China Production ... what else can happen.



Am I supposed to feel sorry for them? To me that just seems like the risk you run when you choose to move your manufacturing to a developing country.


#1 Fri, 12/12/2008 - 12:01pm


Yeah, long history of this sort of thing happening to companies doing business in China along with their total disregard of copyright/patent law. To not expect this sort of treatment is short sighted. Be interesting to see how it plays out in the end.


#2 Fri, 12/12/2008 - 12:06pm


What a raw deal for Epic to have to wade through this kind of sewage.
Sounds like Flying Eagle could use a little regime change in thier upper management.


#3 Fri, 12/12/2008 - 12:33pm


Maybe their upper management can be volunteered for some organ donations.


#4 Fri, 12/12/2008 - 12:35pm


Do they really need to put all that on their website and explain how they are suing this other company etc? Sounds kinda just like they are trying to badmouth flying eagle almost. I would have been perfectly content to read just "epic opens new factory in china" without getting the whole sad story etc...


#5 Fri, 12/12/2008 - 12:54pm


It might sound mean

But Nb 1376 is right ,these guys dramatize ,last time they did it the boats just got more expensive.You would think moving to china would make the boats much cheaper (and it does ), but not to the customers it seems.
Skis and outriggers are work intensive and the material for top spec 21lb carbon boat only costs 400$ the rest is work cca 35-40 working hours, even less in serial production with multiple molds,so do the math.(and think of super cheap chinese labor this years average salary in boatbilding in china cca 0,7-1 $ an hour)

These guys are probably the single and most responsible for price of Surfskis to skyrocket followed by Outriggers ,justifying their cost on bogus claim of record100.000.-US V10 development program .
As they say, if the lie is repeated over and over again in the end becomes a fact.

So i don't feel sorry for them .


#6 Fri, 12/12/2008 - 1:42pm


If you can't feel compassion for a small business owner on the receiving end of extortion, I feel sorry for you. Personally, I'm grateful to Epic for posting this information; it might help another boat builder or small business owner to avoid this kind of abuse.

The lesson here is that any time you enter into a busines partnership, whether it be with a company or individual, no matter the country, plan for dissolution at the outset. Have the terms for separation clearly spelled out in contractual form, identify property rights plainly, and make sure the contract is legally enforceable in the country where the assets are to be located, prior to signing the agreement.

Sorry, Epic, but the legal system in China is not the same as we enjoy under the Stars and Stripes. Property rights and human rights are the foundations for a successful democracy, and China is far short of being even remotely considered a democracy. I fear Epic will lose its lawsuit without some well placed... monetary incentives.

Since Epic is the industry leader in the surfski world (at least to my knowledge), it's unlikely competition will force pricing parity. As a result, it is the paddlers that will eventually pay as Epic will attempt to recoup losses through increased prices, and smaller competitors will likely match any price increase to widen margins (capitalism 101).

Feel sorry for them now?


#7 Fri, 12/12/2008 - 1:57pm


So what is Epic then, a small business or the industry leader?

Small would seem to be a relative term if you are bigger than all you competitors.


#8 Fri, 12/12/2008 - 1:58pm


From my perspective, if you lumped the entire surfski and OC-1 industry together, it would still be a small business. Unless you're bringing in more than $350MM annually in sales, you are a small business. I doubt the entire industry grosses that much.

Don't confuse industry leader with small business. You can be the big fish in a small pond and still be a small fish...


#9 Fri, 12/12/2008 - 2:07pm


Just did a little looking around online.

Fenn Mako Elite (which I read are produced in England? anyone confirm this?) Fiberglass Model sells for $1975 and a Vacuum Bagged Carbon Model (approx. 23lbs) sells for $3400.

Epic V10 Value (37 lbs) sells at $1895. Epic V10 Performance (33 lbs) sells at $2395. Epic V10 Ultra (25 lbs) sells at $3395 and Epic V10 Elite (21 lbs) sells at $4395.

If its true that Fenn's factory is in England where I imagine the labor is somewhat more expensive than China than where are the savings getting passed onto us? Of course I could be completely wrong...

The outrigger comparison would be that according to Kamanu's website the Kainalu (every boat handmade in Hawaii) sells for between $3400 to $3900 depending on what layup you order (weights between about 19 and 23 lbs). Not completely sure on Pueo's pricing but I believe it is very similar if not the same.

Copied and pasted from a dealers website, are the prices for the China made canoes.
Pegasus (22 lbs) $3400
Zephyr (24 lbs) $3200

To be honest I don't see that much benefit to us in getting a boat from China except for no wait time. I would rather wait and get my hand layed up boat from Hawaii (which I did and I'm completely stoked).


