By Karin Gelschus
Exponential growth has all but forced Sportech to move to a bigger facility next month. Last year the OEM plastics thermoformer and powersports aftermarket company experienced record-breaking sales and this year looks to reach nearly triple-digit revenue growth.
Sportech President Chris Carlson says diverse products and enthused employees, including a creative design team, has led the Elk River, Minn.-based company to considerable sales increases. Revenues are expected to remain strong as the new facility is projected to heighten Sportech’s manufacturing capabilities.
Three different buildings totaling about 60,000 square feet is not enough room to keep up with the expanding company. Due solely to growth rate, Sportech will move into one building that’s 96,000 square feet in October.
“We are absolutely out of space,” Carlson said. “We built our first building here in 1998 and that was 10,000 square feet with one employee. About every two years, we’ve been adding on or building new buildings.”
Having three separate facilities isn’t the most efficient use of space and Carlson said by consolidating them “it’s really going to improve manufacturing capacity and capabilities, so we can’t get into (the building) fast enough.”
Originally only a snowmobile aftermarket company, Sportech has broadened its product lineup extensively and continues to enter new markets. The company’s diversification has proved profitable, especially in the past couple years.
Last year’s revenues were record breaking, and Carlson says this year the company is anticipated to reach a 70-80 percent increase over last year. The success, however, can’t be attributed to just one or two segments.
“We’re seeing good growth across the board,” Carlson noted. “The utility vehicle market is real strong, and our motorcycle business is way up over last year. Those are the primary drivers.”
Carlson says the company’s success can be attributed to a combination of things, and some of Sportech’s characteristics are making a tremendous difference in its rate of success.
Sportech manufactures a variety of products, including windshields, cab components, protective guards, visors, body panels and other components for motorcycles, snowmobiles, ATVs and UTVs.
The company also produces aftermarket products, both in private label form and products, that carry the Sportech brand. But this has become a much smaller piece of its overall revenue.
The company originated as an aftermarket supplier but through the years has transitioned into an OEM supplier. Today aftermarket products account for only about 15 percent of Sportech’s business. One particular aftermarket product group that remains strong is its line of sport bike windscreens.
Sportech is looking to broaden its product lineup in a variety of industries. Another emerging market for the company is the golf cart and electric vehicle industry, where it’s offering complete molded plastic cab systems similar to what Sportech currently produces for UTVs.
Diversifying the company’s product line is key to its success, notes Carlson. Starting out strictly as an accessory snowmobile manufacturer, the company discovered the need early on to expand its product line.
“We’re continuing to diversify to take the seasonality out completely. We’re not there totally,” Carlson said. “After many years of poor snowfall across the Midwest, the snowmobile industry really took a hit and had we just stayed in snow, it would have been tough. Although snowmobile products represent a small part of our overall revenues today, we are still very passionate about snowmobiling and the snowmobiling industry. We look forward to the industry booming again when good snow conditions inevitably return.
“We’re more solid, stable if we can spread our business out over a larger group of customers in multiple areas,” Carlson said. “We are very fortunate to be working with some of the very best companies in the powersports industry who are leading the industry with innovative vehicles that are selling very well right now. It’s a real blessing to be working with the players in our industry that are leading the charge.”
Many of Sportech’s products don’t have a long life cycle because of ever changing developments, but that has worked toward Sportech’s advantage.
“The chassis change, the vehicles change, so we’re continuously forced to reinvent the wheel,” he said. “It can be a good and bad deal. If your designs are fresh, innovative, strong, then this is good. But the minute we fall off the innovation curve, we’re in big trouble. We willingly take that challenge, and it’s been working for us.”
A key factor in that success is the company’s ability to develop and design new products.
“We’ve really built the company around our strengths in design and innovative product development,” he said, “and as a result we’ve tried to avoid the commodity manufacturing side of our industry. I’ve always said that I’d rather have a root canal than work on some of the less exciting, commodity-type business in our industry.”
Design is where Sportech invested considerably, and the design team can take a large portion of credit for the success of the company’s products.
“We have some of the most creative, innovative designers in the industry,” he said. “They’re very passionate about our industry and the vehicles they’re working on. It really helps when they come to work, and they’re excited.”
When Sportech began to grow, the people hired on tended to share the same values and had an interest and appreciation for the powersports industry. Carlson says they tried hard to cultivate a culture with those traits.
“We’re very proud of the culture here,” he added. “One of the things our customers comment about when they walk through is the people really appear to be enjoying themselves. There’s a spirit of happiness or joy within the company. It’s not easy to maintain that, and we’ve worked very, very hard at it.”
To sustain the positive atmosphere, the company holds a variety of team-building events throughout the year, including company “fun days” where they frequently get together to ride motorcycles, snowmobiles or ATVs. Carlson notes that has become more difficult as the company has grown to about 100 employees.
“Not everyone can partake, but we really encourage participation from our whole team,” he said. “In the past the whole company would ride together; now we’ve switched to holding events for specific departments within the company. I think it’s critical we try to keep it fun, and I hope our team appreciates the special events. We’ve tried to create a culture that’s driven by passion and fueled by interest for powersports.”
Sportech stays close to its roots as the enthusiasm for snowmobiling has never diminished. Carlson notes that Sportech has a snocross racing team that competes all over the Midwest.
“We take racing seriously; it amazes me how enthused and involved our employees get with the race team,” he said. “We have lots of employees at the races cheering on the team and helping out. It’s great to see the passion for our industry in our people. I believe that passion shows up in the products we produce here everyday.”
Copyright 2008 Powersports Business