[SMART YACHT] - WHAT IS OCEANCO EXPECTING FROM INNOVATIVE COMPANIES?

December 13, 5 pm CET

Catch & Do:

Open discussion with Paris Baloumis and Wim Verhoeff.

What is your daily life like working at Oceanco?

Paris: My name is Paris Baloumis, I’m based in Monaco where I represent Oceanco, and I take care of the brand. My daily life revolves around positioning the brand into the market.

Wim: I’m Wim Verhoeff, I’m based on the Dutch side of Oceanco. I joined the company six years ago on the Innovation side. I was part of the project development team and then part of the knowledge and Innovation team where my foremost focus was sustainability. Right now, I’m project manager fleet support which means that I’m responsible for our beautiful projects whenever they are delivered just to make sure that the clients are happy and that we run the yachts without any problems. It’s a very nice way to actually get feedback from the fleet which we can immediately implement to start innovating on the new projects.

What makes Oceanco unique?

Paris: I would like to start by saying that we operate in quite a small niche, so we attract clients and we build projects which are large, innovative, and custom, so we don’t build any series. From the picture [of the Black Pearl] you can also see that we build large sailing yachts. In fact, any project which is complex and innovative is something that we feel comfortable in building. We have a fleet of approximately 34 yachts in operation, and we have another five being built at the moment. All five that are being built are above 100 meters, so this gives a feeling of the magnitude. In general, anything above 80 meters is where our sweet spot lies.

Wim: Yes, and to complete, our quality is incredible, it’s very innovative but it doesn’t really make us unique. If we look at what makes Oceanco unique within the industry, it’s the fact that we are working in co-creation. So the fact that we have such a custom yard is really because we listen to our clients and we challenge them as well and that’s how up to this moment we’re building a portfolio of very unique, customized yachts. This process is also the reason why clients come to find us and why the products that we deliver are so unique. For instance, this one – the Black Pearl – it’s not only one of the world’s largest sailing yacht but it also regenerates electricity during sailing, so it can do an Atlantic crossing without burning any fuel.

Was it a request from the yacht owner to have this kind of functionality or is this something that you have pushed yourself as Oceanco?

Paris: It was actually started with one sentence and one aim of the owner. He said: “I would like to cross the Atlantic with zero fossil fuel.” And that was the big vision. Then of course we sit together with the owner and with our experts to make that into a reality.

The yachting industry is a niche market, but it's a big market, and we are expecting a growth about 30 billion in the years to come up to 2030. We've seen a growth of this market, Paris can you comment a bit on that?

Paris:Yachting is indeed a niche market, but within this market we operate in a special niche. The yachting market has been growing, it has been very buoyant for the brokerage market, for the new build market. More clients are financially capable of buying a yacht. Our restriction of course is we have our limited capacity, and we deliver one yacht a year so even with the growing market our numbers remain the same.

You have a capacity to innovate and to adopt technologies, is there an appetite for innovation?

Wim: I would say it’s the most important ingredient if you look at yacht building. Not only innovations like with the Black Pearl where it’s quite reactive: we respond to somebody’s vision; but also we want to be able to push new technologies to the market, to attract new clients. If you’re building your dream it often goes along with a lot of emotion, but also with a passion for technology and hence the innovation is necessary. Furthermore we see changing regulations where we have to keep evolving and as Oceanco we want to be a front-runner on all those aspects. So yes, definitely a place for innovation, and we support it as a company.

With M3 we are working on innovation all along the yacht’s life cycle, from the R&D, construction, to the retrofit. It could be interesting to speak about how you build your ships.

Wim: In general, if you look at a standard consumer product, there’s often an end of life so your cycle comes to an end. If you look at Superyachts, there is not really an end of life yet. All the yachts are made in such a brilliant quality that they remain sailing up until the moment where they are no longer state of the art technology and then rather than getting rid of them or disassembling them, we’d rather do a refit or a rebuild of that project. Furthermore, the elements mentioned here, in R&D, engineering, construction and use, we all recognize these as topics on our research and development agenda. And as a company we also focus on lifestyle innovations.