#10 Fri, 12/12/2008 - 2:33pm


Fenn (england ,south africa)used to be cheaper but the prices creept up with aperance of V10 ,why should Fenn sell his boats for less if he has a better product.
Outriggers used to be much cheaper but it the end if skis can sell for
that kind of money it is only right for the outriggers to do the same.

The price of boats will probably continue to rise as the labor cost grew up to 40% per year in china .But for now that is still around 1$ per hour so manufactures make tons of money on china imports.


#11 Fri, 12/12/2008 - 2:46pm


Fenn Skis are made in South Africa, which is where the Epic Skis were made before the China move. Fenns are not very expensive in South Africa, but the costs associated with bringing them to the US for sale make them expensive. I have owned both brands as well as a HUKI produced in the US, and all the prices seem close for comparable layups.


#12 Fri, 12/12/2008 - 2:53pm


cost of transport is peanuts(200$ max) ,its the 50+% dealer overhead that gets you those prices


#13 Fri, 12/12/2008 - 3:02pm


Don't forget import tax, which is a biggie for S. African production (it wasn't part of NAFTA).


#14 Fri, 12/12/2008 - 3:35pm



I believe this is good info to get out, and i'm glad I was able to read about it, but at the same time, I'm not really sure this is the kind of stuff you should post on your website. It is a pretty raw deal though.

Canoemaker-
just playing devils advocate, not trying to undermine you, but $400 sounds a kinda low for building a 21 lb. carbon composite OC1.


#16 Fri, 12/12/2008 - 7:35pm


If he can really build and sell one for that price, then I want to order 10 of them...


#17 Fri, 12/12/2008 - 7:43pm


not sure where the $400 price came from...

but if that's the case, a sit inside canoe with rudder is much cheaper to build than a sit on top canoe with rudder


#18 Fri, 12/12/2008 - 8:03pm


Material is costed by weight -- makes no difference to materials cost if the sit-on weighs the same as the Va a, but the difference in the labour content makes the sit-on cheaper to produce. Especially so if semiskilled labour from China or South Africa is used to make the minimal number of parts that constitute a sit-on.
Keeping the weight low means prepping and painting, so this is where cheap labour really begins to tell.... and I do know what I am talking about here since I set up and ran a composites manufacturing facility and paint shop in South Africa (see High tech Automotive manufacturer of Superformance Replicars)
I also know a bit about Kieth Fenn's manufacturing facility and am damn sure that his semiskilled labour would never complete a Va a in less time than they can pop out a sit-on


#19 Fri, 12/12/2008 - 8:33pm


jc9_0-

The $400 came from a materials cost estimate by canoemaker in one of his posts.


#20 Fri, 12/12/2008 - 8:43pm


thanks Kino,

i always get canoemaker, wakabonez and goodwaka confused. my bad.


#21 Fri, 12/12/2008 - 9:31pm


We've built cca 6000+ top spec kevlar and carbon ,kayaks and canoes in our company and belive me the material itself doesn't cost much more than 400$ for the boat,the rest is work ,and after that you add transport and huge margins for dealers.Hawaii might have more expensive material cost due to remote location but mainland US or China the cost of the material should be in that ballpark.

The boat price from my workshop trough the dealer doubles for the customer.and the dealer earns 2-3 times more on the boat that i do.

Like Good waka said , the fact it is a sit on top only makes it cheaper
as there is less parts and much less outfitting to be done
And if the boat is painted to be realy light like some that aren't gelcoated ,that burns hours ,more hours than building the boat itself and wouldn't be done in US or Europe for any reasonable serial production + now we can only use water based paints that are pain in the ass to work with compared to the old systems.


#22 Fri, 12/12/2008 - 10:09pm


I echo dmehlings compassion and think that it is a good thing that onnapaddlae bought this to our attention.

This can happen to Outrigger Companies too.
And heck business is about making a profit. what are you beefing about.
If you want semantics break down the price of a big mac. there is a lot more profit being made in that (%) than in a ski or outrigger.
Why can't hard working boat builders make a buck.
The OC1 produced are a great design otherwise people wouldn't buy them. The same applies to Epic.
Epic has made an effort to appear transparent. They are keeping those, that would like to be informed...up to speed.

They probable made commitments with dates. If they are unable to make the new factory happen on time... then those that have orders...are aware of the situation.

A hybrid paddle has sweet stuff all carbon fiber yet is around one tenth of the price of an OC1.
Is there a beef about paddle makers making a profit. Or is the beef that things are being made in China.


