Sailing oasis in the northern Nevada desert

When the prelude to the America's Cup

sailing race begins this week, eight out of

the 10 boats competing will have "Made in

Nevada" stamped on their masts.

Maybe not literally, but they will bear

Southern Spars logos, the name of the

Minden company that makes made-toorder

masts for the world's most

demanding sailors.

The race is called the Louis Vuitton

Cup.Ten teams from all over the world,

including three American teams all using

Southern Spars masts, will compete in New

Zealand for a month in a series of roundrobin

events. The sole winner of the Louis

Vuitton then will compete against New

Zealand, the last America's Cup victor, in

the 2003 America's Cup in February.

"With eight out of ten boats the odds are

pretty good the winner will be one of our

boats," said Claude Cognian, general manager

of Southern Spars in Minden.

Southern Spars has been making masts

or spars as they're called in New Zealand

where the company has its headquarters

for about a decade. The original company,

based in Palo Alto, Calif., made products for

the defense industry. But when that business

went south the owner looked for other

markets in which the company could leverage

its expertise in carbon fiber.

That led to the manufacture of masts,

the tall, thin poles to which boats' sails are

attached. Carbon fiber is a strong, lightweight

material, which is why it's coveted by

racers who strive to minimize a boat's

weight. But it's expensive too - it's about 30

percent more costly than aluminum, the

more commonly used material for masts.

The company chose the unlikely location

of Minden because the then owner's

uncle lived in the area and the state was

easier to do business in than California,

said Cognian. The company is located on

a Carson Valley road that looks more like

Iowa than Nevada, much less like the seaport

where one would expect to find a

boating business.

The location has proved to be a problem.

Finding experienced engineers as

well as manufacturing workers is not easy.

"There's not a lot of marine knowledge

here because we're in the middle of the

desert," said Cognian.

But it hasn't been insurmountable.

Two years ago, North Marine Sails, the

world's leading sail maker, bought

Southern Spars and built a large office

next door to its 55,000-square-foot office

and plant in Minden.

Southern Spars caters to what Cognian

calls the "top half percent" of the wealthiest

people in the world. Each mast is custom

made, and Southern Spars does the design

and engineering as well as the manufacturing.

(Except for the Americas Cup sailors

who do their own design, which can be a

headache, said Cognian, because they sometimes

try to push the technology too far.)

A typical mast can be priced between

$350,000, for a $2 million boat, said

Cognian, to as high as $1.6 million for the

mast on a $10 million to $15 million boat.

"The business," said Cognian, "is recession

proof. These people lose a billion one day

and make it up the next."

The company's high insurance costs,

however, aren't recession proof. Its rates have

gone up by 30 percent twice since Sept. 11,

2001, said Cognian.

This year about half the company's

business will come from the America's

Cup. The Minden plant built the masts

for the British and Swedish teams as well

as two of the American teams - Team

Dennis Connor and One World. The

masts for the third American team, sponsored

by Oracle Corp., and two Italian

teams were made in New Zealand.

The Americas Cup business is cyclical.

The race is run every few years the timing

is determined by the winner and it

takes most of that time in between for

Southern Spars to make and deliver the four

to five masts that each team orders.

Another 40 percent of the business

comes from the custom orders of the rich,

recreational sailor, and the remaining 10 percent

comes from boat manufacturers.

Southern Spars hopes to grow the manufacturers'

business to 30 percent to 40 percent

of its overall business.

To do that, Southern Spars will have to

beef up its sales force. Amazingly, the company

has a single sales person. That's

because sailing is a small world where everyone

already knows each other, says Cognian.

The boat-manufacturing business is

also a lot more competitive. There are

more manufacturers, all competing

based on price. The average commodity

mast is $30,000, said Cognian.

But that business doesn't require the

same design and engineering effort nor the

same painstaking manufacturing process

needed for each custom order.

Right now Southern Spars in Minden

produces, on the average, 2.5 masts a

month. The average mast is 90 feet long -

the company recently made a 148-foot mast

-- and each mast mold is unique. The carbon

fiber is cut into pieces, which are placed

into each mold by hand. Assembly line

workers follow a complex spreadsheet of

measurements, which tells them where to

place each piece.

The mold is then placed in one of

company's several autoclaves. The

Minden plant has one of the country's

largest autoclaves, a 150-foot machine

that sticks at least 130 feet outside the

building. The autoclave process can take

as long as 15 hours three to four

hours to preheat the machine, six hours

to bake the mold and five hours to cool

down the autoclave so the company

has to man three shifts a day when the

machine is in use.

Otherwise, the company has limited

the use of overtime in an effort to

reduce errors.

The first mast the company shipped to

one of the current American America's

Cup teams shattered while in use. The

reason was never discovered, but the company

made tweaks in the design, the

materials and the manufacturing process

and all has been fine since.

As part of an effort to avoid that

again, Cognian has cracked down. Since

he joined the company a year and a half

ago, turnover has risen from about 5

percent to 10 percent. Training can last

up to six months so, in the past, the

company had been reluctant to discipline

workers for fear of losing them,

said Cognian. "But in our business," said

Cognian, "a 1 percent error rate can

be catastrophic."