New US boat building venture in Zhuhai, China

by Lori Becker, Palm Beach Post on 29 Jul 2008 ave Adams has sold yachts for more than 20 years. Now he's going to build them. The yacht broker from North Palm Beach is going halfway around the world to craft his sleek, super-sized vessels, building a 12-acre shipyard in China.

The self-deprecating 49-year-old doesn't fit the image of a fast-talking, brassy entrepreneur. Wearing shorts and boat shoes rather than a suit and tie to a recent business lunch, he was blunt about the obstacles ahead.

'I can't say the timing is perfect,' Adams said, admitting it's an audacious move when the U.S. economy is on the skids. 'It's a chore. It's hard work. It's a risk. ... But right now the market is in the larger yachts.'

Adams has teamed up with Greek venture capitalist Christos Livadas, who is footing the estimated $12 million bill for the yard, along with another promised investment of $9 million over the next decade. The duo plans to build megayachts up to 180 feet long, both production and custom-made.

The Tricon Marine shipyard is being built near the city of Zhuhai, near Macau and Hong Kong. Adams and Livadas say it will be the first North American-owned and operated shipyard in China - packaging their business acumen of the Western world with the low costs of land and labour in Asia.

'Our value is better pricing over an American or European yard will be better service and quality than other Chinese yards,' Livadas said.

Adams has been on the water since he was a boy. As a teenager and young adult, he taught sailing and ran fishing charters and restored and designed boats. In his mid-20s, he went from his laid-back lifestyle to the high-pressure yacht sales businesses, where the money can be feast or famine. He eventually launched his own brokerage, Premier Yacht and Ship, in the mid-1990s, selling sport fishing boats and motor yachts.

In search of a line of new boats, he was a dealer for boat builders in China and Taiwan. He worked with Chinese builder Pama Yachts to bring a 54-foot cruiser to the United States and sold his first one to Livadas in 2002. Adams worked with Pama on a dozen or so yachts but grew frustrated with the manufacturer's delays and quality control. Livadas offered a solution: 'He kept saying, 'You need your own shipyard,' Adams said. 'I kept saying, 'You're out of your mind.'

Livadas' business is finance. As an investment banker, he helps companies raise money to build their business. The 45-year-old has focused on the oil and gas and technology sectors, but with Tricon he's combining business with pleasure.

'Yachting is not normally my business. It's more my passion,' said Livadas, who now calls the Bahamas home and has logged about 20,000 miles aboard his yacht over the past three years.

The two launched Tricon three years ago, buying land in Zhuhai in October 2006 and breaking ground on the shipyard last September.
The project is slated to be finished late next year. The first phase opens later this summer.

The factory will house about 16 bays to build yachts ranging from 80 feet to 180 feet in length, maybe longer. Customary in Chinese factories, the grounds will include dormitory housing for about 360 workers. And it will have game rooms, a library, swimming pool, kitchen and restaurant-style canteen - perks not generally found in China but add-ons that Adams hopes will attract and retain the best workers.

They've hired 80 employees so far, with plans to reach 150 by year's end, Adams said. Among the first on board is Steven Cooper, a former senior designer with West Bay SonShip Yachts Ltd. in British Columbia, Canada. Cooper handles day-to-day operations at the Tricon yard as General Manager.

When Tricon is at full capacity, Adams' goal is to build 10 vessels a year, reaching up to $60 million in sales. But 'I'd be happy to launch three yachts a year,' he says. Tricon is already building its first vessel in a temporary space near the construction site. It's an 88-foot motor yacht for another new firm, Argos Yachts.

Livadas and Adams have partnered with a group of European investors who will market and distribute Tricon-built boats under the Argos brand. The first Argos is set to launch early next year.

Some shipyards build their own retail brands, but Tricon will build vessels mostly for other labels. Livadas said his goal is to build megayachts for one or two non-conflicting brands and larger custom yachts under the Tricon name.

Adams, who travels to China about 100 days a year, said he is courting several builders and yachtsmen. His pitch: better quality for less money.

Tricon's key advantage is low-cost labour. By building in China, Livadas estimates, Tricon's labor costs will be about 30 percent less than Taiwanese yards and more than 60 percent less than American and European yards. The money saved will allow Tricon to spend more on materials and craftsmanship, and still price below competitors, Adams said.

'To build the 88-foot Argos in Europe, it would have to retail for $6 million to have a decent profit margin,' Livadas said. 'We can build the same vessel with even better materials and quality and can offer it for' $4 million to $4.5 million.

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