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Small boat manufacturers 'more confident than ever' as sales recover

For Brock Elliott, the president of Campion Marine, confidence is the key word. "A boat is a luxury item," he said. "If you're not confident, you're not going to buy a boat."

But with sales up 30 per cent last year, the Kelowna-based boat maker said its not just his customers who are feeling more confident, he's feeling it too.

"I'm feeling the most optimistic that I have in six years," Mr. Elliott said.

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The past few years haven't been easy for small and medium-sized boat manufacturers, Mr. Elliott said. When he talks about boat-making, he frequently mentions former competitors who went out of business during the downturn.

The "start of the demise," according Mr. Elliott, was when the Canadian dollar began trading above its American counterpart in the Fall of 2007. Matters only got worse a year later, when the stock markets crashed and "the boat industry fell by 80 per cent."

This winter, for the first time since 2008, Mr. Elliott said he has back-orders that will keep his factory busy until March.

Still, Campion Marine doesn't have the staff it used to. The company currently employs 50 people, everything from designers and engineers to fibreglass assemblers and office staff. While Campion is hiring, the payroll remains much smaller than it used to be. When business peaked, during the winter of 2006 – 2007, the company employed 185 people. A couple years later, it was down to 42.

Mr. Elliott wasn't the only Canadian boat manufacturer cutting staff during the recession.

Henley Aluminum Boats, based in Manitowaning, Ont., also laid-off staff said the company's CEO Dave Ham. At one point, he said, the Manitoulin Island boat-maker was down to two people.

Now, Mr. Ham said he has a staff of 10. "Two years ago it was a bit slow but last year it broke wide open," he said.

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To stay in business during the downturn, Mr. Ham said he focused on building boats for commercial and industrial clients. Last year, that all changed with a higher number of orders from recreational boaters.

Mr. Ham said he thinks 2014 might be a little slower than last year, at least for him, but it's too early to tell.

Still, he said he's too busy for the Toronto Boat Show, the largest event of its kind in the country.

"We don't have time for that," said Mr. Ham. "We have customers coming to us."

But Mr. Elliott sees the boat show differently. He's flown into Toronto and brought 10 dealers with him. Boat shows are "very important" for his business, he said. For Mr. Elliott shows are both a chance to makes sales and entice potential future customers.

It's an expensive proposition, however, as each of Campion's three spots runs the company $60,000.

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Legend Boats, based in Whitefish, Ont., a part of Greater Sudbury, also puts a strong emphasis on the boat show. The event accounts for 10 per cent of the company's unit volume sales, according to Paul Berney, Legend's director of special projects.

Legend has 17 people at the show, along with 40 boats on display. "It's a major commitment," said Mr. Berney.

There are 376 boat manufacturers in Canada, according to the National Marine Manufacturers Association Canada, the recreational boating industry association. While the NMMA doesn't have specific number about just how many of those are small businesses, Sara Zammit, the organization's public relations manager, said the "vast majority are."

In the U.S., small businesses account for 97.4 per cent of boat manufactures, according to a survey by the NMMA.

Between Oct. 1, 2012 and Sept. 30, 2013, over 44,000 new boats were sold in Canada, according to the NMMA, with new boat and engine sales worth $2-billion.

But Canadian boat makers face tough competition from competitors based in the U.S.

Mr. Elliott, who worked as banker for 25 years before taking over the business his father co-founded 40 years ago in 1998, watches the exchange rates closely and sees every drop in the value of the Canadian dollar as a positive sign.

It's not about exports, he said sales of his boats in the U.S. haven't recovered the way his Canadian business has. Instead, he said it as an advantage at him, a lower Canadian dollar will increase the prices of U.S.-made boats.

Mr. Ham said the exchange rate could be good for him as well.

"If the U.S. dollar remains high, this could very well boost sales," he said. Mr. Ham has seen some recent success exporting south of the border. He recently sold a boat to a police department in Michigan.

Since he purchased Henley Boats in 1996, Mr. Ham said he's seen a shift in customer demand, mostly due to the high cost of fuel.

He said more efficient engines and aluminium hulls, which are lighter than fibreglass, have increased in popularity. It's what his company specializes in, welding hulls together from aluminum planks using a process called lapstrake.

For Legend, which also makes aluminum boats, the return to solid sales after the recession came sooner than it did for some of their competitors.

"We've had two exceptional years," said Mr. Berney. Legend currently employs 90 people.

While boating season may seem far away, things aren't slow for Mr. Elliott's staff in Kelowna. "This is our busy time," he said, they're busy making boats for the coming season.

(Correction: An earlier version of this story said that Mr. Ham purchased Legend Boats in 1996; he actually purchased Henley Boats.)

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