PIERRE PRINGIERS’ ODYSSEY

PIERRE PRINGIERS’ ODYSSEY
The 71-year-old industrialist saved a boat yard from closure by buying its yachts for a charter business. Now he visions hundreds of boats zipping along the Sri Lankan coast on tourist charters
December 22, 2016
By Devan Daniel
19 min read

Pierre Pringiers shocked everyone when he announced his decision to start a tyre manufacturing company in Sri Lanka. The Belgian’s associates were puzzled by his decision. The island is paradise for a holiday, but for business Sri Lanka is hell, they told him.

They seemed right during the first few years of operation in Sri Lanka. “The beginning was a horror,” Pringiers recalls. “We had to start small and scale was painful to acquire. If not for tax concessions, we may not have made it.”
In 1984, Solideal-Loadstar started to manufacture and export solid tyres used in commercial and construction vehicles. Unlike normal pneumatic tyres, solid tyres aren’t filled with air. The company was a joint venture with Sri Lankan family-controlled business Jinasena Group, with Pringiers as chairman.

It was a tough business to be in. At the time, European and US-based manufacturers dominated global solid tyre supply, meeting 80% of demand. Also, Sri Lanka was soon fighting two domestic wars, against Tamil Tigers in the North and a youth insurrection in the South. Despite people telling him he made a mistake investing here, Pringiers persisted.

A new catamaran being built at the BAFF Polymech boat yard

Thirty five years later, the company Pringiers founded was dominating the global market for solid tyre manufacturing, with annual revenue topping $1 billion.

Growth brought opportunity to expand global reach. In 2010, the company merged with Canada’s Camoplast. Today, the company, known as Camso Loadstar, has a presence in 140 countries. Sri Lanka continues to be the company’s manufacturing hub, with products made here generating 60% of global sales. Camso Loadstar employs 5,500 people in Sri Lanka. The company has four R&D centres in Ekala, 20km north of Colombo, Belgium, Canada and China. Pringiers sits on the board at Camso Inc. and is chairman of its Sri Lanka unit.

Instead of relaxing, the debonair 71-year-old ventured into yachting-related businesses when no market existed for them here. Pringiers had to overcome several challenges in his odyssey with these ventures, and when they faced closure, he saw his opportunity to save them and grow the businesses: He would sail the yachts built by these companies to make money from the tourism boom.

Tourism here is growing since conflict’s end in 2009. Annual tourist arrivals averaging 465,000 between 1991 and 2009 are now touching two million. Average annual tourism earnings were $3 billion in 2015, the equivalent of 3.6% of GDP.

Tourism earnings in a few years could exceed those from remittances of Sri Lankans working overseas as the highest foreign exchange earner. But to attract more and higher-spending tourists, Sri Lanka needs to offer unique experiences like destinations like Thailand and Malaysia where tourism industry earnings equal 19% and 15% of GDP, respectively. Yachting and the associated lifestyle has the potential to attract tens of thousands of holiday fun seekers here: from rich yacht owners to upper-middle class high spenders enjoying days-long sail trips or charters of smaller vessels that sail to secluded coves for an afternoon of snorkeling, swimming and drinking champaign. Unlike luxury cruises, yachters don’t spend money onboard, but on land.

In Malaysia, marinas can berth over 1,400 yachts, Thailand over 1,300 and Singapore, with a fifth of Sri Lanka’s coastal length, can hold 752. Sri Lanka has the potential to berth as many yachts if it develops infrastructure.

Pringiers’ sailing charter company, Sail Lanka operates two catamarans. “We go all around the country in our yachts. We visit the islands in Jaffna and Kalpitiya. We cross over the shallow Adam’s Bridge,” Pringiers says. “One day, sailing between India and Sri Lanka will be common. It takes half a day and the scenery is so beautiful. This is by itself a major attraction.”

