'Maximising the potential of new boating markets and embracing change will be key to the future prosperity of the marine industry', stated Paolo Vitelli the President of the Italian Trade Association UCINA, making it the theme of his keynote industry address at the Marine Equipment Trade Show in Amsterdam in November last year. The United Arab Emirates (UAE) was one the new markets flagged up by Vitelli in his address, and with good reason, his own company Azimut Bennetti, has been spectacularly successful in the Gulf market. Dubai based Azimut distributor Art Marine is the market leader in imported larger boat sales in the UAE and the surrounding Gulf countries.

While Dubai is important to the region as a boating hub, the lack of marina berths is slowing larger boat sales. The real growth in the Dubai market is a year or more away, when the vast number of residential developments in Dubai, (mostly waterside based), will be completed and additional marinas become operational. Currently more boats are being sold in the neighbouring countries, Kuwait being the strongest market with Bahrain and Oman also developing fast.

Bahrain

Bahrain is the smallest of the Gulf States and is very much allied with the sea being composed of a collection of over 30 islands linked by bridges and causeways. Bahrain's strategic location in the Gulf with natural harbours ensured from the earliest days that it quickly established itself as a main trading centre for the region. Oil was discovered in commercial quantities in 1932 and this combined with the Bahrain's natural trading and commercial ability, ensured that the country became the most advanced in the Gulf until the late 1980's when it was overtaken by Dubai as the commercial hub of the Region. However Bahrain is still one of the most outward looking and advanced countries in the region with close ties with the UK and the US. In Bahrain the population of over 700,000 includes a relatively high number of expatriates who mix easily with the Gulf Arabs.

Bahrain - Boating infrastructure and marinas

Bahrain's waters are ideal for leisure boating. Its islands provide opportunities for exploration and sheltered waters when the strong Shamal desert wind blows, the clear blue waters provide good fishing, waterskiing and diving. Leisure boating takes place from several locations, the Marina Club, which has berths for some 400 boats and occupies a prime location near the business district, Al-Bandar resort which has 300 boats in the water and on its dry stack and the adjacent Yacht Club which takes a further 250 boats, mostly sailing yachts and dinghies.

Boating in Bahrain is set for a substantial boost, like other Gulf States; there is substantial infrastructure and property development taking place with ten new waterside property and marina projects in Bahrain under way. These include the impressive Bahrain Financial Harbour complex, Bahrain Bay, Durrat Al Bahrain and the Amway Islands, all of these projects have marinas and will be completed over the next five years. According to Ms Jenan Al-Derazil of the Ministry of Information and Tourist affairs 'Most buyers of the residential development in Bahrain will be nationals of other Gulf countries with few Europeans looking for second homes. There will also be a substantial number of people who work in Saudi Arabia who can commute using the causeway from Bahrain'. It's clear that property purchasers in Bahrain will be different from the large number of foreigners drawn to the glitter of the Dubai residential property market.

Bahrain boating market

Leisure boating is extremely popular in Bahrain, although because of the relatively small population the market is not large with an estimated 1,500 leisure boats. Most of the boating is carried out between April and November as Bahrain's proximity towards the northern end of the Gulf ensures that the winters can be windy and cold. Bahrain offers a much wider market for boating equipment, electronics and engines than imagined as much imported equipment is sold on to customers in Saudi Arabia and Iran. Product lines are generally sourced from the USA because the Bahrain dinar is fixed to the US $. Bahrain is almost devoid of suitable boat importers because of the small size of the market and Bahrain customers will willingly travel to boat builders in the UAE or further to Europe or the US to purchase direct. The growing Dubai International Boat Show in March also receives an increasing number of Bahraini customers.

One of the main leisure marine distributors in Bahrain is Kooheji and Sons who are the one of the longest established Yamaha outboard motor dealers in the world having represented the brand for 45 years. According to Mohammed Kooheji, Director for special projects; 'In the past the maximum number of imported boats in the good years has only been about 30, now we are anticipating that the market will grow substantially in the next four years for both boat and engine sales with the completion of the new marina developments. We are actively looking for boat brands to represent in Bahrain'.

Bahrain Boat building

The main boat builder is Al Dhaen Craft who concentrate on boats between 20` to 43` producing up to 100 units per annum. Al Dhaen have been building boats since 1989 and have established a strong reputation for quality and design innovation, charging higher prices than other Gulf builders. The range includes a sports fishing range from 21` to 36`in length, a 40' sports cruiser and a 43' flyridge. According to Sales Manager Ziad Abou Jaoude 'Our main focus is now on export to markets outside the Gulf region and we have established dealers in France, Australia, Thailand and the Scandinavian countries. We are extremely busy with a larger order book'.

The future for Bahrain looks positive as it moves to re establish itself as a regional business and finance centre with numerous major infrastructure and waterside property developments under way. Importantly these include a recently announced causeway link with Qatar, which will open up communications and allow access to Qatar for the Bahrain work force. All of these factors indicate growth for the Bahraini marine market.

