Mike Carr & Henk Wiekens | Joint MDs, Pendennis
With a host of world-class superyachts to their name, the joint mds of pendennis talk innovation, quality and investing in the skills needed to match their customers’ expectations
Interviewed by Charlotte Bailey
When the founders of Pendennis, Mike Carr and Henk Wiekens, took over the yard 20 years ago, five years after its conception by Peter de Savary, they could not have envisaged how much the superyacht industry would change as the yard grew. “When we started, we were one of the biggest organisations with 70 to 80 people working here, and we could handle quite a large part of the fleet that was around then,” remembers Wiekens, sitting at a table made from the wood of one of Pendennis’s earliest builds, Adela. “Now the sizes have changed so much it is just unbelievable. We had no idea it would grow so rapidly.” However, walking around the Falmouth yard on a bleak morning in late December and seeing the constant work happening in the huge dry docks (soon to be expanded even further), it is clear that the yard has grown with the yachts that continue to return to it for refit and shows no sign of slowing down. In the largest facility, m5 (ex Mirabella V), the biggest sailing sloop currently in existence, has just had its 3m (10ft) stern extension fitted, part of a remodelling project.
Expansion plans will see a 9m (30ft) increase in height of the existing dry dock, the build of three new seaward-facing halls, a support complex with workshops, office and crew quarters, plus two wet docks and a wet basin to hold back the tide on the north-facing area of the yard. “This development is very exciting as facilities are so important. You’re always a little bit behind what you really want, because our ideas are far more ahead than our reality check,” says Wiekens.
The development is not only for refits: it will give the yard greater scope to take on larger new build projects, such as 2011’s Hemisphere, the world’s largest sailing catamaran, which garnered awards and won industry-wide admiration for its innovative design.
Pendennis opened a new refit yard in Palma in July 2011, not for works on a similar scale to the huge undertakings at the Cornish yard, but smaller jobs and annual surveys. More significantly, it enabled Pendennis to establish a presence in this important hub. “Palma was an important step for us because of the fleet of customers we have now,” says Wiekens. “We needed to make sure that we could give the right service in the right places, without clients having to come all the way to Cornwall. And Palma is a very logical and strategic place to service our clients: either boats pass through there on the way back from the Caribbean or on the way over, so we can easily help with any work they need.” The yard’s presence there, he adds, is vital in giving a client peace of mind about a job. “If a boat has been worked on for six months here, then some changes or finishing touches are needed in Palma, it is much easier if the same people can be used.” Palma, says Carr, is also a useful point for starting client relationships with a small job that may lead to a sale at a later date.
This all-round knowledge has always been a strength Pendennis’ managers have focused on, whether for refits or new build. One of the yard’s key strategies has always been to offer a full service in one place. “We are one of the few organisations in the world where we can do a lot of design work with the client then also do everything else completely in-house if needs be. That gives us an all-round product. You’re not over a barrel with outside subcontractors,” explains Wiekens.
There is a further reason for offering this one-stop service: it is not only beneficial to the customer, but for the yard too. Instead of subcontractors being able to use an experience working on a project as a learning tool, it is the Pendennis workers that benefit from the knowledge gained each time, so their expertise is constantly increasing. “As we do these jobs the knowledge and experience stays in the company. So it’s a very wide circle of activity. We are lucky here with our workforce, it’s quite young and dynamic.”
Indeed, constant improvement is one of the key tenets of the way Pendennis runs its business. The apprenticeship scheme, established in 1998, is one of the most successful in the country. “We could see that the one barrier to growth was having skilled people, so we set it up with the help of Jill Carr, an experienced teacher.” says Carr. The scheme offers work across different departments and then a specialism. So far it’s produced 150 workers, and around 100 of them are still in the workforce. “The growth of the company from 200 to more than 300 over the last 15 years is filled with apprentices,” says Carr. “Not only are they doing the hands-on skills, they’re now vertically integrated into the organisation. The joinery manager was one of the first apprentices, one of our naval architects was part of the scheme plus two leading designers in the electrical area, as well as Tim Tregear, who is currently running Palma. The organisation of the apprentices is well scattered and if you look at the age profile it’s quite young, in the early 30s, which is pretty unique in a shipyard environment.”
The apprentices and the employees can expect to learn the basic principles of how the company is run: every person working here is a salesman for the company, so employees must maintain constant professionalism. “You can’t have an off day, you’re always on show,” says Carr. In addition to teamwork, he says, they learn “a sense of business awareness, a value in terms of what things cost, and a need to get things done, in time, to a budget.”
As well as investing in apprentices, Carr and Wiekens believe in training at all levels throughout the company, including middle and senior management. And since the yard is one of the only superyacht builders in the UK, so as not to be at a disadvantage to its competitors in the Med when it comes to staying informed about superyacht issues, monthly talks are given by outside experts. Recent speakers have included Tim Wiltshire of Burgess on the state of the market from a brokerage perspective, Yachting World editor David Glenn on the perception of Pendennis by the sector’s media, and an expert on warranty about ways to keep costs down in that area.