He has small companies here designing and building yachts, masts, sails, yards, cordage, electrical components, mini marinas and moorings. A technical school is training youth from fishing villages to build yachts, in electrical engineering, and in engine repairs and maintenance. Another academy trains them in sailing skills and ocean conservation.

But Pringiers’ faith in a tourism boom driven by the yachting industry is sorely tested. “It is hell!” he says in exasperation, perspiring, harassed by the Sri Lankan heat. These companies are either losing money or barely covering costs. He initially tried exporting his way out, but found that global markets were too competitive.

This forced him to focus on serving a domestic yacht market. “If anyone tells me ‘Mister Pringiers, we should export’, I will fire that person on the spot. No! We want to do things for the local market. We are preparing for this.”

Pringiers’ journey is arduous.

BAFF Polymech boat yard employs youth trained at the foundation

Sri Lanka lacks infrastructure and facilities to accommodate visiting yachts. It’s a chicken and egg situation. Without marinas, no yacht will come here, and if they don’t come here, no one is going to invest millions of dollars in marinas. Also, rich Sri Lankans aren’t interested in owning a personal boat as a symbol of their achievements, to entertain or as a means of soulful escape; they prefer investing in real estate, financial instruments or cars.

Pringiers is betting his money, time and energy that things will change, and he is applying the same formula that made his Sri Lankan solid tyre venture a global success. “Just like the solid tyre business, I can see opportunity where many cannot and I always follow my gut no matter what happens,” he says.

Yachts are either motorised or sail powered, and are typically owned by the rich as a weekend getaway or to entertain important guests. They are mostly confined to local waters, although some hardcore enthusiasts do sail to the world’s hotspots from lonely tropical beaches to the polar circles. Yachts come in many shapes and sizes, from boats big enough for two people to super yachts of over 24 meters with permanent crews. ‘The Monaco Yacht Show last October had 125 super yachts on display with a combined value of $2.7 billion,’ The Economist read.

Smaller yachts are still an extravagance. Size is not everything either. Sailing yacht owners tend to turn up their noses to motorised yacht owners. It demands specialised skills, and intimacy with wind and wave. Pringiers wants to promote sailing over motor-powered luxury boats. “We want to stay on the right side of things, we don’t want to upset the ecosystem,” he says.

People who cannot afford to own a boat or don’t have sailing experience can hire the services of a charter company for a day-trip or overnight stays. Pringiers incorporated Sail Lanka Charters in 2014 to tap into this market.

Sri Lanka lacks infrastructure and facilities to accommodate visiting yachts. It’s a chicken and egg situation. Without marinas, no yacht will come here, and if they don’t come here, no one is going to invest millions of dollars in marinas

The global yacht charter market reported sales totalling $35 billion in 2014, nearly half of Sri Lanka’s GDP, and is forecasted to reach $51 billion by 2020 as disposable incomes rise, according to Future Market Insights. Less than 5% of this is generated in the Asia Pacific region, so there is room for growth.

No wonder Pringiers is optimistic about the potential for Sri Lanka.

In most yachting hotspots in Asia like Thailand, charters hop from island to island. In Sri Lanka, people can enjoy unique experiences on land and sea. “The beauty of this is that you can go anywhere around the island and find pristine beaches, spend time at a fishing village cut-off from civilization, or visit an old church in Jaffna on a God-forgotten beach,” Pringiers says.

But what he is most passionate about is its potential to uplift entire communities. “No one needs to be left behind in the luxury boating industry,” he says.

There are simple people leading simple lives around the coast, which tourists like to experience. There are no hotels and no factories, so this will create livelihoods for people in these isolated pockets around the coast. “The children in these places have no opportunities, but make a living fishing or growing rice. Bringing in this type of tourism will create whole new industries,” he argues.

Whale watching and surfing are two such examples.

