Canoe Manufacturers Respond to Loss of Key Supplier - Outdoor Industry Association

Aug 21, 2013

Canoe Manufacturers Respond to Loss of Key Supplier

PolyOne Corporation, the sole manufacturer of Royalex, has announced the company will stop production of the material in April 2014. The loss of a single source supplier for a critical canoe hull construction material has raised concerns across the paddlesports industry.

Royalex is a lightweight, durable and relatively inexpensive material that has offered canoe manufacturers an attractive price point between rotomolded polyethylene boats and fiberglass, Kevlar and carbon fiber models. Royalex canoes are popular with whitewater paddlers and outfitters because the hulls can often be returned to their original shape after sustaining major dents after colliding with rocks.

“My first boat was fiberglass and it was more patch than boat toward the end of its life,” said Darren Bush, owner of Rutabaga Paddlesports of Madison, Wisc. “Royalex enabled a lot of people to not worry about damage and repairs. This is the end of an era.”

Since Royalex is expensive to manufacture, the material never gained traction beyond the canoe market. Many paddlesports executives in the industry understood their reliance on the material was risky.

“All businesses recognize the dangers of sole-sourced raw materials like Royalex sheet stock,” said Bill Kueper, vice president at Wenonah Canoe Inc. of Winona, Minn. “However, lacking the resources ourselves to develop alternatives, we became complacent.”

It is unknown whether PolyOne Corporation, which acquired the Royalex technology in its March 2013 acquisition of Spartech Corp., is seeking a buyer for the business. A former executive of Spartech and Uniroyal Inc., which introduced Royalex to canoe manufacturers in the early 1970s, said it’s unlikely anyone would buy the business given that more than 90 percent of the material is sold to canoe manufacturers.

“Rolayex is a difficult product to make, and once it’s vulcanized you can’t recycle it because of the mixture of different materials,” said Philip Karig, managing director of the St. Louis consulting firm Mathelin Bay Associates and former chief procurement officer for Spartech. “The canoe market may be too small, the manufacturing process too complicated and the growth prospects too few. When you put all those things together, you have to ask what someone would want with it.”

Anxiety over the future of Royalex increased in October 2012 when PolyOne proposed its acquisition of Spartech Corp., which in 2000 acquired the Royalex plant in Warsaw, Ind., from Uniroyal. A day after closing the deal in March 2013, PolyOne announced a mid-year price increase. In response paddlesports manufacturers raised their 2014 prices for Royalex boats by approximately $200, or 15 percent. On July 16, 2013, PolyOne announced it would close six Spartech plants to generate $25 million a year in pre-tax savings by 2015. The next day, representatives from PolyOne began calling canoe manufacturers to tell them that the Warsaw, Ind., plant will halt production of Royalex in April 2014.

Canoe manufacturers have been working ever since to secure sufficient Royalex sheets for 2014 model production, and many are assuming the material will not be available for 2015 models.

“Johnson Outdoor Inc. will be securing a supply of Royalex sheet for the 2014 season, and, while supply may be limited, we do not anticipate shortages,” said Bill Kelly, group vice president of Johnson Outdoors Gear and Watercraft, whose paddlesport brand portfolio includes Old Town Canoe, one of the earliest brands to popularize Royalex canoes. “We are working with our sales team to develop orders and forecasts so that we can best meet consumer demand.”

Johnson Outdoors is researching options for replacing Royalex by 2015. Kelly said Old Town is better positioned than some of its competitors because the company has developed three other plastics materials, including a single layer polyethylene that can be used with thermoforming manufacturing processes. While less expensive that Royalex, these materials are heavier and do not retain their shape nearly as well.

John Durrua, owner of Jersey Paddler in Brick, N.J., estimates 80 percent of the canoes sold at Jersey Paddler are made of Royalex.  Durrua notes that canoes make up just 8 percent of his paddlesport category sales. “It will put a small dent in our business, but these brand executives are pretty smart and I’m sure they can come up with another material.”

In 2005, the surf industry faced a similar situation when Clark Form, the single source for surfboard blanks, closed. While there was a period of uncertainty, some surf industry observers credit the crisis with the development of expanded polystyrene, or EPS, surfboards.

At Wenonah, where almost 50 percent of the brand’s canoe models are made of Royalex, Kueper said finding alternatives will be costly. “It’s safe to say nothing exists today that can replace Royalex in its performance, price and using the identical manufacturing process and assets,” said Kueper, a former 3M chemist considered by many as a leading authority on canoe materials. “Alternatives will require new materials handling and molding technologies that do not presently exist in our factories. Lacking a drop-in or turn-key alternative, a replacement or substitute material offering a performance spectrum similar to Royalex will require capital investment and team training.”

The loss of Royalex will ripple through the paddlesports industry for several years. Smaller canoe brands that are unable to order a sufficient amount of Royalex may face hard business decisions.

“There are lots of people who make stuff that is big and stiff and durable,” said Bush. “Somebody will come up with something.”

Related reading:
Merger will sink canoe material

U.S. surfboard makers thrive in choppy waters

The River Chasers, Flowing Water Press. This 398-page book by Susan L. Taft traces the origins of the American whitewater community, including a fascinating discussion of how Uniroyal pioneered use of Royalex canoes in the early 1970s.