So what does a potential client need to know about the way Pendennis is run by its joint CEOs? “We’re quite open, and the yard still has the feel of a smaller, family-style company,” says Carr. “Everybody is out and about. It’s an engineering, technically led company – we’re not led by accountants.” When management needs to send an employee to assess a job, in the first instance they will send a technician, not a money-man, and Carr underlines this as key to the successful building, or maintenance, of client relationships. “I think that’s the trick with the refit market in particular: straight away sending technicians, not someone to just represent the company,” he explains. “So they can immediately start talking to the engineer on board about what the options on the new generator are, rather than say, ‘Well, we’ve got someone back in the yard who can do that,’ as other yards might.”
And it is the refit market that Pendennis is focusing on, at least for now. In the current climate, in which the market dictates that refits come more often than build orders, it is other refit yards that Carr sees as the main competition for Pendennis. “[Other builders] were happy building new boats until about five years ago, then the market dried up so they’re all looking to see where they can gain,” he says. “It’s healthy to have competition but I suspect that when the new-build market picks up again they might all re-focus on that.” He lists significant competitors as Astilleros de Mallorca, the refit yards in Genoa, and MB92 – “although they’re really aiming at the Abramovich fleet and we’re pitched in the middle, which is nice.” Traditionally Pendennis undertakes 30 to 65 metre projects (98ft-213ft), but now the Pendennis Plus arm of the brand aims to focus on yachts over 60m (197ft). Stateside, Rybovich is also a competitor, although with a higher cost basis, says Carr. In India, Brazil and China, he says, there is a greater opportunity for new boats currently, but refit yards will eventually emerge that need to be monitored.
Aside from keeping one eye on the competition (“we have our own intelligence: what boats are going to be coming up for refit for different reasons, be it sale, brokerage or class requirements,” says Carr), openness with clients and strategic marketing is key to the yard’s success going forward. “Your products are your best advert and you win clients in the main by references,” he says. “You can do all the advertising you like and create a presence, and we do, but your best sales tools are your current clients, so you have to be focused on giving them value for money in an honest environment. I think the business will come if you can produce the quality for the right price. Once the ball’s rolling that should be self-perpetuating. But you can’t afford to take your eye off: if something isn’t done right, that spreads faster than the things that are done right. The main thing is producing the quality; making customers feel proud to say to a mate sitting on the boat, ‘Well, these guys did my refit’, or, ‘These guys built my boat, why don’t you go down there?’ That’s the best reference we can have.”
Of course, client relationships are not without challenges, as every honest builder and broker will attest. The key to running them smoothly, says Wiekens, is to make each relationship into a learning experience. “The customer is so important in this business and you have to keep adapting to whatever they come up with,” he says. “There’s no way you can dictate what they’re going to do. When you start a new relationship with a client, you learn a little bit more, and every time you think, I wasn’t expecting that! The more you know, the more you realise you actually know very little,” he jokes.
Once the process is moving, the key is to make the experience enjoyable for the client. “We’re in the business of making things that nobody needs but people seriously want, and only want if it is a lot of fun [to make],” says Wiekens. “It reflects on us personally if a project is a success or not. Your reputation is only as good as that last one, especially in this business.” Carr agrees, “Even with the people you’re struggling to please you have to deal with them in the same way as the people who are pleased. You have to try and turn the situation around. We have the core values of being honest and providing the best service and we make the customers feel special, because they are. They are sponsoring our business.” Enjoyment of a project extends, too, to the employees. When asked about what qualities a potential employee or apprentice needs, both CEOs cite the same one: enjoyment of each day’s work. This, they say, leads to the successful work ethic that produces the high-quality workmanship for which the yard is known.
Expanding into the next era
As for the future, Carr says the expansion means keeping a stronger focus than ever on running the current projects without distraction. “Our main challenge for the next five years will be selling boats and making sure we continue to make a competitive offering while keeping the quality right,” he says. “We’re about to embark on a major investment programme in the shipyard to bring the facilities up to speed and getting through that is a major challenge. We live in a very optimistic environment: everybody in this business would like to say everything’s fine, but no one really knows what could happen next year. So it’s important to keep making sure that our cost basis can remain stable in the world economy.”
Expansions of this magnitude are never taken on board lightly in financial terms, but Pendennis has planned pragmatically so that the business is protected. “We’ve been careful to ensure that there are cut-off points along the way in case we need to stop,” says Carr. “It’s a big thing to do but it’s important because we need to upskill, to make our facilities better, to improve our efficiency, and we need to present a face. Everyone else is moving on and in the first instance you need to attract the client in by demonstrating that you are world class. It’s a very capital intensive business – if you look at what we potentially make out of a job and what we’re investing here, we have to make a significant profit for a few years if we want to pay for what we’re doing.”
For now, though, the MDs have faith in their workforce and in the yard’s future. The way business has gone so far seems to be working. On completion of a recent project, one client, a very successful businessman, was asked by the Pendennis heads whether he had any advice for the yard that might be beneficial to future projects. “He said, ‘Keep doing what you’re doing. Just keep producing quality in an honest environment,’” remembers Carr with a smile. “You couldn’t get better praise than that.”