The Bay of Weligama in the South is popular for surfing, with over 200 surfers on a good day. “Five years ago, you probably didn’t see anyone surfing, but today, around 20 young locals have set up surfing camps there and they even give lessons,” says Pringiers who has made his home at Mirissa, 10km away from where whale watching is popular.
The fisheries harbour is packed with nearly 60 whale watching boats and nearly all of them owned by local fishermen. “This is what we like about this kind of development. The whale watching industry is in the hands of the local population. There are no large multinationals here. This is our mission with yachting as well,” he says.

Pringiers established Ruhuna Sailing Association to teach local fishing community children to sail, and some of them captain yachts chartered by Sail Lanka. He is more than willing to allow these young people to start their own charter companies by donating yachts built in his yard and replicating the success of the whale watching industry.

Pierre Pringiers could have chosen an idyllic retirement after slogging it out in Sri Lanka for over 30 years to build a billion dollar global company. The Belgian has built his home on a hill overlooking Mirissa beach and the Indian Ocean. The house, which looks like Noah’s Ark from the main road, was designed by Japanese architect Tadao Ando, known for his use of natural light and creating concrete structures that blend in with natural surroundings. Pringiers lets his son take care of the business. But his retirement from active corporate life is far from idyllic.

“A strange succession of events brought me to this. I am 71 years old, I did not expect to do any of this. Life is always a succession of karmic or unexpected events,” he says.

Pringiers calls himself a yachtsman. He is passionate about sailing and has owned boats all his life, but never intended it to be a full-time venture. The 2014, the Indian Ocean tsunami changed all that.

The tsunami left in its wake shattered lives, livelihoods and property. Pringiers and his solid tyre business partner Tissa Jinasena set up the Solideal Loadstar Rehabilitation Trust to rebuild Mirissa’s fishing communities hit by the disaster. Private and corporate donors pledged around $7 million. The trust rebuilt 750 houses, 30 fishing boats and restored 250 boat engines. It also donated a boat lift to the Mirissa fisheries harbour.Two ye

Solar Impulse manufactures a range of products related to yachting and pleasure boating

Years later, Pringiers decided to convert the trust into the Building a Future Foundation, aimed at creating long-term opportunities for the fishing community in the south by training young people in skills that will help them earn a living. “We realised that the market for their skills will come from the ocean. The ocean that destroyed so many lives and livelihoods will give them a future. There were two areas of ocean-based activities that we focused on: fishing and leisure boating or yachting,” Pringiers says.

The boat yard the foundation set up to repair the tsunami-damaged boats doubled as a training centre. In 2008, to help the young boat makers find jobs, Pringiers helped a foreign investor set up the Barramundi Boatyard at the Koggala Industrial Zone, about 20km from Mirissa. The investor had wanted to set up his yard in China, but Pringiers had dissuaded him, convincing him to relocate to Sri Lanka instead, and helping him incorporate the company and get Board of Investment tax concessions.

The children of Mirissa fishermen were learning all the skills related to boat building from engines, fibre-glass, building masts, making sails and finishings like air conditioning, refrigeration, electronics and woodwork.

Young people were also trained on the finer points of boating and sailing. Pringiers allowed a group of five young men to use his 16 meter boat to make money for themselves by taking out tourists on boat rides or sport fishing. “It was a misery. They couldn’t manage it and I had to keep financing their operations,” he says.

One day, something changed. The men took out an English couple for a round of sport fishing. They returned that evening to find Pringiers at the Mirissa fisheries harbour. “Did you catch anything?” he called out to them. “No, Mr Pringiers!” came the reply, but he couldn’t understand why they were all smiles. “We saw whales, lots of whales,” they shouted back. Just like that, by accident, they stumbled on blue whales that had made Sri Lanka their home for centuries, and the whale watching industry was born.

The five made Rs1.5 million in sales in the first year, packing their boat like a bus. Four years later, they grossed Rs12 million in sales, paid for two new boats and secured a bank loan for a third boat.

