Mengi Yay, which carries its expertise in wooden sailboat construction to the production of steel motor yachts, ranks among the top shipyards that build the most boats in Turkey. The shipyard, which has launched more than 80 boats to date, is building its 96 hull numbered boat. Mengi Yay, which built its 76th boat in 2008, produced 17 new boats between 2008 and 2015. Hüseyin Mengi, Chairman of the Board of Directors of Mengi Yay, stated that the profitability in boat production decreased significantly in the post-crisis period, but that they had to continue boat production without interruption in order to meet their operating costs, and that their goal is to produce fewer boats but longer boats in the coming seasons.
We asked Hüseyin Mengi, Chairman of the Board of Directors of the shipyard, whose boats in the production phase we had the opportunity to closely examine, to make an assessment of the past, present and future of Mengi Yay, which will celebrate its 40th anniversary next year. Here are the answers we received:
“Before the crisis, between 2002 and 2008, yacht production progressed considerably in Turkey. In this process, we also took our share of this cake by producing boats in serious sizes and numbers.”
“The foundations of our company were laid when my late father Ramazan Mengi entered the sector as an apprentice in Ayvansaray in 1964. Then, Ramazan Mengi founded his own company in 1976 and started the 40-year adventure of Mengi Yay. Ayvansaray moved to Tuzla in 1984. In 1993, with the establishment of Mengi Yay company together with Muzaffer Yay, who is still our partner at the moment, the stage of institutionalization was completely started.”
“After losing our father in a traffic accident in 1996, I, my brother Mustafa Mengi and Muzaffer Yay continued our activities as shareholders of Mengi Yay. Before the crisis, between 2002 and 2008, yacht production progressed considerably in Turkey. In this process, we took our share of this cake by producing boats in serious sizes and numbers.”
“Since 1984, we have started to keep regular records of the boats we produce. In 2008, we were in the production phase of our 76th boat. We did not experience the crisis that started in the sector severely in 2008, because we had 7-8 boats in production. The production process of 80 percent of these boats was still in progress. Projects were indispensable for our customers. The boats were indispensable both in terms of financing and in important issues such as the progress and launching of the boat. Some of these boats were at sea. Therefore, we did not experience any problems between 2008 and 2010.’
“The reason why we built 17 boats between 2008 and 2015 is our bilateral relations, the guarantees we provided and the fact that we did our job well. When we look at the profitability ratios of these projects, some of them had none and some of them were quite low.”
“During the crisis period, the prices of second-hand boats coming to our country from abroad were very low due to the collapse of foreign markets in terms of financing and the economic problems of countries such as Greece, Italy, Spain and Portugal, which lead the world second-hand yacht market.”
“This situation hit all yachtsmen working like us in Turkey after 2010. As a company, we managed to get through the period between 2010 and 2012 with very low prices, sometimes with head-to-head work. In 2012, there was a work accident in our workplace and we had trouble with the effect of this event. In the 2008 crisis, we produced our 76th boat and today we are producing our 93rd boat. In other words, we produced 17 boats between 2008 and 2015. We can say that these projects were undertaken under difficult conditions and finalized with serious guarantees. When we look at the profitability rates, some of them had no profitability at all, while others had very low profitability. But sometimes it can be disadvantageous for shipyards to stand idle and not do business because there is no profit.”
“The reason why we built 17 boats between 2008 and 2015 is our bilateral relations, the guarantees we provide and doing our job well. We think that it is now more difficult to get work in Turkey than in Europe. It used to be much more difficult to get work from abroad, but nowadays the same conditions have become valid in the Turkish market. Unfortunately, as shipyards, we do not have a guarantee. As soon as the customer gives up on the boat, we can be in a difficult situation. In such processes, we have returned the deposits.”
“We are slowly healing our wounds after the crisis. Between 2008 and 2012, we made very serious investments in order to stand strong against the crisis. Because it was predicted by everyone that the crisis would end in 2012, but this thought was partially unrealized and naturally many jobs were lost in the sector. In 2014, the sector slowly recovered and experienced a stirring. Like many shipyards, we tried to cover our losses during the crisis period with serious bank guarantees and loans. Now we are trying to pay them back.”
“We made very serious investments between 2008 and 2012 in order to stand strong against the crisis. In 2014, we received two boat orders in serious sizes. As Mengi Yay, we are more hopeful about the second half of 2015 than 2014.”
“As Mengi Yay, we are more hopeful about the second half of 2015 compared to 2014. In 2014, we received two orders for boats of significant sizes. Despite this, the profitability rate does not exceed 5 percent on average. But we have to continue our production without interruption. We cannot afford to keep our shipyard empty because of the orders we have received at various times. As a result of the investments we have made and in order to survive as a company, we have to pay our loans, the salaries of our personnel and our checks in due time.’
“We will spend more effort to improve marketing. Instead of building 7-8 boats a year, we do not plan to build more than one or two 50-meter boats or two 35-meter boats in the same season. In addition to this, we are thinking of establishing a repair team.”
“As Mengi Yay Yachting, we have goals we have set. The first of these is marketing, which we consider very important. We will spend more effort on this issue. My brother Mustafa Mengi, one of the partners of our company, will take charge for the development of marketing. We plan to switch to boutique production after 2018-2019. Instead of making 7-8 boats a year, we do not plan to produce more boats in the same season, except for one or two 50-meter or two 35-meter boats.”
“We aim to strengthen our technical staff more and minimize the administrative staff, thus moving forward more systematically. In short, we plan to build fewer boats in larger sizes. In addition to this, we are thinking of establishing a repair team. We believe that repair is an important market for Turkey.”
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