AUTHOR: MCKENZ

HED:Pontotoc golf ball factory sold to California manufacturer

By Danny McKenzie

Daily Journal

When Taylor Made Golf began exploring the ball manufacturing business, it headed to Northeast Mississippi and Hansberger Precision Golf in Pontotoc to conduct its research.

After a two-year partnership, Taylor Made, one of the world's leading manufacturers of golf clubs, has bought the HPG production facility and entered the billion dollar golf ball business.

"This is a huge step for Taylor Made," company president George Montgomery said in a nationwide conference call Tuesday morning, "but we're excited about being in Pontotoc."

Taylor Made's headquarters is in Carlsbad, Calif., but Montgomery said the advantages of being in Northeast Mississippi outweighed the 2,000-mile distance in plants.

"We looked at a lot of different alternatives and even considered building our own facility," he said. "But in Pontotoc they've got good technology, trained workers and good managers, and it's a good location for shipping with low energy costs.

"So we decided to start with the good people and expand on our manufacturing rather than building a new plant."

Taylor Made will take over HPG's facilities on Aug. 1. Neither company would release financial details of the sale, but Montgomery said "it would be fair to call it a multi million dollar deal."

"It's also safe to say that after we get into the facility we'll be spending much, much more on upgrading it than we did on the acquisition."

Montgomery also said Taylor Made hoped to retain the 80-100 HPG workers, "but I don't expect there will be any immediate increase in employment."

Taylor Made plans to introduce its "uniquely superior" golf ball in 1999," Montgomery said, "and we hope to expand our work force as we become more successful in the golf ball business."

Taylor Made officials were hesitant to state any specific sales goals, but Montgomery said it was reasonable to expect "that we'll be doing more than $100 million in business over time."

"We won't look at this venture as a success or failure after the first year's sales," he said. "This is a highly competitive market, and we'll be limited at first by our manufacturing capacity."

Montgomery said the capacity of the plant was currently between 4 million and 5 million dozen, "and we expect that will grow significantly."

While Taylor Made will take over the manufacturing facility, HPG, which for years has manufactured Ram Tour balls, will not be leaving the business.

"We're contracting with another manufacturer in the United States," Greg Dinkins, vice president of sales and marketing, said. "We won't continue making golf balls, but we will be selling and marketing golf balls. We'll be servicing all our accounts out of Pontotoc."

Dinkins said HPG has retained the Ram Tour brand name, "and we've also retained the rights to our patents.

"Our new partner will be making the Ram Tour ball to our specifics, and we're very particular how they're used," he said. "That was critical to the whole deal."

Taylor Made has 10 golf ball patents already approved and more pending, and eight balls already approved for play by the United States Golf Association. But it's not the only company entering the $677 million wholesale market.

Callaway Golf and Nike have also indicated they plan to take on such giants as Titleist, Spalding and Dunlop.

"There's something in the tea leaves that we're all three reading that tells us it must be a good business decision," Montgomery said. "We think this is going to be fun for us and fun for some of our competitors as well."

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