Decoding the Intricacies of Superyacht Refit Contracts: It's More than Just Money

Landing a refit contract is quite like treading a tightrope, balancing owners’ expectations with shipyards’ practical necessities. Clients often balk at the ‘mark-up’, a percentage added to a quote covering overheads for the shipyard. Shipyards assert it as a necessary component to cover overhead costs. The term ‘overhead costs’ could send one spiralling down a rabbit hole. Insurance, maintenance, sales, marketing, finance and administration costs are common touchpoints. But the defining pillars are health, safety, sustainability, and investments.

Sustainability, encapsulated in all its glory of environmental, social and governance (ESG) factors, allows a shipyard to allocate important investments. Improving working conditions, better training, and social initiatives come with their price tags, enhancing the industry’s ethics while denting the allowance.

Investing in the future may seem a solid option, but for superyacht build and refit companies, it’s a survival tactic. In a fiercely competitive and technology-saturated industry, being far-sighted is the game-changer. Warren Buffett’s wise words elegantly encapsulate the idea, ‘Someone’s sitting in the shade today because someone planted a tree a long time ago.’ Forward-thinking investments, both soft such as training and hard such as better facilities, are thus essential.

Hard investments like ship-lifting facilities and environment-friendly initiatives like solar panels, water-treatment systems and on-site waste recycling can enhance operational capacity and efficiency. Catering to larger vessels launching in the future necessitates such investments, thereby justifying the mark-up costs clients often misunderstand.

In essence, it’s not ‘money for nothing’; it’s money for a sustainable, safe and scalable future in shipyards.