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SUPERYACHT #494
June 2003

Article selected from our quarterly magazine dedicated to the largest and most luxurious boats with information, interviews, technical articles, images and yachting news


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Paolo Vitelli, President of the Azimut/Benetti group, is interviewed by Lucio Petrone


THE AZIMUT/BENETTI GROUP CONTINUES TO GROW

The new Muratori-Perlini law on boating opens up good prospects also for the world of luxury yachts. Italy, finally, has realised that, with an industry that successfully produces and sells these large boats, it is convenient and cheaper to register them under the Italian flag without losing VAT and the fiscal income deriving from the management activities. Do you agree?

Certainly, its a milestone for the boating world, but in particular for the luxury yachts sector. And let me say so also as President of UCINA [National Union of Shipyards and Associated Industries] in consideration of the Association's hard work towards this goal. Now, for the first time, as well as being builders of these yachts we can also manage them. According to Art. 3 of the Muratori-Perlini law, users all over the world, and not only the Italian ones, may enrol sailing crafts [Editor's note: those over 24 metres long], sailing all over the world and used exclusively for hire for tourist purposes, in the International Register [Ed: established by Italy in 1998 by Law 30/1998].

What is the advantage for Italy?

That not only Italian boats on charter abroad will be enrolled, but also those outside the EU, especially from America and South America, that in EU waters do lengthy charters which are not really legitimate, particularly since they don't pay VAT. By being enrolled in the Italian International Register, they can sail with no problem in all EU waters without being obliged to pay VAT and moreover, they can benefit from other economic advantages provided by the new law. Evidently this is a tempting proposal for everyone and not least yacht-owners from other EU countries.

Does that mean we'll now be world leaders for luxury yachts in Europe?

That's right. For the first time, having achieved supremacy in construction, we will also achieve the much-coveted leadership in the registering and management of these boats. In the making is an Italian world of super-yachts, from which we have been excluded until now, involving designers, surveyors, classification and certification bodies, suppliers of safety equipment, maintenance people and, above all, skippers. Finally we can take advantage of the wealth that derives from luxury yachts.

Have you calculated how much VAT we've lost during these years because of the obtuseness of government?

Let's say, making a very rough calculation based on the value of the boats produced, we could have had an income from VAT of 200 million Euros a year which instead went abroad. We won't get the lost VAT back but we'll have a significant indirect return.

So let's get this right, last year, we think, about 170 luxury yachts were built in Italy. Were they all registered abroad?

Only one or two were registered in Italy. Perhaps a few more during the last 12 months, owing to the leasing law by which these yachts can be registered with a reduced percentage VAT. But the law on leasing is something entirely different from the new law... In fact it concerns mainly private owners who want to use the boat for their own use. By leasing you can register it in the Italian register and pay less VAT. Instead, the new law concerns commercial yachts for charter, with precise obligations to comply with sharp technical regulations and they can be registered in the International Register and be completely exempt from VAT. Private owners who don't want to work uses leasing and pays less tax; the private owner who on the other hand wants to work has zero-rating and has to abide by stricter standards. I'd say that the panorama is looking perfect.

So now we can give that assurance, that image of reliability that was first questioned and later acquired thanks to the Azimut Group and other reliable builders ...

That's exactly right. Italian yachts have been admired for a long time for their beautiful lines but not respected for technology or support services. During the last 6-7 years the Italian industry has come to understand the problem and has filled this gap, offering technology, reliability and service on a par with overseas, and in some cases better, as the success achieved by the industry demonstrates. The third phase is the one that we have just achieved with this law in the sense that now also the Government sees that it must contribute to its industry's international reputation, by offering yacht-owners the possibility to register in Italy.

Are we able to offer, in this sector, reliability and facilities as good as those of our competitors?

This phase must still be guaranteed by the Government, because the law sets out the fiscal and bureaucratic principals, but it delegates to the Government the role of drawing up the technical regulations which will be ready within six months of the law coming into force, and to which the yachts must adhere.

