“You have to do things perfectly. . . but it’s so secret” – how to build an oligarch’s yacht

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The industrial area and sprawling truck park in the small Dutch town of Oss gives almost no clue as to the opulent yachts being built in nine covered docks, or the identities of their clients or owners.

But Heesen, the local shipyard that boasts of “producing some of the best superyachts in the world,” is part of a tight-knit network of builders and service companies serving the super-rich on the water that is now under scrutiny for its Russian oligarch clientele.

Heesen is ultimately owned by Vagit Alekperov, who runs Russian oil company Lukoil and is under sanctions in the UK and Australia. The company, which says it is operationally independent of Alekperov, has built three affiliated Galactica yachts. It has also built two linked to the UK and EU-sanctioned businessman Igor Kesaev.

It is part of a network of companies in the European superyacht supply chain, stretching from designers in Norway to builders in Germany and Italy, brokers in Monaco and crews in the UK.

They balance discretion in their operations with extravagance in their marketing and end products.

Many now watch nervously as governments step up confiscations in a ramping up sanctions campaign against Russia over the war in Ukraine.

Just this week, the Dutch government placed 18 yachts in shipyards under restrictions while their ownership is checked and confirmed that two other boats that are in the Netherlands for maintenance have links to sanctioned individuals.

Egbert Wattel, managing director of Younique Yachts in Makkum, another Dutch shipbuilding town, describes a longstanding culture of secrecy even for builders of smaller boats like himself: “Most owners don’t want everyone to know that they are building a yacht. It has always been like this. It’s like being a doctor – you don’t mention who the patients are.”

Makkum has two huge dry docks – one 110 meters long and the other 120 meters – for superyacht outfitting, allowing vessels to be completed while being enclosed on all sides. They can handle all but the very largest boats.

The Fish Bar in the shadow of the ‘Cathedral’, one of two dry docks in Makkum where superyachts used to be outfitted © Chris Cook/FT

Ferrye Jansen works in a fish bar in the shadow of the “Cathedral”, one of these structures. He knows where many of his customers work. But they can’t tell him what they did. “They buy their fish and fries, but they can’t say anything. It’s classified! . . . I swam over but couldn’t see anything.”

Russians began actively buying yachts in the 1990s when a select few made quick fortunes after the collapse of the Soviet Union. Roman Abramovich, who made his money from oil, was an early adopter when he bought Sussurro in 1998.

Dozens of others followed his example as the number of billionaires grew. Superyacht timesan industry publication, estimates that Russian owners now account for 9 percent of the world’s 2,000 superyachts 40 meters and longer.

Bar chart of superyacht fleet owners by region (%), showing Russians own 9 percent of all superyachts - but one-fifth of the most elite group

In the over 80m category, Russians own a fifth of the 153 vessels, second only to Gulf buyers. The world’s largest superyacht by volume, the 168-metre Dilbar, which is now stranded in Hamburg, is owned by Alisher Usmanov, a sanctioned oligarch close to Putin, according to the US Treasury Department.

Boat International, a research firm, reports that Russian buyers account for around €3.9 billion of a cumulative global order book of €35-40 billion. Italian shipyards build the most superyachts for Russian customers with 60 superyachts under construction, followed by the Netherlands and Turkey.

Some companies have adapted their marketing to the proliferation of Russian buyers. Describing an event hosted by a superyacht builder, one industry person said: “We were invited there and the only two languages ​​spoken were Russian and English. All entertainment for the event was provided by the Russian Philharmonic.” The website of yacht builder Italian Sea Group, based in Carrara, Italy, is available in Russian, in addition to Italian and English.

Russian buyers are known to have particularly expensive tastes. In addition to saunas, helipads and even submarines, they ask for ultra-luxe amenities, including rare tropical woods, special leathers and solid gold fixtures. “They are a step below the Saudis,” said one broker.

A Dutch craftsman highlighted both the attention to detail and secrecy as characteristic of the industry: “The standards are incredible. You just have to do things perfectly. . . but it’s so secret. If I did something amazing today, I can’t show it to my mother. I am not allowed to photograph my work.”

Crew members aboard Galactica Super Nova
The Heesen shipyard has built luxury ships, including three ‘Galactica’ yachts, linked to Vagit Alekperov, who runs Russian oil company Lukoil © Chris Ratcliffe/Bloomberg

Superyachts are often owned by offshore companies, which can disguise their ownership and offer tax benefits. Sailing in international waters also offers some protection from authorities on land.

A former coastguard in Antigua told the Financial Times Russian superyachts often have armed private security guards. “We leave her pretty much alone [alone]. We cannot search such a large boat and we know the owner may have a direct relationship with politicians in this case, so we have to be careful.”

However, those who work in the industry say owners generally only spend a few weeks a year on their yachts at most. Although there is an active resale market, they also offer a low return on investment as annual operating costs are typically 10 percent of the purchase price.

The need for large crews – typically male for the decks, young and female for the interior, and with a general fondness for non-Russian speakers – plus regular resupply and online satellite tracking alongside their highly visible presence in ports also mean that the discretion is limited.

Still, some Russians have invested in the industry.

Heesen was bought by Alekperov more than a decade ago and is held through his Cyprus investment vehicle, Morcell. The company said it “[condemned] violence in any form [hoped] for a speedy solution to the war” and that it “cooperates with government agencies in full transparency.”

Its non-executive directors Pavel Novoselov and Pavel Sukhoruchkin resigned after Russia invaded.

Imperial Yachts, a Monaco-based brokerage firm, was founded in 2005 by Evgenny Kochman and his sister Julia Stewart after several years of selling yachts to Russians. It remains a very influential intermediary for Russian buyers, although it has since diversified its customers.

Bar chart showing superyacht sales last year were the highest since the financial crisis

The company said: “IY is a global company with an international customer base and we are confident that our business will continue as it is not dependent on a single region. While the sector will clearly be affected, it is difficult to understand what that will be.”

Another broker, Burgess Yachts, a high-end company with offices around the world, has a list of Russian clients – both owners and those looking to rent at rates in excess of $500,000 per week.

The company appeared to remove details of 10 or more superyachts from its website after the invasion began. But an unedited mirror site, used for testing purposes, remains active so users can see which boats have gone.

These include Axioma, a 72-meter ship designed by Dmitry Pumpyansky that was detained in Gibraltar last month and was previously available for €299,000 a week. Pumpyansky was sanctioned by the US back in 2017. Sky, a Kesaev-owned boat valued at $40 million and 50 meters long, could previously be chartered for $245,000 a week.

Burgess said in a statement that it “continues to closely monitor the current situation in Ukraine and is complying with all regulations and guidelines issued by governments in the areas where the company operates.”

In Makkum, local business owners agree that superyachts are the town’s main source of income. The yard employs 400 people directly, but also attracts a rotating workforce from subcontractors who drink in the city’s bars and stay in the hotels.

But there’s little clue as to how the city’s economy will be affected by the sanctions. Subcontractors often do not have a clear view of their end customers. One said: “To be honest we don’t have a good sense of who the customers are. Sometimes it comes out or they visit. But I was working on something and didn’t realize who owned it until I saw it was confiscated.”

Others in the industry emphasize that they carefully follow the “know your customer rules” and do not want to fall within the scope of sanctions. They also downplay suggestions that the raid could hurt business.

Rory Jackson, business editor at The Superyacht Group, a data and research company, said: “I don’t think it will make buyers suspicious. There is no point in buying such a vessel and then trying to make it unobtrusive.”

Additional reporting by David Keohane, Cynthia O’Murchu and Robert Smith

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