Element 21 is implementing a new three-tiered marketing strategy that is designed to maximize profits while maintaining control over its Scandium alloys. The three-tiered strategy targets: Retail Sales — equipment sales to a variety of domestic and international retailers; Component Sales — the selective sale of shafts and heads to other golf club companies; and Technology Licensing — limited licenses to off-shore golf component manufacturers.
“During 2005, the excitement that has been created concerning our Scandium alloys has resulted in numerous overtures from other golf club companies, club and shaft manufactures that supply the golf industry, and from retailers,” reported E21 President and CEO, Dr. Nataliya Hearn. “Following consultation with our experienced golf team and careful analysis of the market, we have decided that this approach will enable us to maximize shareholder value,” said Dr. Hearn
In recent months the Company has made progress with respect to all three targets, including recent discussions with several U.S. golf club companies about its Scandium shafts and driver heads. The Company has also had meetings this fall with several Asian club head manufacturers. The interest from both of these groups is based on the performance attributes of Scandium and the fact that the cost of carbon fiber and titanium supplied from China has been skyrocketing in recent months. In a span of 1 year, the cost of titanium has almost quadrupled in price. Many industry insiders have expressed concern that this pricing trend is expected to continue for several years. Scandium's strength to weight ratio advantage over titanium is over 25%. Scandium alloy is also 50% lighter than titanium. These and other material features, coupled with a more cost-effective driver club head, result in a number of important advantages over titanium drivers.
In relation to the new golf season and the January 2006 PGA Golf Show, E21 and its sales agents have also been in discussions with a wide number of retail chains in the US and Canada as well with agents and distributors in Australia, Europe and Asia. In addition to traditional off-course specialty golf stores and on-course green grass pro shops, the Company intends to have several authorized e-commerce retailers and catalogues selling its products in 2006.
E21 began receiving prototypes of its new golf products in September for quality control evaluation, testing and sampling purposes. In October, the Company made adjustments to the weight of its driver and new irons, made final decisions on all club cosmetics, and proceeded with a limited production of drivers, iron and wedge sets, hybrid clubs and putters. The Company expects that the “production run” units will be delivered in December, at which time limited deliveries will be made to pre-order customers, E21's sales agents, retailers and distributors, several US and Japanese golf companies, and the USGA..