Kuwait

Kuwait is currently the strongest boating market in the region. The country occupies a strategic position at the head of the Gulf flanked on the east by the Gulf waters. Only 18,000 km square in size Kuwait has one of the most productive oil fields in the world and consequently one of the richest economies. Oil was first discovered in the early 1930's and by the time the first oil wells were in production in 1938 it was obvious that the country was virtually floating on oil. The resulting revenue has allowed the ruling Al Sabah family to develop an impressive infrastructure and welfare system for its population. Despite the well known history of the Iraq invasion and the subsequent Gulf war, Kuwait still has enormous financial reserves, second only to Saudi Arabia. The Kuwaiti people are some of the most educated and sophisticated in the Gulf and travel widely.

Marinas and boating infrastructure

There are four large marinas in Kuwait and six smaller ones with berths for over 2,000 boats; even so there is an acute shortage of marina berths, such that large premiums are now being paid in order to obtain a berth. According to Adel Al-Sumait Managing Director of Al Boom Marine who imports Mercury engines and several boat brands including Gulf Craft 'The lack of berths has become a restricting factor for larger boat sales, new marina projects are planned but will not be available for 2/3 years'. For those with smaller boats on road trailers the situation is easier with the provision of wide public access slipways.

Kuwait boating market

The Kuwait market is the largest in the Gulf in terms of boat numbers, according to the latest figures from the Kuwait Government there are now over 18,000 registered leisure boats, with some 2,000 boats in marina berths the balance are kept on trailers making the small outboard powered boats sector up to 35' very large. Kuwait has calm sea conditions that suite this type of boating although the winters are colder which makes the boating season April to November, the reverse of that in the UAE, Qatar and Oman.

Most boats are owned by Kuwaiti nationals, there are fewer expatriates than in the other Gulf States. Kuwaitis have always been sea people and with a population of some 943,000 Kuwaiti nationals, the boat ownership per person ratio is estimated at one boat for every 52 Kuwaitis, a figure that is high, matching many markets in Europe.

The invasion of Iraq by the allies in March 2003 resolved the uncertainty of possible further conflict and gave the leisure boating market a boost as boat owners were able to extend their cruising waters. This has resulted in an increase in interest in larger power boats although small power boats are still the most popular choice. The majority of boats under 36', about 85% of the total market by units, are imported from Gulf boat builders. US built imports are most favoured boat brands from outside the GCC.

The Kuwait market is a large one for outboard motors with Mercury having the largest market share. The market is mainly an imported one for boat sales and there is a network of five distributors who sell over 600 boats annually. According to Ahmad Al-Ameeri, Managing Director of Seas and Deserts Group who import Sea Ray and Polar boats from the USA 'The market picked up well after the Iraq invasion of 2003 and 2006 has been our best year ever with sales of nearly 100 boats. However there are signs of the market softening slightly due to the lack of marina berths, sales are also sensitive to stock market levels'.

There is only one sizable leisure boat builder in Kuwait, Gulfmaster, according to Chairman, Issam Al Gharabally 'We build about 20 leisure boats up to 40` in length a year and are looking to develop our manufacturing operations to increase production, the market is extremely buoyant in Kuwait'.

According to Mohamed Alsaif the General Manager of Bahry International Magazine the Arabic language boating magazine for Kuwait 'The market in Kuwait in 2006 has been the best for 30 years for all of the boat dealers, however the enthusiasm created by the buoyant market conditions is tempered by the reality that marina berths are in very short supply and likely to remain so for the next few years'.

Oman.

Several factors in the past have restricted the growth of leisure boating in Oman, a lack of oil and gas wealth, a conservative approach to tourism and a lack of marinas being key reasons. Now the market is changing for leisure boating with record oil and gas revenues, a developing tourism industry based on the rich heritage and culture of the country and a growing network of marinas.

Oman - Boating infrastructure and marinas

According to Mohammed Al-Sinani the Director General of Planning for the Ministry of Tourism 'Currently tourism represents only 1% of the Omani GDP but its set to grow as it has been identified as a key sector. Oman takes development of its coastline very seriously with emphasis on preserving its rich heritage and the natural habitat and we feel that leisure boating is an activity that can fit in with this by providing a network of marinas along the coast. The marinas will mainly be part of integrated tourist resorts where property can be sold on a freehold basis to overseas nationals. We have two marinas in operation in the country with another ten under construction or at the planning stage, two in the north of the country in the Musandam area, one in Sawadi, five in the area of the capital city of Muscat and two in the south of the country in Salalah.' The development of a network of marinas will open up Oman as a serious boating area and as a stopover for yachts making the passage from the Mediterranean and the Red Sea to the Gulf and Asia.

