Agreement launches Larson Boat sales in Chinese market
Product line includes those made at Little Falls plant
By Terry Lehrke, News Editor
When Al Kuebelbeck came before the Little Falls City Council Monday to ask for an extension on a state grant agreement, he came bearing good news.
Larson and Triumph boats will be part of an expanded joint venture agreement between J&D Acquisitions LLC, its parent company, and a Chinese company called Poly Technologies Inc., thus opening up the Chinese market for boat sales. Larson and Triumph boats are both manufactured in Little Falls.
Two years ago, the Initiative Foundation, the Department of Employment and Economic Development (DEED) Investment Fund and the Economic Development Authority of the city of Little Falls filled a $1.8 million gap in a complex $7.4 million package to keep J&D Acquisitions LLC from bankruptcy. As part of its agreement, Larson Boats had to keep the 171 employees it had at the time, and add an additional 79 employees within two years.
Before the economic downturn, Larson Boats employed more than 800 workers.
Kuebelbeck, president of Larson Boats in Little Falls, told the Council that over the past two years, the company’s job projections fell short due to economic factors beyond its control. To-date, only 34 jobs have been created, when 79 were promised.
In asking for a year’s extension to fulfill that part of the agreement, Kuebelbeck told the Council that looking ahead into the new year, the company was seeing positive signs that the business will grow and allow it to add the 45 jobs.
“Larson Boats has been very successful in acquiring new dealers,” he said. “In the past year, we’ve added 140 new dealers to the Larson family. Dealer inventories are at an all-time low, and they desperately need product.”
He said the market and economy are showing signs of stabilizing.
“Statistics show a 2.8 percent annual growth rate for the last three months of last year — the fastest growth seen in 2011,” Kuebelbeck said. “Boat registrations are showing marked improvement over last year.”
He said the last quarter of 2011 reflected a 25 percent increase over the prior year, and that increase had continued into January and February.
Added to that, the unemployment rate is at its lowest since February 2009, at 8.5 percent, and retail and wholesale financing had started to improve for customers and dealers.
This past year, Kuebelbeck said Larson Boats introduced 10 new models, and a new series of fishing boats using the VEC closed mold process, which will compete with the market in international sales.
The facility to produce Triumph Boats, which Kuebelbeck called “the world’s toughest boat,” was moved to Little Falls. That brand, he said, has now been positioned properly and marketing plans are in place for the Midwest fishing market in addition to the Canadian market.
“Right now, we’re developing new models as we speak to address these markets,” said Kuebelbeck.
Not only are sales up 19 percent ahead of last year in international sales, but Kuebelbeck said the projection is to improve as the company moves along.
The China market opening up presents “a huge opportunity for VEC and Triumph products,” said Kuebelbeck, both products presently being developed in the Little Falls facility
“Poly Technologies is a huge conglomerate. It’s the first company to give us the opportunity to partner over there in this new market,” said Kuebelbeck.
In addition to Larson and Triumph Boats, the agreement with Poly Technologies Inc., includes Carver Yachts and Striper boats, all products of J&D Acquisitions LLC.
These products are currently on display at a new distribution center and offices at the Serenity Marina and Yacht Club in Sanya, China.
The Council granted Larson Boats the extension Kuebelbeck requested.