Profile Samir Badro, the chief executive of the Greenline Group, had no idea just how much of a landmark year 1976 would be for him and his future.
Luxury never goes out of style
Samir Badro, the chief executive of the Greenline Group, had no idea just how much of a landmark year 1976 would be for him and his future. The architect, who was here to work on a one-off project, was caught in the UAE when the civil war in his homeland of Lebanon forced the closure of Beirut airport, leaving him no choice but to stay and forge a life and a business for himself. The Greenline Group has come a long way from its humble beginnings in Sharjah, where Mr Badro opened his first factory with 10 employees. Today, the company employs more than 1,500 people worldwide.
A lucky break saw the fledgling company fit out the interior of a royal palace in the UAE. As word of mouth spread, Greenline became a popular choice among members of the country's royal families seeking to upgrade the interiors of their palaces. Mr Badro mentions the names of a few of the dignitaries he has worked for. Fast-forward to today and UAE-based interior contractors focused on the luxury hospitality sector and the superyacht industry, including the Greenline Group, the parent company of Greenline Interiors and Greenline Yacht Interiors, remain confident of continued growth despite the global economic downturn. This confidence, they say, is a result of forward-booked contracts and a selective approach to doing business. "We see more growth coming," Mr Badro says. Indeed, with a client list that includes George Bush Sr, the former US president, and members of the UAE's ruling families, Mr Badro seems almost nonchalant about the financial crisis, despite admitting difficulties obtaining payments from some clients.
"The business is good, but the payment is difficult," he says. "A lot of clientele have some problems with finance, so we have some short delays. [But] we manage." His confidence largely stems from the fact that Greenline Interiors had already secured bookings before the onset of the financial crisis. "Fortunately, we are almost fully booked for two years now, and our aim is to fill the year after that," he says.
Mr Badro says Greenline only deals with very high-end luxury projects, such as the finishing of 202 suites in the Burj al Arab hotel, the design and fitting out of more than 20 palaces for the UAE's ruling families, and the Presidential Library in Texas. He says the niche market has helped to insulate the company from the global economic downturn, placing it in the enviable position of being able to select the projects it takes on: "We want slow growth, we don't want to make commitments and fail to deliver. This is where we built our reputation, delivering quality."
Among current ventures, the company lists the fitting out of the Kempinski Hotel in Bahrain, and a Dh700 million (US$190.6m) contract for three luxury hotels in Syria. In addition, the company is working on a number of private projects, including one for a ruling family. Both Greenline Interiors and Greenline Yacht Interiors have current running projects and incoming projects worth a total turnover of Dh1 billion, the parent company says. "When we're talking about the royal family it is always confidential," he says, describing a current project for one of the ruling families in the UAE as "amazing" and "incredible".
However, he refuses to share any further details, explaining that Greenline's staunch adherence to client confidentiality has been a key factor in its success. On the yacht side of the business, he says the company only works on the "white boats", or superyachts, which always measure more than 70 metres. Currently, Greenline Yacht Interiors is working on what will become the world's largest privately owned superyacht, at more than 150 metres. The yacht has reportedly been commissioned by Roman Abramovich, a Russian billionaire, but, once again, Mr Badro remains tight-lipped on the details.
In addition, the company is also involved in a 141-metre yacht that is being built in Abu Dhabi. With expected growth in mind, Greenline Group set up new headquarters in Jebel Ali last year. The company says this site has the largest factory for luxury superyacht interiors in the world. Greenline already has locations in 10 cities around the world and is currently looking at setting up an office in Doha.
"There's a lot of demand, more than we thought, in the yacht business," Mr Badro says. "We're booked for the next year - we cannot sign new projects. We are selecting projects for 2011 and 2012." The yacht interior division was established in 1997, not long after the company was asked to do the interior of a dhow owned by a member of a royal family. But Greenline says that it was not until the early 2000s that the company landed its first major contract: three sister ships each measuring 70 metres for a European shipyard.
The average cost of a custom-made yacht, from building it to outfitting it, is about ?120m (Dh622m), he says. "Not even Madonna can afford to own a superyacht," Mr Badro says. Mr Badro also confirms that Greenline Yacht Interiors is in talks with a European cruise line. Greenline's closest competitor in the UAE is Depa, previously known as Arabtec Interiors, which also fits out luxury hotels and yachts.
The Dubai-based interior contractor said last month that it saw first-quarter profits rise by more than 40 per cent compared with the same period last year, with a contracted backlog of Dh3.2bn, as of the end of March, for 154 projects. This includes a Dh130m contract for Burj Dubai, Dh49m for a private yacht in Germany, Dh105m for the Crowne Plaza and Staybridge hotels in Abu Dhabi, and Dh45m for the Nile Hotel in Egypt.
"This backlog consists entirely of projects that are already at the advanced construction stage," Depa said in a trading statement. The company added that it was on target to achieve about 30 per cent revenue and profit growth for the full year in 2009, a significant amount of which was expected to come from Abu Dhabi, Saudi Arabia and Asia. But the luxury boating industry has by no means managed to escape pressure from the current economic environment.
"Every sector of the leisure boating business in the world is affected by the current global downturn, like most other high-value discretionary purchase projects," says Mike Derrett, a marine industry expert. "What preserves the superyacht industry is the fact that it's a long lead time for delivery, because it sometimes takes 18 months to three years to build a large yacht, so there's quite a lot of production already in place."