Rising material costs tugging at snowmobile supplier
October 3, 2011
Filed under Features
Stud Boy traction products reacts to expenses
By Dave McMahon
The rising costs of raw materials continues to pack a wallop that one snowmobile aftermarket manufacturer is finding to be a challenge to overcome.
Michigan-based Stud Boy, which makes traction products, has seen the cost of its products’ main components — including steel, carbide and silver solder — continue to increase.
“Last year we started seeing prices creeping up and it’s been a consistent climb of rising prices,” Stud Boy owner Ron Pattyn told Powersports Business during the Hay Days snowmobile season kickoff event in September. “There’s been no relief whatsoever — just steady price increases.
“Some of the price increases have been pretty substantial, like two to three times. Silver — the silver solder market — has gone crazy high, just like gold.”
Pattyn said that with about 80 percent of the carbide in the world being sourced through China, there’s little reason to predict a price reduction is on its way.
“They keep the price where they want it, and they’ve reduced the export levels, too,” said Pattyn, whose company also supplies wear bars and studs to Yamaha and Arctic Cat. “So they’ve created a supply and demand problem, and that drives the prices up as high they can. The product can be used in steel and other infrastructure items, so they’ve been using much of it locally and not wanting to export it like they used to.”
Wear bars and studs made by Stud Boys include carbide inserts, and the silver solder is used to attach the carbide to the wear bars themselves.
“So our product is pretty much comprised of steel, the alloy for brazing and, of course, the carbide for the contact part of the product. We’ve been seeing pretty steep price increases in all of those areas,” Pattyn said.
The company’s rising expenses have not hampered sales growth. What measures has Pattyn taken to soften the blow caused by the increased cost of raw materials?
“We’ve had to work harder on our processes to keep up with the cost increases,” Pattyn said. “We haven’t been able to pass them on nearly as much as we like, so we’ve been forced to get better at what we do in house. That holds our margins for us.”
Stud Boy’s production line has become more efficient because of the economic factors brought on by the supply chain.
“The utilization of time is the important thing,” Pattyn said. “Get our throughput and keep the cost down that way. That’s the single biggest thing. We’ve automated some, and that certainly helps. We’re smart at what we do. It’s helped a lot this year because our distributors have stepped up for earlier preseason orders, so we’re able to do bigger runs in the shop. Instead of changing the equipment over constantly, we’re making parts.”