Nine people died in a recent fire that ravaged a Taiwanese factory owned by Launch Technologies, which manufactures 20% of the world’s golf ball supply, according to The Associated Press.
Industry Disruption
Major brands like Callaway, Wilson, Bridgestone and TaylorMade – all carried by Ball Pro (PPAI 112763, S8), the No. 37 supplier in this year’s PPAI 100 – could be impacted, potentially leading to a shortage of golf balls for the promotional products industry.
- Launch Technologies shipped roughly 260 million golf balls last year, with about 80% of its sales coming from the United States, The Associated Press reported.
Ball Pro currently has a deep inventory of golf balls in its warehouse, so the immediate impact should be small, depending on what brand or model of two-piece golf balls distributors wish to order, according to Adam Hanson, president of Ball Pro.
“We’ve been working almost non-stop with our golf ball manufacturers over the past week to secure the continuity of our supply for the foreseeable future,” Hanson says. “The golf ball brands that had production at the Taiwan factory have other factories in the U.S. and overseas that they can shift production of two-piece balls to in order to avoid disruption to their production needs. We’ve been assured by our ball company reps that they’ll supply us with as much product as they can to remain good partners for us.”
Meanwhile, even though Erie, Pennsylvania-based CPS / Keystone Line (PPAI 111040, S9) – which carries Wilson – has been assured that its inventory of golf balls is already stateside, customers with events in the fall are urged to order early to secure stock.
“Typically, this order will hold us for the entire season, but with the shortages caused by the fire, we may find an increase in sales due to our availability, which would deplete this inventory sooner than expected,” says Pete Gleason, MAS, vice president of business development at CPS / Keystone Line. “Hopefully, other ball manufacturers will be able to absorb a portion of the production lost as a result of the fire, which will help lessen the impact to our industry.”
Because autumn is traditionally a quiet period for custom golf ball orders, suppliers won’t be affected for a few months, says Gary Elphick, CEO of Santa Monica, California-based Disrupt Sports (PPAI 698768, S1), which also has facilities in the United Kingdom and Australia.
“We don’t see this having an immediate serious impact, as ourselves and the channel in general have a good amount of stock,” Elphick says. “We won’t see the true impact here in the U.S. until January and February when we see the backlog of raw materials. As the retail channel is faster moving, I suspect it will see the immediate impacts and we’d all be prudent to keep an eye on that activity.”
Elphick adds that Disrupt Sports and other vendors have become wary of relying on a single supply source following the supply chain disruption from the COVID-19 pandemic. As a result, the company has diversified its raw materials base to include more than 50% of items made in America.
Disrupt Sports also has a sister company – M.i.A Merchandise – specializing in print-on-demand fulfillment for company stores. All of its products are stocked, printed and shipped from the U.S., so it maintains a large amount of blank inventory of all items, including golf balls.
“We believe this unfortunate incident, along with shortages from COVID-19 and the changing geo-political environment, give rise to an ever-growing need for domestic supply and manufacturing to provide assurance in the supply chain,” Elphick says.
Fines, Potential Criminal Charges
The blaze killed nine people, including four firefighters, and injured more than 100 at Pingtung Technology Industrial Park on September 22. Authorities have yet to announce the cause of the fire.
However, Taiwan officials have fined Launch Technologies 2.4 million New Taiwan dollars ($75,000) and warned of criminal charges “for storing 30 times the legal limit of hazardous material and other violations,” CTV News reported.
Pingtung County Mayor Chou Chun-mi said that the company had “3,000 tons of organic peroxides on site,” when only 100 tons of hazardous material is permitted. Chou Chun-mi added that those responsible would be “held accountable for public endangerment and negligent manslaughter.”
- Although Taiwanese law requires organic peroxides, which are highly flammable, to be stored in a separate warehouse building, Launch Technologies reportedly kept the materials on the first floor of the factory building.
- Chou Chun-mi also accused the company of a 20-minute delay in reporting the fire, failing to designate a point person to help the fire commander and failing to give a complete inventory of the organic peroxides on site when firefighters arrived.
Hanson stresses that Ball Pro has inquired with all of its top golf ball manufacturers for assurances of their responsible sourcing practices at their facilities in the U.S. and abroad. “We want to do our part in stressing the importance of social, health and safety and environmental compliance with the companies from which we source our branded and non-branded products,” Hanson says.
History Of Violations
Over the past five years, Launch Technologies has been fined for safety and health violations, labor conditions and air pollution violations, The Associated Press reported.
- In 2011, a court ordered the company to compensate five workers who had sued over allegations of working overtime beyond the legal limit and in polluted conditions, The Associated Press reported.
Lu Ying-cheng, general manager at Launch Technologies, claims the company has improved the work environment in recent years. “The pace of improvement has not been fast enough, and we will continue to review and improve the situation in accordance with regulations,” he said, according to CTV News.