#23 Fri, 12/12/2008 - 11:00pm


Canoemaker, your $400.00 material cost is way off. Now I am speaking of an OC-1 and perhaps your cost is based on a surf ski. My direct cost is significantly higher, labor excluded. I hope you all consider the indirect cost to manufacturing these parts, particularly if you are doing it legit in California. All of the shop overhead, insurance and such are really high. Add in part development and tooling cost and prices start climbing. That cost has to be added in too, we can't just eat it. My canoes sale price is @ 18% higher than it was 10 years ago, I think that is extremely reasonable. Years ago I had a talk with our accountant in reguards to pricing, I was shocked when he told me that these canoes should be at least double. He was looking at it compared to many other retail items. I told him that my customer base simply could not pay that, and I still don't think they could! I am glad that my fellow builders manufacturing abroad are making a better margin, they deserve it. I wish they would support domestic manufacturing and its benefits to the US economy, but understand that they can't.

mahalo
Tiger


#24 Sat, 12/13/2008 - 5:33am


Aloha Tiger,

That's exactly the kind of feedback I was hoping for here.

I used to work for a local manufacturer here in Hawaii and $400 is not even close to being a fair estimate for materials cost. I would say that might be closer to a 1/4 of the actual cost, if even that. People deserve to have that kind of info so that those manufacturers who are working hard and putting out boats at a loss to them are not unfairly portrayed.


#25 Sat, 12/13/2008 - 7:13am


I just built a couple of skis and similar sized unlimited class kayaks ,and accounted all the material use and came up with round 360Eur which is cca 430 $ for a 10kg carbon boat and have to say that some of the boats left the shop for 1200Eur to the dealers which is round 1500$ for full carbon boat to the dealer which sells to customer for 2800$.So ither i am making some boats for material cost alone or you are over paying the materials.
And have to say that some of my competitors are delivering boats to end customers for 1500$ in full 12kg kevlar-carbon or even 100$ or so less for smaller 9kg full carbon boats .And we still all earn some on our boats.
So if you are paying much more than 450$ you are seriously being riped off in material cost and if its like Kino said 3x times more it has to be at least in golden boxes and pails.
Indirect cost are not included in material costs.


#26 Sat, 12/13/2008 - 10:18am


Remember, I am building canoes. There is additional cost associated with the internal structure of the canoe, the iako and the ama. Not to mention lamination schedule, we may not be comparing equally. For that matter I have no idea what materials cost where you build. Where do you you build? I sell direct to the customer so I can understand that you have a wholesale cost, there for less than retail. With all that in mind I think you can say that canoes are a bargain when compared to lightweight surf skis, no matter where they are built. I won't go into detail about pricing and cost, there is no need. We all build in different areas, have different overhead, different material costs and such. I feel that i give my customers a quality canoe, at a fair price, and on a reasonable build schedule.

Tiger


#27 Sat, 12/13/2008 - 2:44pm


Do you guys builders have websites where we can see pics of your canoes ? Or even just pic galleries somewhere on the net...


#28 Sat, 12/13/2008 - 6:01pm


http://www.tigercanoe.com/index.htm


#29 Sat, 12/13/2008 - 11:42pm


I see a pic of a Pahoa sit on.... is this not the same infamous sit-on, a product of the China based Hypr show?

Exactly where the difference between Hawaii and US economy exists is hard to understand, so materials and labour costing pretty much boils down to an economy of scale issue..... that is if the whole debate centres about a surf ski type paddling craft.

On the other hand, if costing applies to a proper outrigger canoe then it should be easy to understand why there is a big difference.


#30 Sun, 12/14/2008 - 10:00am


I see a pic of a Pahoa sit on…. is this not the same infamous sit-on, a product of the China based Hypr show?

HYPR does make a Pahoa based on Tiger's design and has the name, just as some of the other HYPR models are (hull only) copies of other well-known designs (i.e. Vantage, Hokulea [Polaris] Holo Nui [Kaimana], Makia). The ama, upper decks and cockpits are the same for all the HYPR made ones and not like the original manufactured ones.

From the http://www.hypr.us/hypr/index.php homepage:

Besides our own designs, for Outrigger Canoes we partnered with Steve Blyth (Wilder), Tiger (Tiger Canoes) and John Puakea (Kaku Designs) to offer a full portfolio of canoes for every body type, water conditions and paddling style.


#31 Sun, 12/14/2008 - 9:56pm


Damn rip-off artists......thinking about the situation brings to mind the thought that when anything is reduced to status of a mere commodity then this is the way of the world. I used to buy only original Levi Strauss pants, but the things are not produced by the original company anymore, so what the hell....may as well buy the cheaper product from the same source if it fits the same.
Buying Polynesian outrigger canoes that are actually made in Polynesia is the logical way around the snag


#32 Mon, 12/15/2008 - 8:42am


Holly, very insightful.

I remember in the seventies in our dugout races they were all dugouts made by someone from your rez and that was part of the race. what you could build was part of the race I meant.


#33 Mon, 12/15/2008 - 9:34am


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