Now let's change hats. As president of the Azimut Group, tell us about short-term programmes for big yachts.

The Group has a lot of interest in big boats, considering that more than 55% of its turnover comes from boats which are over 24 metres. We produce fast boats with a maximum limit of 36 metres under the Azimut name; on the other hand semi-displacing or displacing boats with a traditional look over 30 metres come under the name of Benetti. Under the Azimut name, over 24 metres we have the 74', one 80', one 85', the 98' Leonardo and the 100' Jumbo.

How has the 98 Leonardo been going? I really loved that boat...

It's a great hit, the biggest draw of our range and we have an extraordinary number of orders. It's because it represents an invention: the concept of the sea coupť; a fly boat that is sporty, spirited, interesting and aesthetically satisfying like an open, but with the element of comfort that derives from the fly. In short, it's a blending of two philosophies: the open and the fly. At the forthcoming Genova Show we will be launching the flagship of the Azimut line, a 116 footer, that's a really big boat which will take its place along with the other big names in an exceptional tradition: Baglietto, Admiral, Pisa..... they blazed the trail. Italy has been a master for 50 years and the 116' is a modern interpretation of the school.

Such growth in sizes also demands sufficient space to build, equip and maintain these boats. How much truth is there in the rumours we've been reading in the newspapers about your plans to buy the Orlando shipyard in Livorno?

It has to be remembered that some years ago we bought an area in Viareggio, the former area of Lusben Craft, to which we moved the Azimut production which we could no longer keep in the Avigliana premises. The expansion of recent years, at a rhythm of 30% a year, has meant that also the spaces that we have selected in the Lusben area for Azimut, Benetti and services are not enough. So we are obliged to look for new ones. We asked the community of Viareggio permission to extent into the area of the bankrupt Sec but the political powers that be only gave us part of what we wanted. So that's that. But since with the space available Azimut can't achieve all its development plans we've been looking around with the intention of moving at least one or two of these activities elsewhere, perhaps keeping the spaces in Viareggio for Azimut with services up to 35 metres and moving the Benetti steel hulls to a place with sufficient space also for the servicing activity for over 35 metres. The various possibilities include that of the former Orlando shipyard of Livorno. An area of 280,000 sq.m., really beautiful, with enough space not only to house Benetti and its services but also with prospects for future development.

The cost for Azimut?

The area is really expensive because the Council wants to make enough from the sale to conclude the Orlando shipyard crisis without bankruptcy. In spite of the expenditure we are ascertaining if the figure, including what is needed for restructuring work, is reasonable for us. As partial settlement the council could allow us the use of a part of the area for civil construction, town planning. If we make this move, more than 100,000 sq.m. would be dedicated to Benetti and to services. I believe we will certainly create the best luxury yacht service centre in the world.

There are already cranes there that can lift monsters.

There are the biggest crane gantries in Italy, that can raise 30 tons to dizzy heights, there's a haulage and launching system for yachts and there are three docks, of which one could be converted for yachts, obviously with some alterations, to transform commercial use into use for sailing craft. So the structure is there, also in the most beautiful position that exists, the centre of the Tyrrhene, opposite Corsica and Sardinia and the Tuscan archipelago.

One last question: Has Varazze started or is it at another standstill?

I'd like you to go and see it. It's taken off in great style. The whole area has been fenced in, a part of the breakwater dam is already built, we have tied up all the administrative procedures, we've come to an agreement with the licensees who used the port before. We think we will also come to one with the top quality firms that are doing it. After a wait of 20 years, we hope to be able to conclude the work in a really short time and we like to think that this will probably be the most beautiful harbour in the Mediterranean, in terms of function and look but also in the way it blends in with the area. The concept starts with a fair size sea dock with 750 places for boats but all the services are on the ground, including a commercial and a residential wing, one for services and last but not least one for craft. With these characteristics of quality and pleasure it should have life all year long and become a tourist centre.