Paris: We need to make sure that the owners of yacht experience the same quality of life that they have in other places, maybe at their houses, maybe at hotels, or the way they travel meaning when we see that wellness is becoming an important aspect of the life and health, that should be integrated in yachting as well. We were one of the first companies for example who created a yacht named ALFA NERO where we brought the whole lifestyle closer to the sea level. Guests wanted to be closer to the sea, closer to the water. We made an infinity pool, which also transformed into a helipad. It’s all these kinds of elements that of course are technological innovations but also include a lot of Lifestyle transformation.

Right. The yacht shouldn’t be only considered only as a mobility aspect but also as a living place.

Wim: It results in interesting conversation in the beginning of a new project, because there are owners who are more interested into the lifestyle and how they will enjoy the living, and we have owners who are interested in our energy transition roadmap. We tell them about our goal to get rid of fossil fuels to an alternative and more sustainable fuel.

Could you explain how is built a yacht? What are the different steps and processes? and who is involved and at what stage?

Wim: As you can imagine it is quite hard to completely summarize the yacht building process. Every process will be slightly different because we customize even the process for our clients. In general, we start with a conceptual design phase. This is where an owner approaches us for example with an exterior design or an interior design. They come to us and say “we want to realize our dream”. So together with them, we fine-tune the concept, and our project development team is involved, our research and development team is involved, and sometimes even our internal design team is involved to create all the details.
If the concept is there you go to the next stage: design development or pre-engineering. From that moment we will draw all the specifics. What will the superstructure look like? With the propulsion system inside, the electrical systems… all the details. And this is where at Oceanco, we already involve a lot of our contractors. We do believe that the expertise is not all in-house, it is actually also in various contractors outside. During the design development, we already involve a lot of parties to become part of the process of creating something. In this phase we actually work towards a contract with the owner. That’s what we call building specification – and obviously making a contract price – then as soon as the contract is signed, we go on to the project team.
We have a dedicated project team of about 40 people who focus even on more details. So from pre-engineering, we go into detailed engineering where they define everything, they transfer then again to a production team. The hull we build in-house but a lot of production is outsourced through those various suppliers we spoke to in the beginning, but they all come to our premises. We as Oceanco really integrate the building process: all the parties come to our facilities. We have wonderful state-of-the-art facilities where they finish all the details up until the end, where we do the commissioning and the sea trials. All the systems are tested, the yacht crew is then in place as well. Then, we have the delivery – and even after delivery we try to remain involved just to make sure that everything goes well.

How long does it take on average from the dream that has been designed or asked by the owner, to the delivery of the yacht?

Wim: This is still a time frame of about five years.

To what extent is sustainability being driven by Oceanco in conversation with the owners? and what's the appetite or response on the owner’s side?

Paris: In general there is a traction. Every single owner wants to do the right thing when it comes to sustainability. At the moment, the only question we see is how far do certain clients want to push the innovation agenda, and there we see variations. Some clients like to use and to go into proven technologies, we have clients who really want to push the entire industry forward and to try out non-yet tested or not available technologies. In any case every single owner is now talking about sustainability, and their children are talking about sustainability.

So testing a solution that doesn't not exist or have not been applied yet could be also a requests from the owners?

Paris: Absolutely I think we even have some examples.

Wim: I am not sure if we can share all these examples but indeed we have owners who come to us with specific solution which they have developed in their successful company and they ask us “can we do something with this technology combined with yachting?”. There are very interesting projects. On the other end, like Paris said sometimes they want to go safe: what do you provide as a company? what can you show us as proven technology? And on the other hand, we as a company are challenged very much in innovation.

The example of the Black Pearl that you've shown, it seems to be very attractive to reduce fuel consumption. Is it something that you're applying in other projects? Do you have the freedom to do that?

Paris: Black Pearl is a very nice example about technology which was not there yet. The owner had the vision. In general, using solar panel on a yacht is very difficult because we don’t have enough square meters to generate enough and store enough energy. So, what this owner wanted was to use the sails as the solar panel system. Of course, that was very difficult because solar panels didn’t exist in that flexibility yet. We started building because we knew at some point we would have solar panels that could be flexible enough. We started building with that technology in mind. And yes, we can now duplicate this technology. Some IP rights remain with Oceanco, but an owner who’s really interested in sustainability would like to share his innovation. This specific owner had in mind to have a ripple effect. So everything that we did in yachting that could be used eventually in commercial. One advantage we have in yachting over the commercial industry is that we’re not always pressured by the end figure. Sometimes owners want to leave a legacy behind and that’s when we have the possibility to do something which is not existent and maybe can then be adopted by the commercial sector.

