In the News: 2005
Turning a Bogey Into a Birdie
Forbes - February 28, 2005
The U.S. golf industry has lost 2 million players in the past two years, equipment sales have crept up less than 2% and the number of rounds played has been flat or sagging since 2001. The main cause: an inability to attract and keep younger golfers. So what to do if you make 25% of all golf club heads sold worldwide? Diversify into making artificial joints and body implants to help aging duffers.
Last year Taiwanese metal-bender Fu Sheng Industrial bought struggling Coastcast, the last U.S. club head manufacturer, for $8 million. But rather than buying L.A.'s Coastcast for its golf units, Fu Sheng picked up its California plant to focus on casting knees, elbows, ankles, hips and heart valves. It does $6 million in sales in its medical and orthopedic implants business, with Johnson & Johnson as its biggest client.
"The growth rate is not that exciting in golf, but there are more people with disabilities and a growing number of senior citizens, including myself," says 75-year-old Fu Sheng founder Hou Teng Lee.
No doubt, golf has been good to Fu Sheng , which got into the business in 1978. It still credits 60% of its $600 million yearly sales to the sport (clients include Taylor Made, Callaway, Ping and Titleist). But besides artificial joints, Fu Sheng 's bigger investments now are spent ramping up its original air-compressor business to run a new generation of factory machines. Over the last couple of years it has spent $30 million acquiring new air-compressor units, including one in St. Louis and another in Pittsburgh.