Surfboard industry back afloat after scare
By Greg Wiles
Advertiser Staff Writer
Maybe the surfing industry's so-called Black Monday wasn't so dark after all.
A year after the sudden shuttering of Clark Foam, the world's biggest maker of polyurethane foam used in surfboards, board makers are mostly back to normal.
Some of the predictions of market upheavals came to pass, but others say the surfboard business has emerged in a better position and that Clark Foam's sudden closure on Dec. 5, 2005 may prove to be pivotal in getting surfers to move beyond surfboards built with technology adopted 50 years ago.
"I think everybody agrees this was a good thing for the industry," said Jim Richardson, founder of Waialua-based Surflight Hawaii, and a University of Hawai'i-Manoa professor of management and industrial relations. "This has opened up people's eyes and minds."
Hawai'i shapers scrambled to get foam blanks after Clark Foam, a Laguna Nigel, Calif., company, closed, saying it was terminating production forever. Company owner Gordon "Grubby" Clark faxed out a rambling seven-page letter hinting that his use of toxic chemicals led to ongoing problems with the Environmental Protection Agency. A widow of one of his workers later sued Clark Foam, saying her husband died because of chemical exposure at the factory.
At the time of its closure, Clark Foam held an almost monopoly status over the polyurethane foam used in most surfboards produced in the United States. Surfboard builders said Clark offered the broadest product line, good pricing and unparalleled service, helping him dominate the foam business on the Mainland and in Hawai'i.
The closure, though, sent board builders scrambling to obtain what was left of Clark's inventory. There were predictions that some of Hawai'i's surfboard builders might be forced out of business and others sidelined. Others predicted market upheaval until other foam makers expanded operations or new companies came on stream. There were predictions of higher surfboard prices.
"The monopoly thing is never good for any industry," said Otis Schaper, a long-time Hawai'i surfboard shaper and glasser who owns The Factory LLC, one of the biggest surfboard glassing companies in the state.
"Guys that weren't strong at the time suffered. People were hurt."
RAIN SLOWS BUSINESS
The industry also wasn't helped by 40 days of rain in the spring which damped sales and by surfers who pulled back on new board purchases until they were confident the new foam makers were up to snuff.
Now it appears the industry has rebounded after weathering those challenges. While there is concern that Japanese buying from Hawai'i's lauded board- makers has been off, the local market has come back.
"It's ancient history a year later," said Steve Cranston, managing director in Hawai'i for Surftech, a Northern California company that wasn't hurt by Clark Foam's demise because it uses epoxy foam made in Asia. "The crisis was pretty short-term."
That's welcome news for an industry that had been enjoying a pretty good ride of its own in recent years. There are now more than 2.3 million surfers in the United States, according to Marie Case of Board-Trac Inc., a Southern California research firm that specializes in marketing data for extreme sports.
She said the growth has a lot to do with demographics as more teens in Generation Y adopt the sport and more surfers remain active as they get older. "Blue Crush," a 2002 summer movie hit, also played a role in the number of women surfers spiking, Case said. About one-third of all surfers are now women, she said.
"With more people surfing and more people in the sport longer, it's growing," Case said. "It's also becoming a family sport."
SALES INCREASE
That translates into board sales. In 2004, the last year Board-Trac has sales data for, U.S. surfers spent about $81 million buying 347,000 surfboards and bodyboards. Channel Islands, the Santa Barbara, Calif., surfboard maker whose team includes world champion Kelly Slater, was the most popular board manufacturer among surfers.
Hawai'i's Town & Country and Hawaiian Islands Creations were also ranked among the top 10 surfboard brands in Board-Trac research. Surftech also ranked among the top tier.
While the local market for sales to Japanese visitors remains slow because of lower Japanese tourism and yen-dollar exchange rates, the local market is still benefiting from Hawai'i unemployment rates that are among the lowest in the U.S.
Local shapers are hoping to see wholesale orders for Japan pick up after some bulk buyers there diverted orders to Australia last year because of worries about availability of U.S. boards with Clark Foam's departure.
But the void left by Clark Foam has been filled by a number of foam companies, including those from Australia, China, South Africa, Mexico and Brazil. So much so that Surflight's Richardson said a glut exists right now, and prices have come down from earlier this year.
He said the market is more accepting of other technologies and giving a look to so-called epoxy boards that are made using different types of foam and resin. Some board builders said the adoption of newer materials was hindered in some respects because Clark Foam's pricing, service and distribution made it easy for them to stay with the polyurethane foam and polyester resin technology adopted during the 1950s.
"We're going to wind up with a better variety of surfboards with better quality, too," said Tim Mock, general manager of retail for Local Motion, which has five stores on O'ahu.
EXOTIC TECHNOLOGIES
Surflight both builds boards using the new, tougher materials, as well as distributes the extruded polystyrene blanks for others wishing to build epoxy boards. "It's been pretty good," Richardson said.
Other exotic technologies, including pricey carbon-fiber hollow boards, are also receiving a look. Surftech, which produces epoxy boards in Thailand that are replicas of famous shapers' best designs, also received a boost. There's even foam developed to protect nuclear weapons electronics that's being examined.
"It did force people to open their minds to other technologies," said Surftech's Cranston. "The whole market is much more diversified."
Surfers also seem more educated about materials, often requesting polyurethane foam from US Blanks or KingMac Foam, two companies that cranked up production after Clark exited, said Peter Thorne, who manages Schaper's factory and its Web site that sells Hawai'i-made boards to surfers in different countries.
Schaper said people driven out of the business by the blank shortage earlier this year could now jump back in and find work.
"My perception is the market has come storming back, and everyone is really busy."
Reach Greg Wiles at gwiles@honoluluadvertiser.com.