Outlook 2022: Pool maker Latham Group working through supply chain problems; local factories busy

An employee inspects a vinyl liner for an in-ground pool inside the Latham Group facility at the Glenville Business and Technology Park
PHOTOGRAPHER:
An employee inspects a vinyl liner for an in-ground pool inside the Latham Group facility at the Glenville Business and Technology Park

GLENVILLE — Latham Group’s Glenville factory is busy cranking out components for one of those gotta-have-it/can’t-get-it fixtures of the stay-at-home era: the backyard pool.

The company has a Capital Region workforce of about 425 divided among its Latham headquarters, its Latham factory and its Glenville factory.

The Latham plant manufactures polymer pool panels and thermo-plastic pool steps while the Glenville plant makes pool components out of vinyl.

Latham Group calls the site in the Glenville Business and Technology Park one of the largest factories of its kind in North America.

Swimming pool sales exploded during the pandemic, as Americans who couldn’t or wouldn’t travel for recreation made their homes and yards more comfortable for living and relaxing. By mid-2021, many retailers were booked solid on installations through the end of 2022.

So it was a great time to be in the pool business, except that the supply chain of materials needed to manufacture pools bogged down.

Earlier this month, Latham President and CEO Scott Rajeski told The Gazette there was no single problem, but a parade of problems.

“There was challenge after challenge hitting our supply chain,” he said. Supply was crimped but demand continued unabated in 2021. However, things are looking better at the start of 2022.

“The resin supply chain has improved dramatically,” Rajeski said, predicting that Latham Group will be able to significantly rebalance the supply-demand equation this year.

The problem that potentially remains is installation: There’s only so many pools that one crew can do in one season, even considering that fiberglass is a quicker install than other materials.

Latham operates on a B2B2C model — businesses to business to consumer. Latham offers scores of pool designs and scores of customizations for each, and helps consumers digitally design and previsualize an upgrade to their backyard. Once the consumer knows what they want, Latham directs them to a local partner business that will do the install.

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So to clear the bottleneck on installation, Latham is trying to convince its dealer partners that if they hire an additional install crew, it will still send them more business than they can handle, Rajeski said.

Latham Group went public last year on the Nasdaq exchange with one of the best ticker symbols ever: SWIM.

“I wish I could take credit for it,” Rajeski laughed, adding that he does feel a lot of pride in leading the transition from private to public company.

The mandated quarterly financial disclosures show some increased expenses in the wake of the IPO but also show revenue soaring to $492 million in the first three quarters of fiscal year 2021, up 69% from the same period of fiscal 2020. The company projects revenue for all four quarters of fiscal 2021 to reach $600 million to $620 million.

It will be the 11th consecutive year of revenue growth.

Latham’s promotion of fiberglass pools is not to the detriment of the vinyl products made in Glenville and four other factory sites, Rajeski said. Vinyl is what started the company in 1956, he said, and it remains a key part of the business model.

Vinyl-lined pools are more customizable than fiberglass because vinyl is shipped in panel format but fiberglass pools are precast and can’t be any wider than 16 feet, due to trucking constraints.

Vinyl is also less expensive up-front than fiberglass. Its shortcoming is that it needs to be replaced after eight to 12 years, depending on how harsh the water chemistry is maintained and how much sunlight hits the liner.

So in addition to the new-installation market, a steady replacement market keeps the factory on the outskirts of Scotia busy.

“Scotia is the largest or tied for largest plant that we have,” Rajeski said, and has seen investment in new equipment and renovations

“The future is very bright — we’re hiring in Scotia right now. We’re going to be in the liner business for a very long time.”

Rajeski switched from vinyl to fiberglass a while back at his Saratoga Lake home, but it’s a basic pool, far from the fanciest model he could have installed. The kids are older now and don’t use it much. The dogs don’t go in either, not recognizing that it’s different from the vinyl pool that was forbidden to them.

So it’s just Rajeski and his wife. Except on the really hot days, they sit beside it more than they swim in it. Or it’s a centerpiece of the yard when they entertain.

This ability to create something more than a body of water to immerse oneself in is a central part of Latham’s marketing. With extensive customization to shape and features such as waterfalls, tanning ledges, tile accents and spillover ledges, it is selling an environment, a look, or a lifestyle as much as a swim.

Latham Group
LOCATIONS: Latham, Glenville and more than 30 other sites in the United States, Canada, Australia and New Zealand
EMPLOYEES: Approximately 425 in the Capital Region, more than 2,000 worldwide
BUSINESS: Manufacturing fiberglass and vinyl in-ground pools and related equipment
REVENUE: Projected at $600 million to $620 million for fiscal year 2021

More Outlook 2022 – Spotlighting businesses around the Schenectady area

Categories: Business, Outlook 2022, Scotia Glenville

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