Doral Restructures Under Creditor Protection

Citing a slack market as a result of the global economic crisis, Grand-Mere, Quebec-based Doral International Inc. has filed for creditor protection and arranged for the Quebec City firm of Roy, Metivier, Roberge Inc. to act as its trustee.

“I don't have to tell you we are all experiencing a tremendously challenging period in the boating industry,” said Doral International Vice President, Denis Jutras. “Like many other companies in a number of industries, our business has been impacted by the global economic situation and that has forced us to revisit our business model. We need room to breathe as we restructure the company, so we have filed for protection against creditors as a step toward that process. We are currently developing a new business plan, and we will deliver this new strategic vision to the receiver by the end of October.”

In a letter to creditors dated October 2, 2009, Doral President Erwin Zecha said Doral faced a number of challenges beyond its operational control, including unpredictable currency fluctuations and the impacts of the global credit crisis.

“Many of our boats were exported to countries all over the world, but most of our production was destined for the American market,” wrote Zecha. “Many industries got side-swiped by the American sub-prime crisis, and the marine industry got hit harder than most. As a result, demand for luxury items in the US almost disappeared. Inventory financing for marine dealers was almost impossible to obtain and many dealers were not able to replenish their inventory. Consequently, there was very little need for the production of new boats. The demand from the American market, which represented such a large percentage of Doral's business, disappeared almost overnight.”

Doral stopped production at its Grand-Mere plant in early July to focus on different ways of restructuring the company, says Jutras. “We intend to recall about 100 employees in the next 10 days so we can resume production. We do have boats on order, and those customers will receive their boats as scheduled.”

Doral was one of the first Canadian boat builders to develop a significant international sales network, and that could become a significant factor in the company's future direction. Denis Jutras confirmed that virtually all of the boats presently on order are for overseas buyers. “With the lack of credit availability impacting our North American dealer network, international sales have become increasingly important to Doral, and presently approach 85 percent of our total production.”

Founded in 1972, Doral began exporting boats to American and European markets in 1988. Erwin Zecha acquired the company from French sailboat manufacturer Bateau Jeanneau in 1995.