Millennium Marine, a yacht building company established by Wantong Group in 2008, is giving the final touches to its deal which involves acquiring the Dalla Pieta brand, design drawings and 13 half-finished yachts.

 

"The total deal value be around 100 million yuan," said Xu Lian, assistant to the board chairman of the group. "We are working out the legal formalities and expect to complete the deal by mid-August this year," she said.

 

Xu did not reveal the financing modalities of the deal but Zhejiang local media reported that it would be an all-cash purchase.

 

Besides aluminium products, the business of Wantong Group also includes bicycles, yachts and international trade with a total investment of 300 million yuan.

 

"We are confident of profiting from the deal as the purchase price is still low," Xu said.

 

Dalla Pieta, which has been making yachts for nearly 50 years, found itself in a financial quagmire due to the global financial crisis.

 

"With the help of its brand and technology, we hope to enhance our image in both domestic and overseas markets. Besides, the purchase will also increase our annual capacity and enrich our product models," said Xu.

 

At present, Millennium Marine has the capacity to build 20 yachts every year. Its first 38-feet yacht will be launched in August. After the purchase, technicians from Italy will come to the Chinese company for guidance.

 

"I think Wantong Group will face difficulties in sales after the purchase because of the crisis. Currently, many orders have been cancelled and few people have shown interest in the finished yachts. Many foreign builders are selling their products at half prices," said Zheng Weihang, secretary-general of China Cruise & Yacht Industry Association.

 

But Zheng is optimistic on the deal in the long run. "As the crisis diminishes, I believe Wantong Group will see rapid growth in yacht business with the Italian brand and its marketing channels," he said.

 

At present, there are about 1,000 yachts possessed by corporations and individuals in China, meaning one yacht for every 1 million people on an average.

 

"Latest statistics show yacht sales in China exceeded 1.3 billion yuan in 2007 and the figure is expected to touch 100 billion yuan in the next 10 years. I think yachts will become the next hot spot of domestic consumption as housing and autos," said Zheng.

 

"Yacht builders in China lack independent brands and outstanding designers. The image of China-made yachts is not high-end enough. Such overseas acquisitions will help upgrade the industry and strengthen competitiveness of Chinese builders in global markets," said Zheng.