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Bigger Boats
by Jean Gruss | Editor/Lee-Collier
If you've bought a new boat in recent years, there's a good chance a company in Cape Coral called Marine Concepts had a part in its design.
Marine Concepts helps more than 40 boat builders design everything from hulls to hatches and creates fiberglass molds that manufacturers use to produce new models. Marine Concepts employs about 125 people in Cape Coral, Pine Island and Sarasota and generated $9 million in revenues in 2005.
Like so many other industries, Marine Concepts is riding the population trends. As baby boomers start retiring, they're buying bigger boats and manufacturers are increasingly turning to companies such as Marine Concepts to help them with more complicated designs. Customers include Donzi Marine, Hinckley, Grady-White Boats and Chaparral Boats.
J. Robert Long, the company's president and owner, is a boating industry veteran. As president of Sarasota-based Wellcraft Marine for 18 years, he grew that company to $350 million in revenues and oversaw 2,000 employees. Boating Magazine named him Boating Man of the Decade in the 1980s.
Eager to own and build his own company, Long left Wellcraft in 1993 and bought Marine Concepts in early 1994. With its 14 employees and $800,000 in annual revenues, the company was comparatively small and unprofitable. But Long saw the potential to turn it around, and he and his wife Karen bought the business for an undisclosed sum.
His timing was good. Congress repealed the 10% luxury tax on expensive boats in 1993, and Long figured that all but the largest boat manufacturers would rather farm out the work than pay for a full-time staff of engineers and tradesmen to design new models.
Rough waters
Long mortgaged a Sarasota rental duplex he owned to buy Marine Concepts from then-owner Augusto "Kiko" Villalon, a Cuban immigrant who had built the business from scratch.
"I started on a shoe string," Long recalls. "At the end of the first month, we were running out of cash."
Worried that he wasn't going to make payroll that first month, Long called executives at Nashville-based Chaparral Boats to ask if they could prepay a job Marine Concepts was working on. In return, Long promised to make their job a priority. The boat builder agreed and a relieved Long made his first month's payroll.
Long concedes it was a scary time, especially considering he started the business when four of his six children were still in college. "I even had the hives a little bit," he says.
At the time he bought the company, Marine Concepts was bereft of technology. "We didn't even have a computer," he says. Instead, they borrowed a computer from an employee who was the company's truck driver. Even the company's accounting was done manually, using old-fashioned green-lined ledgers.
What Marine Concepts lacked in equipment it made up for in talent, however. To be successful, Long had to be certain that the designs and molds he produced had to be flawless. After all, a defective design or mold could wreak havoc on a boat maker's production line.
Long knew many talented workers from his long career in the boating industry. To hire some of the best craftsmen and be near customers such as Donzi, Long opened a 10,000-square-foot facility near Fruitville Road and Interstate 75 in Sarasota. "Some of them had worked for me before," he says. Long's sons John, 40, and Kevin, 30, also joined their father's company as engineers.
Long insisted on superior customer service. Communication was the key, so customers knew exactly how quickly their projects were moving. Small gestures went a long way to creating goodwill. For example, employees took pictures of each project once a week and mailed them to customers.
Satisfied boat builders became references. "They were our best salespeople," Long says. What's more, when they calculated the cost of running their own engineering department versus hiring Marine Concepts, they found that they were better off farming out a part or all of the design work.
Technology brings speed
With the talent in place, Long knew he had to boost investment in technology to handle the growing list of customers and become more efficient and profitable. Until he took over, the entire design and mold production was done by hand. Shipwright carpenters had to create a full-size wooden replica of each boat to create molds.
So in 1996, Marine Concepts bought a $30,000 machine called a three-axis router. It could be programmed to cut wood frames for molds with better accuracy and faster than by hand. "It was one step better on accuracy and time to market," Long explains. The mold-making process that took two to three weeks to complete now could be done in just one week. An undisclosed customer helped finance Long's first machine.
