Talking about sailing superyachts with Andrea Micheli, CCO of Southern Wind

It was exactly four years ago, in the immediate post-Covid period, we spoke with Andrea Micheli, Southern Wind's Commercial Director, via video call. Today, we met in person at the headquarters of the Italian branch of the group, located in a noble palazzo in Genoa's historic center, accessible only on foot. The setting has undeniable charm, a reminder of the glory of "La Superba," as Genoa was once known during the Maritime Republics era.

What has changed in these four years, and how has Southern Wind evolved based on the vision you shared back then?
First, thank you for visiting our headquarters. This four-year cycle is starting to feel like the Olympics... and we hope Southern Wind will match that longevity! Before our meeting, I went back and read our previous interview and I’m pleased to say we’ve achieved what we had set out to do. There has been a steady evolution that significantly accelerated in the last four years. Back then, we were coming off two crucial events: the 2018 management buyout, and the purpose of our 2021 interview was to assess Southern Wind’s progress three years on. But in the meantime, there was another big problem: the pandemic, which delayed the implementation of many ideas and improvements we had planned. We are proud to say we navigated that difficult period well, though it did slow us down. Looking back, we can confidently say that the progress made over the last four years may even surpass that of the previous four.

Looking back, how do you evaluate the management of pandemic and the subsequent, unexpected surge in demand that that followed?

Covid brought major technical and human challenges. Such challenges can either strengthen or weaken a team—fortunately, we emerged stronger. Personally, I learned to collaborate more effectively with other top managers, even remotely from South Africa. Ironically, distance brought me closer to the shipyard. That’s the technical side. On the market side, our construction cycles are long, so we tend to feel the effects of crises or opportunities with some delay. Our build times average around 18 months, meaning we benefit from a solid order book during downturns, but it also limits our agility during market booms. Unlike other builders, we carry out nearly all work in-house, relying on subcontractors only marginally. We approached the pandemic with a strong order book, but we struggled with the subsequent price surge. Some of it was due to raw material costs, but part stemmed from supplier speculation. Costs spiked, while clients resisted significant price hikes. Our pricing policy is based on estimated costs with a margin that allows us to remain financially healthy.

Did you revise your contracts to absorb potential increases in supply costs?
We made minor changes. It’s a complex issue, the construction material’s impact on the final price is limited, and the variety of components makes indexing nearly impossible. So, we negotiated with suppliers on long-term strategies while protecting our margins.

A yard is defined not only by its yachts but also by its corporate culture. You previously mentioned Southern Wind’s multiculturalism. How has that evolved?
We’ve remained true to our values, and we’re now seeing the results of what we’ve sown. We’ve adopted new technologies and improved production processes. Our facility has expanded and become almost entirely self-sufficient from an energy standpoint, thanks to solar panels. Our yachts are increasingly complex and refined. While our annual production hours are similar to those of 7–8 years ago, we now launch two yachts a year instead of three, but each one is far more sophisticated. We’ve therefore decided to gradually increase production capacity by 15–20%, especially with the introduction of the larger SW123, which demands more labor hours. In Europe, this would mean more subcontractors, but here we’re opting for cautious internal growth to protect our team. Downsizing would be painful, because it would require staff cuts, so we grow slowly and decelerate even more gradually. Entrepreneurial sustainability is our guiding principle.

How many direct employees do you currently have?
We’re approaching 350, with a managerial team that includes both local and European professionals. As the only superyacht builder in Cape Town, we can’t source talent locally, so we import and train it in-house. The local government supports the superyacht sector, especially in refit infrastructure, and welcomes international professionals. We collaborate with universities in Europe and South Africa such as Politecnico di Milano, University of Genoa, La Spezia, and Southampton, offering six-month internships with hands-on production experience. This program helps us identify and retain talented individuals.

Regarding protectionism, does being based in South Africa help with sales in the U.S.?
We’re still assessing that. A strong dollar helps, and our physical distance from geopolitical hotspots is a plus. So far, the war in Ukraine has affected us more than tariffs, especially due to rising costs of titanium and carbon—materials we use heavily. It’s less about tariffs and more about global instability. Our yachts are niche products for high-end clients. It’s not the cost that dissuades them but their willingness to spend during uncertain times.

The Giuliano Luzzatto's conversation with Andrea Micheli continues in an upcoming second part, where we’ll explore Smart Custom design, the Southern Wind owner community, the SW Rendez-vous & Trophy in Porto Cervo, and other exclusive brand initiatives.

Giuliano Luzzatto

 

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