March 26, 2009 Luxury Lineage

Volume 12 | Issue 2

Sports cars, vacation homes, jewelry and yachts have driven the luxury market in Brazil to reach an astounding us$4 billion. Schaefer Yachts

Brazil possesses 15 percent of the world’s fresh water which includes some of the world’s longest rivers, and an abundance of natural and man-made lakes, lagoons and reservoirs. In addition, Brazil has an Atlantic coastline of over 4,500 miles with some of the world’s most beautiful beaches, enchanting bays and tropical islands. Brazil is the fifth largest economy in the world and possesses a growing middle class with more and more spending power. With increased spending power the Brazilians are becoming more demanding and select, giving rise to an expanding luxury market.

A country with a long tradition of outdoor sports and a love of the water, Brazil has vast natural reserves of water. Its youth sports culture and the bustling economy could not be more ideal for yachting today.

Brazil’s first yacht club was established in 1906 in Rio de Janeiro. “Young affluents” – roughly corresponding to the Generation X and Millennial generations – play an increasingly important role in the target market for global luxury goods. In developing luxury markets, such as Brazil, the population as a whole is more youthful and the median age of these young affluents is only 28.2 years. What is more according to O Globo, Brazil’s leading newspaper, in the global luxury market approximately 26 percent of spending goes for yachts and cars.

Not surprisingly with a stable Brazilian economy and a strong real, the Brazilian market for leisure boats has grown tremendously in recent years, particularly through the efforts of domestic boat builders such as Marcio Schaefer. Schaefer is the founder, president and principal designer of Estaleiro Schaefer Yachts Limitada. Schaefer has always loved boating and has sailed since he was a child. As an adult, he participated in a variety of nautical industry activities, and is now considered one of Brazil’s most experienced boat builders.

A yacht designer for more than 20 years, he studied naval architecture at the Escuela de Nautica Deportiva in Buenos Aires in the early 1980s. Schaefer worked at several shipyards in Brazil, Argentina, Spain and England where he designed boats, developed new products, and even built carbon fiber race boats. The Schaefer 31-foot sailboat was a prominent racer in the last decade and is currently one of the most competitive ORC-CLUB-class vessels. In fact, the boat won the 2002 Brazilian championship. Above all, however, Schaefer himself is a four-time Brazilian ocean race champion. He has participated in many regattas, such as the Buenos Aires – Rio, the Cowes week, La Niolargue, Rolex Swan World Cup, and in the Atlantic Crossing.

ADVANCED CAPABILITIES
Founded in 1992, Schaefer Yachts is located in Palhoça, Santa Catarina, some 1,100 kilometers south of Rio de Janeiro at a location alongside a river with an outlet to the sea. Yachts are produced at a self-owned 60,000-square-meter plant. The facility is the first plant of its type in Brazil and the most advanced in all of Latin America. It is fully sectorized and was conceived to produce yachts using production line methodology and fiber glass technology. The boats are built by an infusion technology in which fiber glass fabric is laid up over dried Gel-Coat, then saturated with resin. Divinycell, sheets of polymer foam, are later bonded to the Gel-Coat for reinforcement. The layers of fiber glass are what give the hull its strength. The sheets and resin are worked with metal rollers to create a durable bond. Recently, the company bought new equipment to create computerized moulds of the body, which will speed up model launches by 20 percent. At present the production facility produces around 40 units per month and plans to produce a total of 475 units in 2009. The company currently employs over 600 people and has been experiencing growth of more than 20 percent per year for the last five years. In 2008, the annual turnover was about US$80 million.