Wim: It is exactly like Formula One.

When it's dealing with new technology do you consider that the owner are cost sensitive or not?

Wim: I would say that really depends. Yachting is sometimes seen as a golden industry where we can spend everything we want and I want to completely throw that overboard. I mean obviously we are always cost efficient but in the end like Paris said before if it is somebody’s dream, if they want to leave a legacy, yes costs will be set apart as a side point. So the main priority in this case would be leaving at Legacy and creating something which is unique and perfect for them. For us as a company we still are always responsible in creating that innovation and making sure that the funds go to the right innovation track.

What are the propulsion trends around sustainability?

Wim: The biggest trend is losing fossil fuel. We have an energy transition roadmap: how do we get rid from fossil fuel? The stage where we are right now is electrification. That’s a step in between. The propulsion is still Diesel propelled. We have a diesel engine which is a generator, generating electricity, electricity goes to a battery bank and then the propulsion form is electric. We do believe that in the future this will remain the case. So, where before every ship was propelled to diesel direct, we are now in a stage where we will remain electric architecture. Right now that electricity is still coming from a diesel generator and we do believe that in the future this will change. So for example methanol or hydrogen that will be the new carriers of energy, transforming it to electricity on board and using the electricity to propel the boat. This is also interesting: as Paris mentioned before the Black Pearl was made in such a way where it was prepared for the future, and this is also what we believe right now if we look at the yacht propulsion systems in general. Right now, we want to make a yacht in such a way where we put in diesel right now because it’s available all over the world. But let’s say we skip five to ten years, there will be a new fuel available, and that yacht which is being built now should already be prepared for the fuel of the future.

So you're also interested to detect the fuel of the future and innovative solutions in a very broad way?

Wim: Exactly. We need to be future proof. I mean the build is already taking five years we want these yachts to last forever. Whatever we design and build at the moment should be ready for the future.

What does a company offering innovative solution need to know before targeting the yachting industry?

Paris: To start off, I think that the most important is seeing how we build, which is very much in a collaborative manner. I think any company who would like to join our industry should have this collaborative spirit and be open to discussions to see how they can provide value and solutions to a problem. We are really aware that the yachting is quite different to the commercial industry. Commercial industry is really pushed by the bottom line or by profit. We first would like to see what all the options are and maybe push beyond what is feasible without taking the profit into account.

Wim: And there is a huge difference between yachts being on the ocean and products developed for shoreside. So what we see with new players now and then is that, they produce something which is wonderful technology, and then we place it on a yacht and it simply doesn’t last. You have salt water, a lot of wind, you have rough sea circumstances. Products should be designed and produced in such a way that is durable enough with the right materials and quality to survive at sea. Furthermore what’s very important to enter the yachting industry: we cannot afford to negatively affect the experience of the owners. We want to make sure that whatever is placed on there, there’s always some sort of reassurance that the product will work or at least that if it doesn’t work the owner’s experience doesn’t reduce in such a way that the full yacht is a bad product.

Does the owner like to showcase their new technology? Do they make visits to guests? Do they promote it?

Paris: Yes, we have both scenarios. Owners who are very involved in the whole process and then owners who are not really. We also have owners who are so involved in the technical aspects and in the Innovation aspects and indeed they are very proud of what they have achieved with us. Then, when guests arrive aboard, we know from our experience that the owner even takes them to the engine room. That really reflects the owner. They really bring their guests to the heart of the yacht, or what was important for them during the build. On the other hand we have to be also honest that especially in our niche clients are evermore private. What they’re building is for themselves and for their families. People that come on board are quite limited so even us, to be able to showcase a yacht is becoming more difficult. Of course you know if there’s an interesting client we can arrange something but it’s not like before where we could just showcase a yacht from inside out.

Do you believe artisans are underrepresented as a voice around the table in developing sustainable practice in the super yacht industry?

Wim: We do believe that we should give knowledgeable people a platform. With Oceanco we do this through co-makership. We build the yachts with a large sum of suppliers – we don’t even call them a supplier; we call them a co-maker. We co-create together with them. We also like to work with people who work outside of the industry with another knowledge. One of the projects which Paris and his team started has a main goal to invite Artisans, artists, designers from other industries to take a step into the yachting industry and see how their outside knowledge will influence the design of a yacht.

