One hears the terms ‘partnership’ and ‘collaboration’ a lot these days in the recreational boating industry, and we’ll be hearing them more and more frequently in the years ahead as boats, yachts and their associated components grow increasingly sophisticated and connected.

The reality that no one manufacturer can be the best at everything assures collaboration and partnerships will continue to assume ever-increasing importance in boat building moving forward, exactly as they have in the automotive sector. The fact that major industry events like the Boat Builder Awards for Business Achievement presented at METSTRADE specifically recognise the importance of collaboration between suppliers and both production boat builders and superyacht yards underscore the critical importance these partnerships play in today’s leisure marine sector. 

One company that understands this new reality is Patrick Industries, a US-based component manufacturer headquartered in Elkhart, Indiana. Despite being a relatively new entrant to the boat building industry, the company has quickly risen to prominence due to its impressive roster of 33 subsidiary component suppliers. Patrick’s CEO, Andy Nemeth, candidly admits, “We were somewhat unfamiliar with the marine sector when we first acquired dash panel systems assembly designer and manufacturer BH Electronics in 2016. We had a couple of divisions that were selling into the marine market, but it wasn’t yet a strategic focus. However, we saw enormous potential in their leadership and team members, and decided to take the plunge. We haven’t looked back since.”

From that initial investment, the company went on to acquire a succession of marine component manufacturers, building a recreational marine division that last year generated revenues of US$1.04 bn and accounted for 21% of Patrick’s consolidated net sales. In its 2022 annual report, the company notes that approximately 65% of its net sales can be attributed to acquisitions made in 2021 and 2022, as the company added major equipment brands like Sea Dog, Coyote Manufacturing, Williamsburg Marine, Diamondback Marine, Tumacs, Rockford Fosgate, Wet Sounds and Transhield to its growing portfolio. 

In addition, the company has a 14,000ft2 marine studio showroom, design and engineering center located in Sarasota, Florida which provides engineering and integrated design solutions for its marine customers and displays the company’s marine products and services offered.

“We want to be close to the customer, locked arm in arm, so we can proactively identify opportunities” – Patrick Industries CEO, Andy Nemeth

“We’ve acquired more than 80 companies in the past dozen years,” says Nemeth. “Patrick came out of the 2008 recession very lean, and we immediately embarked on a growth strategy – first in the recreational vehicle sector, which was about to begin what we anticipated to be a period of significant growth, then in marine beginning in 2016 for the same reason. While much of that sector growth for us has been acquisitive, we see plenty of runway in our marine business, and really believe we’re just scratching the surface on organic growth. Right now, we’re seeing 5% to 10% organic growth a year, and that’s realized from opportunities that are created by bringing our products together in our full-solutions model for the customer.”

Full-solutions models, not vertical integration

Nemeth is adamant that Patrick’s portfolio of complementary product lines wasn’t formed with a view to vertical integration so much as providing OEM customers with innovative complete solutions in the supply of major components. The solutions model, he says, represents the foundation of the company’s approach to being a truly collaborative partner to OEMs. It’s about operating as a dedicated partner at every stage in the process, from design to manufacturing, while offering a comprehensive range of integrated components.

“What it means is that we’re able to solve a problem for the customer, not just sell them some parts and leave them to figure it out,” he says. “As an example, we do wakeboard towers, we do speakers, we do dash panels, wire harnesses, battery cables. Why not integrate all of it into an innovative tower package for the OEM’s, so they can just check the tower off their list and not have to worry about how to make it all work together? We acquire companies because of the various creative solutions they can bring to our customers, and how they can contribute toward driving innovation.”

More importantly, says Nemeth, the opportunity to supply integrated solutions positions the company to enter into more collaborative ventures with its OEM partners. It’s very much in the same vein as the business models so successfully developed by firms like Toyota and Boeing, for example, to more closely integrate key suppliers into new product development.

“With the brands and the incredible creative talent that we have acquired and partnered with, we’re aggressively starting to push down that path,” says Nemeth. “And we believe we can bring significant value to our customer partners starting at the initial product design phase of their business, empowering them with innovative and integrated solutions tailored to their needs.”    

One of the family

Taking the collaborative approach further, Nemeth notes that Patrick has embraced the Toyota and Boeing model of working with the engineering teams on the plant floor at key customers, working collaboratively to design future components and proactively identify and fix potential problems.

“That’s a business model I firmly believe in,” he says. “We want to be close to the customer, locked arm in arm, so we can proactively identify opportunities and potential problems. For us, it’s all about building trust with your customer, and eliminating headaches from their list of issues. It’s a long term value proposition that we’re committed to.

“We are extremely fortunate to have this kind of relationship with many of our customers. They just trust us, and we trust them. We know we have competitors in every product category, and we know our customers have choices. So it’s about going the extra mile to provide the customer with a greater level of service, and making their day to day that much easier.”

Providing a level of engineering proximity means being where the customer is, and that’s one of the lines of thinking behind the geographic expansion that was outlined as a key growth engine in Patrick’s 2023 investor presentation. Following the lead of Toyota and Boeing, Patrick is committed to a path of establishing a series of mini manufacturing hubs in close adjacency to its major customers.

“Our objective is to bring relevant products that form a solutions model together in a convenient location where we can complete assemblies and get them quickly to the customer,” he says. “Being close to the customer is a priority for us because we want to provide the best service. We’re selling service, quality, and innovation. Being close to the customer, so we can work collaboratively to engineer and produce useful solutions models elevates the overall service experience.”

With its blue ribbon portfolio of brands across its platform and more than 250 manufacturing and distribution locations in the US alone, Patrick Industries is well positioned to continue to deliver on its growth plans in both in its domestic market, and . But with a number of its marine properties already wielding significant international experience, opportunities to roll out its strategy internationally could position Patrick Industries for even further growth.