Pringiers floated two companies, and let the Mirissa youth run them as their own. He had to find space in the fisheries harbour to moor the boats. The fishing community erupted in uproar and local media covering the protests called Pringiers’ efforts a foreign invasion of the harbour. But when the fisherfolk understood what was happening, they warmed up to Pringiers. “I have never met anyone as honest as the Mirissa fishermen. They are tough, and they have to be to make a living off the ocean. If you steal a fish, you die,” he warns.

“A strange succession of events brought me to this. I am 71 years old, I did not expect to do any of this. Life is always a succession of karmic events or unexpected events,” Pringiers says

Around this time, the Barramundi Boatyard got five orders to build luxury sailing yachts for the European market, but the investor couldn’t keep the yard open because of mounting costs. Pringiers was forced to step in, buying a 50% stake. “I had no choice. I couldn’t allow anyone to lose their jobs,” he recalls.

In 2011, Pringiers finished the five orders, which were catamarans, sailing yachts with two hulls, priced at a loss. The yachts were seaworthy, but the boatyard did not do a great job with the finishing touches. “When the first yacht was displayed to a buyer in Europe, his wife cried—ooh, the lighting is all wrong here, there are wires showing here, the wooden flooring is uneven here, she went on and on!” Pringiers recalls, mimicking a distraught angry woman. He lost $2 million on the deal, but a valuable lesson was gained.

A year later, the boat yard stopped getting orders as the global financial crisis unravelled, and it did not help that competition in the export market was intense. Pringiers desperately looked for a partner to invest in a stake, but no one was interested. The biggest problem was the non-existence of a market for yachts in Sri Lanka. For a second time, the boat yard’s existence and jobs were on the line.

With no one willing to invest, Pringiers tried something else.

In 2014, he invited three Belgian MBA students to research Sri Lanka’s yacht market potential. They came back to Pringiers in three months. “Mr Pringiers, no one in Sri Lanka is going to buy a yacht from you. Many Sri Lankans wouldn’t know what to with a yacht, let alone sail it. Importing yachts is expensive and rich Sri Lankans prefer investing in land, apartments and fancy cars. Even the corporate and hotel groups aren’t interested in buying yachts”.

The three MBA students brought gloom, but offered some hope. “There is a way out, if you have the guts, Mr Pringiers,” they told him. This is what Pringiers had to do: Float a charter company buying yachts built at the boat yard. With two million tourist arrivals and no competition, the charter company can make enough money to sustain itself and the yard. “There is no reason why you shouldn’t be successful,” they told Pringiers’ who wasted no time incorporating Sail Lanka Charter.

Pringiers stumbled on yacht chartering like he did whale watching, but for one big difference: potential. Whale watching is concentrated in three main areas around the island—Mirissa in the South, Kalpitiya in the West and Trincomalee in the East—but yachting can play in all 1,400km of coast. Sri Lanka also has an edge over many popular yacht charter destinations in Asia. “We have the same tropical weather as in Thailand, for example, but we have two seasons: one in the West coast and another in the East, which makes viability even more interesting,” Pringiers says.

Building marinas to provide a safe harbour for yachts is a challenge. There aren’t decent marinas to attract foreign yacht owners or new charter companies. Without them, investors will see little point in building marinas.
For Sri Lanka to become a serious luxury boating destination, it will need decent marinas, costing around $10-30 million each to build, according to Pringiers. These marinas will have to be built outside fisheries harbours to prevent friction with fishing communities. He spent $250,000 building a mini marina at the Mirissa fisheries harbour, paying Rs500,000 a month as rent.

An exhibit at Boat Show Sri Lanka 2016

Pringiers is trying to woo investors, bankers and even hotel chains to partner him in building an all-purpose marina. No one is interested. Several years ago, he invited investors to develop the mini marina at Mirissa, but only raised $1.5 million. “People laughed at us,” he says. “But soon they will be demanding a piece of the action.”

There is a reason why Pringiers is optimistic. Sri Lankans are beginning to see the potential for luxury boating and yachting.