Where is innovation needed? is it more technology for the builder, for the operators? Is it more for the users?

Wim: Innovation is needed in every aspect. For instance, users this is where we see if they want to push something to be a legacy, sometimes their motivation is sustainability, sometimes their motivation is user experience. In any case, innovation is needed to keep attracting clients to be building unique products. It’s also the task of the builders and the designers to keep challenging them and surprising them in order to keep attracting them. At the same time on the builder/operator Innovation is an interesting one. If we’re looking at sustainability as a builder, we are responsible for let’s say 10% of the carbon footprint, and during operation we see the other 90%. So, the builder’s responsibility to create something where we both reduce the footprint we currently have but also allow the yard during operation to be as sustainable as possible is something where a lot of innovation is necessary as well. It’s hard to say where Innovation is needed, I think in every aspect.

Paris: Definitely and I think for the companies listening who are interested to join this space, the yachting industry, it’s very important when providing innovative solutions to have a good understanding of the regulations that we are also working with. That’s a big advantage.

Does Oceanco have plans to help captains and crew with regards to integrating software assistance into their yachts to assist with activities like yacht management, charter management and the day-to-day operation of the vessel?

Wim: It is definitely becoming more and more interesting. Right now, during the build we already install a couple of software but it’s something where after delivery, we take our hands off it. That software indeed helps the engineers with their maintenance, it help the captains with their logbook. But it is something we are not still in touch with and I do believe that in the future in order for us to keep providing maintenance we want to be linked to the yacht’s operations to keep advising them. This is something which right now is not being heavily done, our involvement in operational software but it’s something I do see in the future.

What is the level of maturity for innovations? are you looking for a solution that is already available in the marketplace, or would you be interested in considering solutions that are still in development stage?

Wim: Depending on the technology and the interests of the client, because in the end often developing an innovation is something a client is going to be involved with, it can be in every stage. Even an innovation which is just an idea, if an owner is convinced and wants to develop it, a superyacht project might be the perfect platform to develop that innovation.

What about wellness innovation? Is it something that you are looking for and if it's the case, could give some examples?

Paris: We see innovation in a very broad spectrum, technological but also lifestyle and wellness is something which is becoming bigger and bigger. So, yes in that field we’re definitely teaming up with partners which are not only in our industry. We would like to see what innovations, what trends are happening in other industries.

What’s the future of sail in the large private yachts? Is it a trend that will grow?

Paris: The numbers are so small that it’s very difficult to really identify a trend. Motor yachts occupy a bigger part of the pie but seeing that sustainability is becoming ever more important if you really want to go green, of course the sailing yacht is a perfect option. The only thing is that the amount of interior volume that you get on a sailing yacht is much smaller than you can achieve on a motor yacht and that’s again where it comes to personal preferences between yacht owners.

On existing yachts, what are the biggest drivers to upgrade or retrofit sustainable solution? Is it mainly coming from regulation?

Wim: Not necessarily. A refit could cost X amount of money but then the savings in the end for an owner could be a lot more. So already by getting more energy efficient generators on board you can save a lot of money. It’s not per se driven by the fact that they need to because of regulations, it’s also because they want to either intrinsic motivation to update the yacht but also it’s going to be cost efficient in the future for them.

Do the procurement teams have sustainable solutions prioritized over more cost effective supply chain options? How do you make the balance between sustainable solution and cost efficient solution?

Wim: For us each project has their own procurement team, so we have dedicated buyers and those buyers talk with their suppliers, but they also talk with each other. We make sure that we put one standard if we request a product. In those standard requests that we do, obviously cost and quality play an important role, but as of the last five years also sustainability is a part of our request to suppliers. So it’s not prioritizing sustainability over quality but it is an important criterium for our procurement teams to evaluate whether we want to work with a certain supplier and whether we want to work with a certain product they deliver.

How is Oceanco planning to work with sustainable solutions for 2023 and the coming years?

Wim: It might be nice to add something here because sustainability is a very broad term and right now what we’ve discussed is mostly the energy transition. At Oceanco we have really talked about sustainability, separated in various themes of which we believe that each one of them deserves attention. Internally we call them the five Ps.