Under the Phantom brand name, Schaefer Yachts produces technologically advanced luxury power boats and day cruisers. Models range from 18 feet to 60 feet. Marcio Schaefer and his team design the Phantom models from beginning to end focusing particularly on nautical design and construction approaches. They are known for the functionality of the interior spaces and the excellent distribution of cabin furnishing. Schaefer’s personal experience as a sailor and as a designer is what has allowed the Phantom brand to overcome stiff competition in this very restricted market. More than 1000 Schaefer-designed Phantom boats are currently sailing in Brazilian waters. Schaefer said, “From beginning to end Phantom uses only top quality materials. The company’s reputation is based on quality, luxury and style not price.” Schaefer Yacht’s high levels of customer satisfaction and excellent resale value make the yachts an attractive leisure investment. For this reason, some of the most popular models have a waiting list of up to a year’s time.

One of the major reasons for the company’s success has been its excellent business strategies based on verticalization, specifically targeting the select Brazilian luxury market and a limited exportation policy. When Schaefer Yacht began production 17 years ago, there were no local suppliers for many important parts. Stainless steel parts, cabin furnishings and nautical finishings simply were not made in Brazil. Over the years Schaefer Yachts has worked very hard with Brazilian manufacturers, suppliers, and retailers to develop a reliable national supply chain and distribution system to meet its production needs. In fact, since some products were not available commercially in Brazil, these supplies are now manufactured directly at the production site by Schaefer Yachts itself.

A TROPICAL PARADISE
Schaefer Yachts may have imported the manufacturing techniques from abroad but the design, style and final products are totally Brazilian. Schaefer Yachts designs are not copied or adapted from American or European vessels, which are conceived for conditions that are different from the rougher Brazilian waters. Rather, Schaefer Yachts are designed to sail in the tropics and use solutions its European or American competitors never dreamed of. Schaefer has completely “tropicalized” the design of the yachts to fit the Brazilian lifestyle. Targeting the young and affluent Brazilians, Schaefer tailored his designs to their tastes by incorporating more open deck spaces, by providing high speed stability and by using exotic materials in the cabins.

The commercial success and the original design of the yachts in Brazil opened the doors for sales in other emerging luxury markets such as Africa, China, Eastern Europe and India. Schaefer’s Yachts have also been successfully exported to Europe and are especially popular in Spain, Sweden and Norway. At present about 20 percent of volume and 30 percent of value is derived from export sales. The export policy also helps keep the factory working at capacity all year long because of the hemispherical differences in peak summer season demand. Schaefer said, “In spite of the financial crisis, exports have not fallen off from last year and we expect the same level of orders this year.”

Schaefer Yachts also takes special orders for public safety and security vessels such as rescue, fire fighting, police patrol, and military transport. Last year, for example, Schaefer manufactured three high speed patrol boats for the Customs Department. These boats are now used to patrol the harbor at Santos, Brazil’s largest port.

Today Schaefer has one of the most complete product catalogues in Latin America. The many different sized models feature both open and fly bridge versions. The models are designed to be fun, seaworthy and safe. The Phantom 290 model set a sales record as the most popular model in its class with over 500 units sold since it was first launched. In 2008, the new Phantom 260 was the sensation of both the Rio de Janeiro and Sao Paulo Boat Shows. The yacht is a 26-foot day cruiser that sleeps eight passengers. Its hull is made of light weight Divinycell and biaxial cloth, which is lighter and offers less resistance in the water. The cruiser has interior spaces, which are both beautiful and functional. It features a spacious cockpit and large platform at the stern. The Phantom 260 also boasts of leather couches, a built-in kitchen, a home theatre, air conditioning, and an electric barbeque on the recreational platform. The Phantom 260 comes in a standard version as well as an open version for use with an outboard motor. The Phantom 260 is priced at about $65,000 depending on currency fluctuations.

SCHAEFER YACHTS IS A LEADER IN BRAZIL.
“By adapting to our own public we were able to take on the bigger manufacturers. Elegance, comfort and functionality are what our customers are looking for,” said Schaefer. Adventure cruising is all about finding new, unexplored places, matching wits with the sea and the environment, coming home with stories of fascinating accomplishments and some dangerously close calls. It seems that Schaefer Yachts has applied this yachting model to its business strategies and come out on top.

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