At the Boat Show Sri Lanka 2016, held at the Dickowita Fisheries Harbour in October, people gawked at a few small pleasure boats on display. But not everyone was impressed. “This is not a real boat show,” said one participant. There was just one yacht on display, but it made a big impression. It belonged to Accolade Ventures, a company with plans to develop yachting in Sri Lanka.

Accolade Ventures is making yachts, and plans to invest in mini marinas. Its Chief Executive Dimantha Jayawardena, who operates manufacturing companies here and in China, is partnering Italian super luxury yacht maker Benetti in this venture. Pringiers is welcoming the competition with relief.

“When we promote Sail Lanka at travel marts in Europe, we are the only charter from Sri Lanka. It will be good to have five or six more companies competing with us; then more people will come to Sri Lanka to sail,” Pringiers says, adding, “There’s plenty of room for more.”

Competitors can also lead to collaboration. Jayawardena is setting up an industry body to represent charter operators to lobby the government to develop yachting here. He is working on a white paper detailing the yachting industry’s potential, infrastructure requirements and possible locations for marinas.

ringiers believes that, if Sri Lanka had the infrastructure, several hundred of yachts could be moored at different locations around the island. “I have a pessimistic forecast. If we can have 150 yachts ten years from now and 650 twenty years from now, I would say Sri Lanka did a good job,” Pringiers says.

Without government policy, it’s difficult to see investments pour into marinas and waters open up to foreign yacht owners. The harbours in Galle in the South and Trincomalee in the East allow stopovers for yachts, but it’s a hassle to get visas and other clearances. But Pringiers believes entrepreneurs can be catalysts for change by doggedly pursuing limited opportunities and getting things done. He wants his sailing charter to be successful to convince everyone else of the potential of yachting.

Pringiers’ Sail Lanka started operations with one yacht, Topaz, built in Sri Lanka. The 14m luxury catamaran was designed for day cruises for up to 15 people. Its open deck, cockpit, cushioned benches, and teak tables and chairs are great for hanging out. The boat has a large sundeck, two toilets and a galley (kitchen). That was an easy one to build. The following year, Sail Lanka commissioned Pearl, similar to Topaz.

In 2016, his boat yard tuned out Jade 1, a larger catamaran than can carry up to 40 people. The yacht, which cost $650,000 to build, has four cabins with double beds for overnight cruises.

Pringiers is trying to woo investors, bankers and even hotel chains to partner him in building an all-purpose marina. No one is interested. Several years ago, he invited investors to develop the mini marina at Mirissa but only raised $1.5 million. “People laughed at us,” he says. “But soon they will be demanding a piece of the action”

Charter sales have doubled each year since 2014, but Pringiers scoffs at the idea that it’s an achievement. “You grow at 100% starting at zero and what do you get?” he asks. Sail Lanka is barely covering costs. “Hopefully, we can breakeven by March 2017,” he says. He needs to scale the business to make money. He is adding three more yachts like Jade, doubling his fleet to six. “This is the only way to grow. We will become very profitable with the first three yachts, covering overheads,” he says.

Pringiers is thinking big. His boat yard is developing a prototype for a luxury yacht that looks and feels like an upscale boutique villa. Six private cabins will be located on deck, not in the hull like in most yachts, opening up to a view of the ocean. A perfect honeymoon getaway, he says.

Pringiers wants Sri Lanka to be the one-stop shop for yachting requirements in the region. He continues to invest in training and building capacity at his yacht-related ventures, despite them making losses. These companies were established solely as a philanthropic exercise to provide livelihood opportunities. Profit making was never the goal. Now every company has sales targets to breakeven by the end of March 2017.

Pringiers’ odyssey is arduous, but he has a constant star to chart his course. “Tourism is what is going to fill our boats,” he says. “Sri Lanka can be the yachting hub for the region and it will transform the tourism sector to a whole new level.”