Balance Catamarans is Born: A Bold Move in a Challenging Market

Multihull Quarterly Publisher George Day discusses the launch of a new catamaran brand with industry veteran Phillip Berman, New Zealand designer Roger Hill, and Chinese builder Lee Xiangong.

George Day (GD): Phil, with factories closing all over the world in the yacht industry as a result of the Global Financial Crisis, why have you decided to go into boat building? 

Phillip Berman (PB):  It’s always an act of madness to build boats I suppose.  But I’ve been in the industry long enough to know the primary reason brands and builders fail stems for their lack of understanding of the consumer or failure to deliver a quality product. If you design the wrong boat, or build it improperly, or are forced to sell it for an uncompetitive price, you will fail very quickly in the marine industry. As we annually sell about 50 to 60 brokerage catamarans at The Multihull Company our brokerage team have a very good sense of the market, how it breaks down in various segments, and the range of objections buyers have about different models. I can assure you it’s foolhardy to try to compete with Lagoon, Fountaine Pajot or Robertson and Caine in the Comfort Cat market. Balance Catamarans are focused on a totally different clientele and therefore built in a very different fashion.

GD: Why is that Phil?

PB: Because you have to scale your production and build process to achieve the price point buyers can afford for the type of boat they desire. The big production companies must build in a highly automated fashion to minimize labor hours. It also means they must use cheaper materials in the fabrication of their builds. That does not mean to say any of these major brands are “cheap,” but the fact is, when you are focused on a consumer who does not care deeply about performance, and is in fact focused primarily on interior volume and price, there is no reason to build a boat with lighter and more costly materials. Or to build a boat that is seldom meant to sail in nasty weather far from a port of refuge. At Balance we must spend far more on materials and labor hours because we are building a blue water sailing catamaran, not a motor-sailor for short jaunts around the protected waters of the Caribbean.

Roger Hill (RH): In the end, my goal is to design our hulls as narrow as we can after factoring in the volumes we want inside the boat and the materials we are using. If Phil and Lee were not building the Balance Cats with foam cores, and epoxy foam bulkheads and floors, and Lee was not prepared to triple the labor hours required to construct the boats for Balance, I’d have to design the hulls considerably wider and of course that would come at a significant cost to performance.

 

Lee Xiangong (LX): I’ve built over 50 of Roger’s power cats in China, and some of them are designed to travel at over 45 knots. This sort of build requires the most careful engineering and laminate schedules and of course the most costly fabrication materials. The great advantage we have at our factory in China is we can afford to use these more costly materials and spend many more man hours on our builds without pricing the Balance catamarans out of the market. In fact, all of us are very confident we are producing the highest quality performance cruising cat for the money in the world. We see no way at all the French can possibly compete with us in the same price points without either using cheaper materials, or finishing their boats inside to a far lower standard.

RH: It’s a very interesting challenge when designing and building a blue water performance cat. On the one hand you are deeply focused on weight – how and where can we shave weight without compromising strength and sea worthiness?  If you error too far toward the light side, in the wrong places, it is easy enough to create a catamaran that feels like a noodle when pushing into stiff seas. I am not going to comment here on some of the specific production cats I’ve sailed so as not to upset anyone, but what I see are two extremes – they are either very heavy, balsa core boats with marine plywood bulkheads that hold their shape well enough in a big sea, but sail very slowly, or they are built too lightly and cheaply and therefore noodle and creak when driven into large seas. I am very sure we could build the Balance Cats even lighter than we do, using reduced laminate schedules, but I use as my engineering criteria a hard sail from Auckland to Tasmania. If all hell breaks loose we want the Balance to be able to press against stiff seas without coming apart.

GD: Lee, China often gets a bad rap on quality?   What do you say about that?

LX: Generalizations about quality from country to country are pretty irrational, as if all French boats hold something in common, or all South African boats, etc. I am told that Gunboat’s used to be built in South Africa, and now they are building their bigger ones here in China. But South Africa also has turned out some very cheap, low quality builds, etc. There are many high quality yachts built here in China, and many very poorly built ones. Here in the Juhai area we have a range of very high end builders.  I will not mention the builders I hold less respect for.