The Wave

The Wave will be one of the first Integrated Tourism Resorts with residential property. The development will include four hotels, 2,500 residential apartments and 1,500 villas and town houses. Part of the development will be on reclaimed land going out 600 metres from the shore which will embrace a 300 berth marina, to be operational by 2009 and a flushing canal system that will bisect the residential areas. According to John Langford Vice President for Sales and Marketing 'The Marina is at the heart of the development which we have had enormous interest in, phase one released early in 2006 sold out rapidly and our second phase is now 90% sold out. As well as Omani nationals we have a mixture of 24 nationalities buying properties with a high percentage of Europeans and Indians with nearly 15% of the total sales being to British . The marina will have berthing for 300 boats with another 300 being accommodated on a dry stack and a 70 ton marina hoist for a repair facility'.

Marina Al Bander Al-Rowdha

Marina Bander Al–Rowdha is situated close to the capital city of Muscat and was the first marina in Oman. Operational since 1995 the Marina is owned by the Government and managed by the Dubai based Island Global Yachting Group who took over on in 2006. According to Manager Bob Looker 'The marina is full with 140 boats on water and 140 on land, we are looking to double these numbers with expansion in the near future. One of our key objectives will be to re structure the berthing as the trend is for larger Motor Yachts over 15 metres. We are getting increasing interest from overseas customers from other Gulf countries and even from Europe for berthing, costs in Oman are relatively low, fuel is 20% of European prices, berthing for a 28 metre Yacht is 6,500 euros per year and we have our own travel lift and workshop facilities available for maintenance'.

Barr Al Jissah Resort

Completed early in 2006 the Barr Al Jissah Resort near Muscat is situated in a bay surrounded by mountains and comprises three Luxury Hotels, private apartments and villas and is managed by the Shangri-La Group, the complex has a 50 berth marina, the second operational marina in Oman. Manager Simon Stephen is overseeing the final completion of the project, 'The marina is looking after three sectors, the resort charter boat fleet, berthing for boats owned by the residents of the 78 villas and apartments and for visiting Yachts. We are expanding the marina shortly to 80 berths, adding six 30 metre and one 60 metre berth for larger yachts. We anticipate Muscat becoming a regular destination for larger Yachts from Dubai and other Gulf countries'.

The Oman Marine Industry

With the number of leisure boats in Oman less than 1,500 the market has never had the volume of scale to support any boat sales operations and most customers in the past have purchased direct from the manufacturer. Local builders based in the UAE and Bahrain having supplied some 90% of the boats sold. With the growth in the marina network this will be change as boat manufacturers realise the growing market potential. All outboard engine manufactures are represented in Oman, there being a sizable market with the fishing fleet of many of thousands of fibreglass boats in the size range up to 10 metres. There are no leisure boat manufacturers in Oman, although Amiantit Oman, a large company in the plastics business in Muscat manufacturers fishing boats under licence from Yamaha in Japan.

With the growth of the marina network the leisure boat industry in Oman is set for sizable growth with boat numbers likely to double in five years.

Gulf Business check list

For the newcomer to the region business with the marine industry in Bahrain, Kuwait and Oman is not unduly difficult, although it can spring a few surprises, some pointers to consider are:

• English is widely spoken although efforts by foreigners to learn a few Arabic phrases are much appreciated.
• Respect the local culture and the Islamic religion. Information on this can readily be learned from guide books to the area. The Lonely Planet publication ‘Arabian Peninsular' is one excellent example (ISBN 1 -7 4104 – 294 -1) and for Business and Cultural considerations ‘Don't they know it's Friday' by Gulf Business Books (ISBN 1 86063 074 X).
• Airlines and Hotels in the Gulf are of the highest standards, Hotel prices have doubled though in the boom times of the past two years.
• Local business men are traders first and last, haggling over the price and business conditions is a way of life inbred over generations. Enter into the spirit of it!
• Personal relationships are vital and it takes time to build them with Arabs, don't expect to parachute into the market and get an order. Be prepared for the long haul.
• Distribution contracts need to be considered carefully as they will be conducted under local Shariah law and registered with the Chamber of Commerce. Performance target clauses may not be valid as agency contracts can usually only be terminated with the agreement of both parties.
• Good agents and distributors are in short supply in the marine industry and good manufacturer support needs to be budgeted for.
• After sales service and product support is a most important aspect to get right, a good reputation will do more for your sales than any amount of promotion.

Web site links

Al Dhaen Craft Bahrain www.aldhaencraft.com
Al Boom Marine Kuwait www.alboommarine.com
Bahry Magazine Kuwait www.bahry.com
Kooheji Marine Centre Bahrain www.koohejigroup.com
Oman Tourism www.omantourism.gov.om
The Wave Development Muscat www.thewavemuscat.com
Barr Al Jissah Resort Muscat www.shangri-la.com
Island Global Yachting www.islandglobalyachting.com
Seas and Deserts Kuwait www.seadesert.com
Art Marine Dubai www.artmarine.net
Gulf Craft www.gulfcraftinc.com
Dubai International Boat Show www.boatshowdubai.com
Bahry Boating magazine www.bahry.com
World of Yachts and Boats www.worldofyachts.com
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