Mattracks Treads Overseas – December 25, 2006

Truck and ATV rubber track conversion system manufacturer Mattracks, Inc. is increasing its manufacturing capacity with a $12 million, 500,000-square-foot plant in China.
The expansion into China will help the company better serve its rapidly growing international market and support a number of new corporate objectives, including two new, unannounced recreational vehicles.
The northern Minnesota-based company’s new, sprawling campus will be constructed in the Zhejiang Province of China and will include office space and a cafeteria and housing for more than 250 workers.
Initial renderings also show an on-site test track facility. “This is an expansion, not relocation,” Mattracks General Manager Dean Gorder said. “All of our current product lines will still continue to be built in our existing facility in Minnesota … the only things built in China will be new additions to our product lineup.”
The Chinese expansion will be finished by July and will be accompanied by additional hiring at the company’s Karlstad, Minn., facility, which currently employs more than 50 workers.
Gorder said the company chose to build the new plant in China in order to achieve lower manufacturing costs for future products.
“In order to build them and be at the right price point, it was far easier to achieve the price points by manufacturing in China, than in the U.S.,” he said.
Mattracks Marketing Manager Del Wright said the company also hopes to open up more of an international sales market with the expansion. Mattracks products are currently available through approximately 1,500 dealers.
ATV track systems are generally sold through powersports dealers. The truck systems are available through a variety of outlets, including specialty equipment dealers, specialty shops and, in some locations, equipment rental shops.
“Expanding Mattracks and establishing a presence in China creates tremendous opportunities for us to diversify our product offerings and opens the door to several of the world’s largest emerging industrial markets,” Gorder said in a press release. “China itself is a huge potential market for Mattracks products, and we anticipate we will add many more to the group of countries we serve today.”
In addition, 2006 was the first year the company’s international sales surpassed domestic sales. The company does not foresee this trend reversing anytime in the future.
Initial reports said the company planned to bolster its Minnesota staff by 20 percent, but Gorder said recent developments would probably result in an even greater increase to accommodate the manufacture of “highly proprietary items” that will be shipped to the Chinese facility. He added that the hiring would occur over a 14- to 18-month period.
Mattracks will keep its corporate headquarters in Minnesota, which is also home to the company’s research, development and military applications projects.
Mattracks’ Chinese management team will be comprised of westerners, Gorder said, and some have already been hired and trained in preparation.
“A western manufacturing philosophy is being implemented into that facility with the specific goal of exceeding all quality expectations of any product that’s ever come out of China,” he said.
Sales of the company’s ATV and truck product lines, which include 35 different track systems, have been experiencing double-digit growth, which Gorder said is continuing to gain momentum. The ATV track systems, sold under the LiteFoot brand, are the company’s biggest selling product, by volume. Privately held Mattracks was founded in 1994 and the company’s first ATV track system was introduced in 2002. psb