Boat Business Making Waves
Posted on: Monday, 20 March 2006, 21:00 CST
By Rebecca Ferrar, The Knoxville News-Sentinel, Tenn.
Mar. 19--Malibu Boats West Inc. has launched a $2.2 million expansion to meet heavy demand for its ski boats, the latest example of boating industry growth in East Tennessee.
Construction is under way on a 52,000-square-foot addition to its Loudon plant that will give the company a total of about 150,000 square feet when it is completed by May 1.
The company also is adding machine shop capabilities to bring more production in-house.
"We're trying to meet the demand of the customers," said John Sisson, vice president of operations. "We're seeing an increase at boat shows this season. A boat dealer in Atlanta set a record one weekend selling 45 Malibus. We're setting records at all kinds of shows."
Malibu's growth follows the January announcement that Cobalt Yachts would become the latest local boatmaker with a yacht manufacturing plant in Monroe County. The plant will employ 350 workers at an 80-acre site and produce more than 200 boats a year.
MasterCraft, also in Monroe County, projects it will have $200 million in sales by 2008 and plans to "continue aggressive new product introductions." The company plans to have three new products on the market by May.
More than a dozen companies build boats in East Tennessee, and the industry leader -- Knoxville-based Brunswick Boat Group, which posted $2.8 billion in 2005 sales -- continues to fill out its line of offerings by purchasing other boat companies nationwide.
Its Sea Ray division is headquartered in Knoxville and operates three area plants. Sea Ray recently won a J.D. Power and Associates award for customer satisfaction in the "Express Cruisers" category for its 24- to 33-foot family boats with sleeping, galley and toilet amenities.
Boating is a growing avocation in East Tennessee, judging from the latest statistics from the National Marine Manufacturers Association.
Boat sales in Tennessee in 2004 were up 11.9 percent to $305.3 million, placing the state 21st in the nation, said Kelly Kaylor, spokeswoman for the association. Tennessee is 18th for the number of registered boats -- 261,465 in 2004, she said.
"There's a strong population base with all the lakes here," said Anne Smith, assistant professor of the Department of Management at the University of Tennessee.
Her class studied the local boating industry last year, and she said the area's work force contributes to manufacturing growth.
"I'm sure we've got the skill level here that supports that industry," Smith said. "It's an industry people are very knowledgeable about. There are suppliers to the boating industry here."
Thom Dammrich, president of the National Marine Manufacturers Association, agreed, saying the "quality of the work force and the quality of life" contributes to the impact of the boating industry in this region.
"You've got people there who are interested in boating, and boating manufacturers are passionate boaters themselves," Dammrich said.
He said the Tennessee River is "just spectacular," and boat manufacturers tend to locate near water and near large boating populations.
At the new Malibu expansion, Sisson expects to hire another 25 to 30 employees on top of the 200 now employed at the plant.
Malibu also will build a machine shop to make specialty parts that are now being outsourced in California and other states.
"We're going to have new production on some unique parts," Sisson said. "We're going to put our own machine shop in. It will bring a lot of things in-house that we can make ourselves instead of outsourcing. I think we can do a lot better and easier and control our inventory without outsourcing."
Currently, the plant makes about 1,700 boats a year. With the expansion, the company will produce another 300 to 500 boats annually.
The plant will launch three new boat models from Loudon's expanded facilities -- Response LXI, 245 XTI and Vride -- all wake board and ski boats.
The company's corporate headquarters are in Merced, Calif.
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Source: The Knoxville News-Sentinel
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