Quantum weighs anchor for new East Bay facility

TRAVERSE CITY – The Quantum Sails Design Group is consolidating its manufacturing capacity in a new $1.4 million, 22,400 square-foot office and production facility on International Drive in East Bay Township.

The sail maker expects to move into the structure this month and gradually absorb operations from its Annapolis, Md., facility over the next four months. As a result, the firm could add about a dozen employees to its northern Michigan workforce.

The manufacturer of high-end racing and cruising sails wants to improve workflow, reduce costs and handle the industry's volatile product demand more effectively, said Ed Reynolds, Quantum's president and managing partner.

He also is looking forward to managing a single production facility, instead of two. The manufacturing area at the new facility at 1576 International Dr. will cover about 20,000 square feet of space. The remainder is reserved for offices.

"The associated overhead of one large facility is much, much less expensive than it is for two medium-sized facilities," he said. "The economies of scale are the major reasons for this move."

Peninsula Construction was the contractor for the new facility.

Quantum now employs about 25 people in Traverse City and 12 in Annapolis.

"I think our total will remain about the same," he said. "I would be surprised if it grew much bigger than that."

In part, Quantum is consolidating to keep up with the industry's fast pace of business, Reynolds said. It has to customize practically every sail it produces, while handling an unpredictable influx of orders. And it can't count on a break in the off-season to catch up anymore.

"It is an amazingly complex business, and it is absolutely full-on all the time," he said. "This is a really busy season, but production-wise, we really don't have a slow time any more."

The company has had less than 5,000 square feet of production space and 700 square feet of offices at 10321 E. Cherry Bend Road in Elmwood Township.

Quantum Sails will totally move out of the Cherry Bend facility, which has already been sold to a neighboring business, Thompson Surgical Instruments, Inc. Quantum is renting the building until it completes its move.

Thompson Surgical Instruments intends to manufacture its products there, but will maintain its main office nearby, at 10170 E. Cherry Bend Road.

Quantum has its roots in a number of earlier sail-making companies on Cherry Bend Drive. Officially formed in 1996, the latest version is affiliated with about 55 sail-makers around the world who operate and manufacture under the Quantum name.

"They operated with our design program and to our standards," Reynolds said. Quantum collects license fees from them. In recent years, Quantum has developed cachet as a producer of high-end sails, he said.

Reynolds puts the revenues of the entire international Quantum brand at around $34 million a year, a sizeable fraction of the industry's total revenues, roughly $200 million. Its main competitor, North Sails, has about three times Quantum's revenues and operates with branch offices, not affiliated franchises. "They are the 900-pound gorilla in the market," Reynolds said.

The international nature of the business keeps a steady stream of emails and phone calls flowing into the Quantum offices at all hours of the day, from nearly every time zone in the world.

"Europe started complaining about six hours ago," he said with a chuckle. "It's already tomorrow in Australia and New Zealand. I am learning that more and more. They were already off into tomorrow yesterday afternoon." BN