PB: One of my hobbies is cycling and my “Italian” carbon bike was made right here in China. I have since learned nearly every high-end carbon bike is made in China. Along with our I Phones, computers, etc. Here in China you can get any level of quality you want.  We could very certainly produce our boats for far less than we do if we wished to lower our build standards and finish. In fact, if we were not building a blue water performance boat we could easily undersell the French and South African production builders in the Comfort Cat market as our material costs would go way down and our labor hours would be chopped by many thousands. But at Balance we are hard-focused on quality, performance, durability.  All my years in boating and yacht sales have taught me that the devil is in the details and that means the engineering, design and fabrication have to be very exacting.  

GD: Lee, what is your background in building?  What have you learned about deploying the Chinese workforce?

I took my BSC in Shipbuilding Engineering from Huazhong University of Science and Technology. I’ve been involved in many of China’s highest technology sailboat projects, including the 68 foot Clipper Round-the-World Yachts. My expertise is in mold making, production scheduling, and quality control. For the past few years I oversaw the construction of about fifty Roger Hill designed Power Cats for Arrow Cat Marine.  What I have learned about deploying the Chinese workforce is that everything has to be heavily engineered and the renderings very clear, which is why I trained in 3D modeling and CNC operations. You can achieve the highest levels of quality in China so long as you are very clear and precise with your workers on what you are trying to achieve.  It is very helpful that with the Balance Catamaran we are working again with Roger Hill, as his engineering is careful and we have a good working relationship based on our experience together.

GD: Why Balance Catamarans Phil?  Do you have a problem with what you call Comfort production cats?      

PB:  No, not at all. In fact if I had to take a charter holiday with a big family in the BVI I’d get the biggest cat I could find for the least amount of money – and that, in fact, is what drives the charter market and drives the major production builders - as well it should. The “big box” end of the market will always represent 85% of the catamarans built. And I can assure you, at The Multihull Company, the sale of such cats will always remain a huge part of our daily business in brokerage. For folks who plan to sail around the Caribbean, or the Bahamas, and do very little passage making these boats are just fine and represent good value for a wide range of buyers. I know as a yacht broker that the Balance line we are building is for a very limited few. This project is more or less a labor of love for me, because I am just building the sort of boat I would want for myself, and working with the team I have put together whom I feel confident will build that boat.

GD: I hear a lot of people say, who needs performance?  I am retired, what difference does it make if I average 6 knots or 9 knots?

PB: It really starts to mean something for the more limited market of buyers who are real adventurers, or consistent passage makers. Performance means the ability to sail well on all points of sail, the ability to sail away from bad weather and the reduction of exposure to it. A 15% to 25% percent jump in performance underway is huge if you are passage making. At the boat show docks people are focused on space and the Corian counter tops, this I know all too well, but eventually everyone learns these cats are meant to move through the water – under sail and power, and how swiftly they do it, and how comfortably, is vitally important if they intend to really go places. If the intention is to mostly park the boat it makes total sense to focus on the cheapest and most spacious options you can find. While it may be slow and uncomfortable underway, or less stout for the serious seas one might encounter when venturing far afield, it isn’t underway very often so that’s an acceptable trade off.  

That said, and this is how I came upon our brand name, a Balance ought to be struck between comfort at anchor and safety and performance underway for those who really want to sail. I just truly feel the Balance has largely been lost by the major production builders because they must sell over 50% of their production directly into charter programs. They start with charter needs at the top when designing their boats. A very telling fact is that in the mid-90’s a 47 foot cat carried 27 hp motors, in the mid-2000’s 40 hp motors, and now they are often carrying 75 hp motors. If it takes a 75 hp motor to push a 45 foot cat you know you have a heavy, high windage yacht with very wide hulls to push through the water. And to be bluntly honest I think the current crop of cats with massive flat windows or forward porches are potentially dangerous in large seas. I know of a few cats with large forward facing vertical windows that have been hit with big breakers and broke.

RH: I would add that in my experience there is a limited class of people who just frankly love to sail, care how their boat sails, and get enormous satisfaction and pride from really sailing. So many of the cats today I see are really hybrid trawlers or motor sailors. As Phil says, when you see builders offering 75 HP Turbo engines on 44 foot cats you know you’ve got a motor sailor. Nothing wrong with that, by the way, I’ve designed and built a range of powercats and motorsailors, but such boats are not satisfying to passionate sailors. And if you care at all about the planet, these are not Green boats!   As one of Phil’s brokers, Derek Escher once noted, the greenest boat is a sailboat – a real sailboat. Turning on the engines is a last resort. So the Balance is a bit more of purist’s boat, although we feel we have kept enough comfort in her to satisfy most cruising couples.

