve Eager to enlighten me further on Feadship’s skill as a totally custom builder, De Vries explains about its brief foray into semi-custom builds: “In 2003 and 2004 our market was exploding. There was so much demand and everybody who was smart grew one way or another – either by taking over other companies or by broadening their spectrum. We figured that we were going in two directions: one was towards much bigger yachts (at that time 70-80m) and one was going into smaller boats and standardising them in order to build De Vries has seen significant growth at Feadship since 1987  FEBRUARY 2015 | WWW.SUPERYACHTBUSINESS.NET 39 Henk de Vries them competitively. That became the SL39, of which we eventually built three and the F45 Vantage, of which we eventually built six.” The venture provided the shipyard with a steep learning curve. “In hindsight it was a good way to get a grip on what drives cost, but it was also an eye opener that our companies are not suitable for building a standardised product. It is not what we do,” says De Vries, taking on the mantel as a purely custom yacht builder with a stubborn pride. So what went wrong? “My guys missed the challenge of custom work,” he laughs, as if his staff were his children and he their father, delighted by their progress at school. “We are so geared towards building very specifically towards a client and what they require. That is just what we do. That is what’s embedded in our genes. So after delivery of the last F45 about three years ago, we had some strategic sessions and we concluded what we want to do is purely custom.”It was after the global financial crisis hit that Feadship took a magnifying glass to its build processes, fine tuning every detail in order to create the most efficient fully custom builds. Returning to one of his srcinal points De Vries says: “There is a misunderstanding that when you develop a semi-custom platform that it is a better, cheaper and quicker way to build. It’s a very narrow view on how you run a superyacht yard.”De Vries continues: “In 2008 it was difficult to sell, even for us. Come 2009, we tried to explain to our workforce that we really had to revisit the way we produced boats and come up with a more efficient and smarter way to build. At the time there was a tremendous pressure on prices and it got to the point where yachts were being given away at 50% less their value. “We didn’t want to cut corners on quality. A typical way that many of our colleagues were cutting costs was to standardise their product – either the entire boat or the structure of the boat. We did neither. Instead we standardised the process. With the help of a consultant we literally redefined the way we look at building yachts. We became substantially more efficient.” Given such an overwhelmingly successful outcome it is almost surprising that De Vries should consent to give away these secrets. “We took a much more structured approach,” he explains. “You have a process and you define the milestones in the process between 12 and 16 measuring points and at each one you define what you want to know, how far you want to be and where you are with the information about the cost and the manhours. And if the project is not ticking all the boxes the reporting gets to the top of the company.” Challenging new plan The process of thoroughly auditing builds means the management team are often in the yard keeping a sharp eye on progress. “We are capable of asking very uncomfortable questions in order to get all the boxes ticked before we go on. We stop everything before we get to the next stage in order to understand what needs to be improved. The review is simply a line that falls out of the regular purchase reporting. The reports are created by the project teams themselves in a format that they use to monitor the product. It is high-end managing,” he says. But it wasn’t all plain sailing and attempting to convince a large and very well-established workforce about the new plan proved challenging. De Vries explains: “It took us six months to convince our staff that we needed to do this. We had all these projects on and we were working overtime, but despite being busy the order intake was lower than before 2009. We knew we had to be prepared. It took us until the middle of 2009 to get the consciousness in the collective company psyche that we needed to change something.”But it wasn’t just the in-house staff who would be challenged by the post-2008 shake up. De Vries continues: “In the spring of 2009 we contacted all of our major suppliers to explain the need to reduce costs by 15%. The small suppliers were sent a letter and the 50 most important ones were invited in for a face-to-face conversation. Of the 50 most important ones, 40 are cooler than the old ones, which means constant innovation, both in design and technology. What’s your relationship with your biggest competitors like? We say ‘hi’. We drink beer together, together we’re members of SYBAss and we beat the sh*t out of each other in the marketplace. It’s a competitive market but there’s a lot of respect between the good companies. Feadship strives for constant innovation After delivery of the last F45 about three years ago, we had some strategic sessions and concluded what we want to do is purely custom
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