By Bob Bouyea
Executive Editor

Sixteen years ago, Steve Potts, his wife, Diane, and a partner started manufacturing Scout Boats in a garage.

Today the Summerville boat company is investing $5.5 million to expand its current plant to meet increasing demand and add a dedicated facility to manufacture a product for Zodiac, a French boat company. Fifty additional jobs will be created, said Steve Potts, the company’s president and CEO.

Scout Boats, which manufactures high-end recreational boats, is adding 50,000 square feet of space dedicated to building their larger boat models that range up to 35 feet, Potts said.

The addition will allow the company to produce about 700 more boats per year.

“Our brand has matured,” Potts said, adding that for the past five years Scout Boats have been ranked No. 2 in quality by J.D. Power and Associates. “The growth of the facility is in response to the demand for our products, especially our larger products.”

Part of the increase in demand is coming from the company’s decision to open dealerships in Europe and Australia.

For the past 1 1/2 years, Scout Boats has been in a pilot program with Zodiac to build and retrofit 300 to 400 deep-V fiberglass hull boats for the North American market. Zodiac is one of the world’s largest boat manufacturers, producing rigid-hull inflatable boats. However, it has a small share of the U.S. market, Potts said.

With increasing demand for its Scout Boats, Potts had to decide whether to continue the relationship with Zodiac. It was taking up floor space and manpower. But Zodiac needed a partner and received positive feedback from its North American distributors about the quality produced from Potts’ company.

Zodiac approached Potts and asked him to submit a proposal to build their crafts. He submitted a proposal that he thought Zodiac would walk away from. But instead Zodiac agreed to Potts’ deal, which included Zodiac leasing a dedicated facility and using Potts’ employees.

Potts is building a 40,000-square-foot facility to manufacture and distribute Zodiac boats in the United States. Scout Boats also has to “Americanize” the boats for the North American market, which includes increasing fuel efficiency and horsepower, Potts said.

“And (adding) things as silly as cup holders,” he said. “In the United States, people aren’t going to buy a boat without cup holders. Dealers started putting demands on these things.”

To Potts, the relationship is about sharing ideas. Zodiac uses robotics in its manufacturing process. Potts wants to learn how they are used and whether it makes sense for him to incorporate robotics into his manufacturing processes. Zodiac will learn from Scout Boats about building high quality boats for the North American market.

This isn’t the first time Potts has been approached by a company wanting to start up a partnership. A couple of years ago Honda came to Potts wanting his company to produce personal watercrafts. Potts said no thanks, feeling it did not fit in with his core business, he said.

Scout Boats builds sportfishing, fish ’n ski, walk around, flats and bay boat models ranging from 14 feet to 28 feet. It will be debuting its largest model, the 35-foot 350 Abaco, in 2006.

Bob Bouyea is the executive editor for the Business Journal. E-mail him at bbouyea@charlestonbusiness.com.

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