GD: Phil, you were heavily involved with the Dolphin brand and globally distributed that brand for many years. What happened to Dolphin?  And why now Balance?   The boats seem to have many similarities.

PB: We had a very ideal and special situation with Dolphin that began in 2003, when I partnered with Philipe Pouvreau and the Pimenta family. The boat came along at the right time, we had the perfect team to build them, and the Brazilian currency and labor market at the time were favorable to build such a high labor hour boat.  We had an excellent run, selling about 24 of them from 2003 to 2007, but each and every year of our production the dollar slid to the Brazilian Reles. Our costs just kept getting higher and higher and we had to raise the price of the boat massively in a short period of time. When the global financial crisis came Dolphin was hit by the perfect storm – a declining buyer pool and a far more costly product. In so many respects, the Balance project is meant to replace the fantastic experience we had building the Dolphin brand – limited production, high labor hour boats, with good performance for a small but passionate buying pool.

GD: How do Dolphins and these smaller, boutique brands fare on the resale market?

PB: Interestingly, the Dolphin has held up better on resale than just about any other cat that was sold new during her build tenure. Dolphin’s and Catana’s have held up nicely in resale value and I believe this is so simply because when it is time for a seller to sell they are not competing with the resale of so many phased out charter boats, or an oversupply of the same model created by the larger production builders. I feel confident it will be so as well for our Balance cats. Anytime you produce a quality product with a limited supply your resale prospects will remain strong. I have seen this occur with the Antares, the former PDQ, with the Dolphin, and with the older Catana’s and Gunboats.

GD: Roger, why the daggerboards with the small mini keels?

RH: The mini keels are quite shallow and meant to protect the sail-drive legs and rudders if the boat were to strike a log or something underway. Also, the mini keels protect the hulls if the boat is grounded in shallow water. We also designed the mini-keels so that the boat can rest nicely bows down on a beach. The dual daggerboards, of course, are to make certain the Balance points at a high angle into the wind with minimal side-slipping and infinitely less drag while sailing off the wind. Phil and I think this is the right compromise for the voyaging sailor. It strikes a Balance between protection, utility, safety and performance. Again, Phil and I did not set about to create a racing cat here but a cat that is safe, comfortable, and yet turns a very nice speed on all points of sail.

GD: Lee, how many labor hours will go into a Balance Cat?

LX: The number will vary a good deal because our boats are more customized than others and our buyers pretty sophisticated, demanding a range of different fit-outs. But if you remove the time associated with installation of special gear, or cabin and salon modifications, each 421 will take about 17,000 labor hours to build, the 450 another 2,000.  All of our drawers and cabinets are built with our own CNC router, and cored foam sandwhich, so the level of cabinetry we offer is considerably more costly and finished than what I have seen from the production builders in France and South Africa.  I do not think they can build cabinets to the standard we do with their labor rates. Also, we are installing pre-preg epoxy bulkheads, using vinylester resin, infusing a great deal, foam core floorboards, etc. We also take an enormous amount of time on our wiring and systems fit out.

GD: Phil, how many boats do you intend to build each year?

PB: We are organized at present to build no more than six Balance 421 and 450’s in our first year and we may just stick with that number. We could easily ramp up to do 10, but we’ll never build more than that on an annual basis. We would much rather have fewer satisfied customers than grow to a scale that becomes unwieldly. This way we can carefully manage each sale, each customer, ourselves, offering a far higher level of customer care and intimacy, just as we did with Dolphin.

GD: What are your plans for larger boats?

PB: We have entered into a partnership with a builder in South Africa to build a Sixty footer on a very limited custom basis, the Balance 601. We are in the design phase now for a 48 and 52 but have yet to settle on the details of where she will be built.    

GD: So when can we see one? 

PB: We have one 421 and one 450 under build now. The plan is to ship a 450 over to the U.S. for the Annapolis Boat Show in October 2013. But anyone is welcome to visit our factory in China to see the boats under build. We are very proud of the product and know our boats will stand up to the highest level of scrutiny. I think I’ve assembled an amazing team of experts for this project and am excited, to say the least.

GD: Thanks a lot Phil, Roger, and Lee. We look forward to seeing the Balance 450 at Annapolis in 2013.