A fire in Taiwan last week killed nine people and destroyed the factory of a company that reportedly produces about 20% of the world’s golf balls – a tragedy likely to affect global supply of the balls on at least some SKUs, executives said.

It’s a sad development with relevance for the promotional products industry, which routinely sells customized golf balls to buyers across a range of industries for everything from golf tournaments to client-gift packages.

“Incidents like this could create a ripple effect that leads to a short-term shortage for up to six months on select SKUs,” Britney Godsey, chief revenue officer of supplier Gold Bond (asi/57653) and a member of Counselor’s Power 50 list of promo’s most influential people, told ASI Media.

Gold Bond inventories and decorates golf balls at its facility in Hixson, TN. Fortunately, said Godsey, the company is not concerned about its stock because it has a “deep supply reserve with regards to brands and SKUs that we know to be affected at this time.”

Still, speaking about golf ball supply across the consumer and B2B marketplaces more broadly, the fire could lead to a struggle for brands that used the facility to keep up with demand on at least some products, she said.

Various press reports have indicated that Callaway, TaylorMade, Bridgestone, Mizuno and Wilson all sourced golf balls from the factory owner, Launch Technologies, Inc., which is said to have produced about 260 million golf balls last year while generating 80% of its sales in the United States.

“Whatever [Launch Technologies] inventory we OEMs [original equipment manufacturers] have on hand or on the water [being shipped] is all we’ll have for quite a while,” Dean Klatt, CEO of ball manufacturer Seed Golf, told Golf Digest. “Moving manufacturing is not easy in this case.... At best, I would say six months to reestablish supply elsewhere.”

What Promo Distributors Should Know

Godsey said there are key points that promo distributors interested in sourcing golf balls should keep in mind.

Firstly, golf ball brands should have a decent supply of inventory on the particular products affected by the fire, so immediate supply should still be decent to strong – for a time at least, she said. Furthermore, not all golf ball brands and SKUs have been impacted.

“It’s important to understand that even if a particular brand was affected by this unfortunate incident, it may not be affecting all SKUs within that brand,” Godsey told ASI Media. “You have a sort of ‘good-better-best’ golf ball option for every vendor. So, while the ‘better’ could be affected, any brand-loyal consumer could still have the opportunity to get the ‘good’ or even the ‘best’ option.”

“It’s important to understand that even if a particular brand was affected by this unfortunate incident, it may not be affecting all SKUs within that brand.” Britney Godsey, Gold Bond

Godsey noted that Gold Bond is collaborating with vendors to understand which golf ball styles could see the biggest supply-side challenges. “We’re working to ensure our in-house inventory levels are prepared to stay consistent with market demand while they get back up and running,” she added.

Strictly from a supply perspective, the fire, if it had to occur, did so at a somewhat fortunate time of the year, with autumn and winter arriving in many areas of North America and Europe.

“There are still many fall tournaments being planned and golf is a great gift for the holidays, but as we get deeper into the coldest months of the year where fewer rounds are being played, this does offer an ample amount of time for the supply line to bounce back while we await next year's PGA Show, when things start to pick up pretty quickly,” said Godsey.

Alleged: 30 Times the Legal Limit of Flammable Hazardous Material

The fire erupted the night of Friday, Sept. 22. Nine people, including four firefighters, died in the blaze. An explosion that caused a part of the building to collapse reportedly trapped firefighters and workers under rubble; about 100 people were injured.

As of this writing, authorities have not declared the cause of the fire.

🚨A huge fire occurred in Taiwan at a golf ball manufacturing facility last Friday, killing 9 people. The factory produces goods for Launch Technologies, a company that shipped 260 Million golf balls last year, 1/5th of global golf ball supply. Callaway, TaylorMade, Bridgestone,… pic.twitter.com/3SUtckbN9n

— NUCLR GOLF (@NUCLRGOLF) September 27, 2023

“You never want to see something like this happen,” said Godsey. “First and foremost, we hope that all the survivors are safe and getting on with as minimal impact as possible to their lives.”

This week, officials in Taiwan fined Launch Technologies about $75,000 and indicated criminal charges could be forthcoming because the company was storing 30 times the legal limit of a highly flammable hazardous material at the factory. The firm allegedly had 3,000 tons of organic peroxides on site; only 100 tons is permitted.

The Associated Press reported that Taiwanese law also mandates that organic peroxides be stored in a separate warehouse building. Launch Technologies is accused of keeping the flammables on the first floor of its factory.

In addition, authorities fined Launch Technologies for issues that included allegedly waiting 20 minutes to report the fire and for neglecting to provide firefighters with a total inventory of the organic peroxides when they arrived.

Founded in 2006, the company has previously been in hot water with authorities. Within the last five years, Launch Technologies incurred fines for inadequate labor conditions, safety/health issues, and air pollution violations, according to the Associated Press. Also, following a lawsuit, a court ordered Launch Technologies in 2011 to pay five employees compensation for working overtime beyond the legal limit and because they labored in health-harming conditions.