For us sustainability is about People: the people we work with at our facilities but also the people who work on the yachts.
It’s about Population so the people living in the surroundings of our facilities but also the areas in the oceans where the yacht sails.
The Premises, so how can we make our facilities more sustainable?
The Process which we touched upon but there’s a lot of different production technologies which can be improved,
And obviously the Product.

So that’s five Ps, which is the broad scope of sustainability for which we indeed have various goals for the coming years and also very high ambition on what we want to achieve there.

Paris: What we’re doing as a company is we have a big investment in our R&D teams and innovation teams because for us, it’s not only staying up to date. We really want to lead in this aspect in our industry.

Does Oceanco maintain a sustainable ethos through the company, from top level through procurement?

Wim: Exactly, yes it’s definitely supported by top level, that’s where we express the ambition but at the same time we want to be a space where also bottom-up projects, smaller projects coming from either startups, coming from employees internally also have a place.

Are you interested in new materials?

Paris: One of the biggest materials we’re looking at the moment is teak.

Wim: Teak is one of the materials which is almost bounded to yachting. Every yacht you see has teak on it. As of the last years we simply know that teak is a no-go. It’s a material which is not sustainable, the forests are getting empty, so already there we have the laboratory tests running for an alternative but this is I think just a start. It’s not just the fossil fuels which are endless it’s also other materials in the world which we use a lot in production, like teak which will need a sustainable replacement. So, there is an interest for materials both looking at technological building materials alternatives for composites for example, but also for luxury interior materials such as teak and luxury finishes.

On the yachts, not only in the interior but the exterior as well, are you interested in coating solutions? And do you have some specific need on this topic?

Wim: Coatings is also a very rough topic obviously. I think it’s going to be more and more interesting, for example we see right now nano coatings on the glass, to make sure that the water washes off easier, so we save water with it, but also coatings on the hull can make a lot of difference for example to prevent biofouling or even to reduce the resistance of the yacht so yes it’s an interesting topic. Coating is not a big change in the production process, it’s a simple add-on, and if it works it’s an easy step to integrate. Biofouling is a problem which we see on the hull surface or even further in the systems. It used to be prevented with toxic paints, right now we remove the toxic painting but it’s not as effective so we’re looking for a green a sustainable solution to get rid of fouling.

When we spoke about the different energy solutions you mentioned methanol, hydrogen, would you also consider a mix of renewable energies?

Wim: I think the solution will be in a mixed providence of energy. Like we mentioned before, electricity is going to be the basic architecture on the boat, but providing electricity it can come from wind energy, it can come from solar energy, from hydrogen in the fuel cell. The yacht of the future will probably have multiple ways to generate electricity to make sure that we propel in a sustainable way.

Paris: At the moment Oceanco is not betting on one future solution. So we are building now to be adaptable, to integrate a variety of options. The only decisions that a client would need to make now is if you want to go towards hydrogen because that’s a solution which we cannot adapt throughout the process but it’s something that we need to start building in a particular way from the beginning. That’s the only way.

And about energy optimization inside the yacht? Is it something that you are considering already?

Wim: There are smart energy management systems on the boat so we see where most energy is used which at the moment is the HVAC installation but at the same time we can make it even smarter in such a way where we know exactly how much energy is used at what time on the boat and how we can optimize it. And then the important challenges: how can we optimize it without reducing the owner’s experience?

Finally, what about AI? is it something that you're working on?

Wim: AI is a very hot topic at the moment. I think already in our first single tier hybrid motor yacht there is small portion of artificial intelligence used to optimize the yacht’s resistance when we are sailing. This is just very small in the beginning and we’ve seen over the last year what artificial intelligence has done and it’s going to play a large role in yachting as well.

About Oceanco

Oceanco is one of the leading Superyacht Shipyard. They are based in the Netherlands-, but also have an office in Monaco. As a custom yacht builder, they are fully dedicated to innovation. With their customers and co-makers, they create yachts in the 80 metre range since 1987. “As an industry pioneer Oceanco’s ambition is to create and support the most advanced and inspiring motoryachts and sailing yachts in the world.”

Learn more →

Wim VERHOEFF

Project Manager Fleet Support

Paris BALOUMIS

Group Marketing Director

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