Subsequently, Long purchased more equipment, including another three-axis machine and three more sophisticated five-axis machines that cost $1 million apiece. To finance the expansion, Long says he turned to banks that include AmSouth, Riverside and SouthTrust, now a part of Wachovia.
The machines now run 24 hours a day, and Long says his company is working on about 20 boats at any given time. Engineers work with the latest computer-assisted design software from Unigraphics, building three-dimensional boats that seem to float in space on the computer screen.
The market is deep. There are about 200 mass-production boat builders in the United States and each one comes out with at least one or two new models every year, according to the National Marine Manufacturers Association.
Marine Concepts has done business with more than 85 boat companies in the last five years. It's now working on about 30 projects, including a 65-foot luxury ocean yacht.
Marine Concepts now has more than 60,000 square feet of manufacturing space about the size of a football field. The facilities are spread out over three locations, including a new 8,000-square-foot facility on Pine Island.
About 85% of Marine Concept's business comes from boat manufacturers. The remaining 15% comes from customers in other industries, such as aerospace. For example, Marine Concepts will design the fiberglass shell of an aircraft simulator. The company's most widely recognizable non-marine project was producing the 85 Twistee Treat ice cream cone-shaped buildings.
Busting at the seams
Although Long says he wants to diversify his business into areas such as aerospace, he doesn't want his boat-building customers to think he's devoting less time on their projects. "When you get into other industries there's always a learning curve," Long says. And the boat-building business is so strong now that there's no pressing need to go hunting for new customers in different industries.
For now, Long needs space to expand his business and serve existing customers, though he declines to talk about a timetable or revenue targets. He says he needs 10 to 15 acres for future expansion and could easily add another 25 people. He says: "We're busting at the seams."
J. Robert Long's take on the boating industry
The recreational boating industry has gone through booms and crashes, and J. Robert Long has been through both ends. As a past president of Sarasota-based Wellcraft Marine and the current president of Marine Concepts in Cape Coral, Long has more than 35 years of experience in the marine industry. The Review asked Long to share some of his perspective of recent events and what he sees as new trends. Here's an excerpt of the conversation:
What was the impact of the terrorist attack of Sept. 11 and what did the boating industry do to recover?
It had some impact for almost everybody throughout the world. I can't say it had a major impact, though. It slowed our growth, but it didn't set us backward. It didn't have near the impact that the luxury tax had in the early 1990s and the severe shortages of fuel in the 1970s. With 9/11, we staggered a little bit, but we didn't fall. Our business leveled off slightly and then started picking up again a year and a half to two years ago.
How have rising oil prices affected the industry?
I know some manufacturers were concerned. People still seem to be boating. They might boat a little less, but they don't stop boating. They might not go as far and as long, but they're still boating. From our aspect, they're continuing to move with new product.
Have hurricanes affected the recreational boating business?
I haven't seen much difference. I don't see any impact at all. There's talk of it, but that's happened and life goes on. We're going to enjoy life and do what we like to do. If we like to boat or fish, we're going to do it.
What other challenges does the industry face right now?
There's a lot of time and effort spent complying with [workplace and environmental] regulations. And then there are taxes and health insurance costs. Things like that are affecting us as much or more than oil prices. It's getting very expensive for us to carry health insurance. We adhere to all the [workplace and environmental] standards, but there are a lot of standards. It's volumes of stuff that we have to comply with. That sometimes seems excessive and some of our customers have complained that they lose business to overseas [manufacturers] on certain items because they don't have near the amount of regulations.
What are some of the hot new trends in recreational boating?
Things go in cycles. Smaller boats slowed down for a while. It got saturated. A lot of companies are moving to larger boats. By larger I mean 30 to 80 feet. There seems to be a good trend toward cruisers, larger fishing boats and large center-console and deck boats. People really seem to like flats boats too.
Are there new technologies?
There are new technologies in power. The new four-stroke engines are very popular now. They're more economical and quieter. Companies are coming out with new drives for engines too.
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