19 December 2014

The Art of Design

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Harry Vafias is one of the most successful shipping entrepreneurs in the world, as well as a lifelong lover of boats and the sea. Don Hoyt Gorman speaks with a man who balances shrewd business acumen with a passion for yachts and the life it brings.
While other young men might have coveted the lines and power of an Enzo Ferrari, Harry Vafias had his heart set on the futuristic beauty of a Jon Bannenberg design: Southern Cross III.“For years, Southern Cross III was my favourite yacht: Whenever I saw her in a magazine or at anchor or in ports wherever I travelled, I was impressed by her design and lines,” Vafias, 36, explained from the offices of Stealth Gas, just outside of Athens, Greece. “In 2012 the time was right and I was able to purchase her.” Nishii Vafias is a trader at heart. So of course, even as he cherishes his dreamboat, he has the superyacht for sale with Fraser Yachts under her new name of 55 Nishii Bannenberg. “I don’t think it’s clever to fall in love with your assets,” he says. “If someone comes along and makes a good offer for her, and I think it’s worth selling, I will.” The story of Vafias’ course from student in London to multiple yacht owner is shockingly brief. After studies in shipping trade and transport at Guildhall University in London and working for Braemar and Seascope (prior to their merger), Vafias set up his own company. “I asked my father for an initial personal loan to start an oil tanker business. He gave me four million and I raised another four million in debt and I was able to buy my first two oil tankers.” Almost as soon as he started operations in 1999, an old single-hulled tanker called Erica sank off Brittany, and charterers, especially the oil majors, became very picky with the vessels they used to transport their oil. With his two old tankers, Harry should have been finished. But the market rebounded in his favour. Demand for space on new double-hulled ships sent the day rates up 500 per cent. “After a couple of months, the rates were so high customers started coming back to chartering single-hulled ships, but at a much higher day rate than before the accident,” Vafias says. “Within months we were making triple what we’d projected, so we paid down our debts and injected cash back into the business.” Four-and-a-half years after starting Stealth Maritime with four million in debt, Vafias sold the company for close to $400 million. “I gave two thirds back to the family for helping me start – I couldn’t have made it without them. And I kept about USD$100 million for myself, and spent the summer of 2004 analysing the different shipping segments to decide which one I wanted to invest in. I bought nine gas ships, listed on NASDAQ and raised USD$160 million.” At 27, Vafias was the youngest CEO of a listed entity on NASDAQ. Today, Stealth Gas has USD$1.1 billion in assets, including 60 ships with 17 under construction in Japan and Korea. Vafias rebuilt his original tanker company, now with 22 new double-hulled ships, and has just started a new dry-bulk company. “As a group, we control a fleet of about 90 ships, all fully owned, making us the third largest group by number of owned ships. The total fleet value is USD$2.1 billion and total debt is USD$1.1 billion.” A Life on Boats Since he was a young boy, Vafias’ family has had boats. “When I was young, we had a small rib which we used every summer around our summer house in Sounio, south-east of Athens,” he says. “Our first yacht, a 47-foot Technema Posillipo, was bought when I was six or seven years old. Every summer we toured the different islands of the Greek archipelago and saw lots of small bays and islands that you simply can’t get to unless you have a boat. For most people, only the major islands can be visited, but we were really able to explore. That’s how I came to love the sea.” Later, the family bought a 60-foot Hatteras sportfisher, then a 22-metre wooden Ghibli, and then a 31-metre aluminium Baglietto, which was larger and faster than anything they’d owned previously and required a Captain and three crew. “She is very luxurious and beautiful, and in fact we still have her,” he says. When Vafias found himself with proceeds from his business successes, he first bought a Cigarette: a very stylish, if somewhat impractical boat for his part of the world. “I haven’t used her too much because of the weather and winds in the Aegean Sea. She’s not really suited to the local waters.” Finally, in 2009, Vafias was able to purchase a full-displacement yacht: the 47m Feadship X. It was just after the Lehman Brothers meltdown, and the yacht market was in free fall. “I was able to find a high-quality pedigree yacht 20-30 per cent cheaper than two years prior. She had been built to the highest specifications possible without any expense spared, so it was heavily accessorised with the best possible parts and components,” says Vafias. “From Easter to October, we took her out nearly every weekend to the nearby Greek islands.”  55 Nishii Bannenberg In 2012, with fortune still shining on his businesses, Vafias bought his dream boat: Southern Cross III. “For me, she is an iconic yacht designed by John Bannenberg who was a genius,” says Vafias. Vafias says, beyond her remarkable design status, she presents three unique advantages. “She has a deep draft which makes her extremely steady, even in side winds,” he says. “The disadvantage is that you can’t get her into very shallow locations, but with the winds in Greece and the surrounding seas of the Adriatic and Eastern Med, natural stability is an advantage.” Secondly, Vafias points to Bannenberg’s remarkable beamy design. “She has a tremendous beam of 12m for her length of 56m,” Vafias points out. “The actual feeling of spaciousness aboard comes from beam, not from length. So that’s a huge advantage. When you’re aboard, you feel it’s a much larger boat than it is.” Nishii Thirdly, he points to her interior volume: she’s over 800GT, which is rare in a 56-metre yacht. As one would expect from a ship owner and operator, Vafias’ company handles the management of the yachts. “If you understand yachts, have good engineers and buy yachts from good yards that have been well maintained, it’s not that difficult,” he says. Speaking to him, it’s eminently clear, Vafias is a man who just loves boats and the markets in which they trade. “I follow naval architecture and design as part of my work in shipping, so I’m up to speed with the latest ideas and concepts in hull design, engines and fuel efficiency,” he says. But he has yet to build his own; commission a design as iconic as that of his beloved 55 Nishii Bannenberg. “I’ve commissioned dozens of ships around the world, but I haven’t built a yacht,” he says. “I’m of the opinion that if you have a pedigree yacht from a very good yard, you can get great value and immediate delivery, which is better than waiting two or three years to build one from scratch. But, I’ll never say never.” This article and images originally appeared in Fraser yachting magazine