Veka adds capacity to meet growth trends for vinyl profiles

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Veka Inc. Erik Shay, vice president of operations and chief operating officer (left) shows U.S. Rep. Keith Rothfus an extrusion line at the company's plant in Fombell, Pa.

FOMBELL, PA. — Joe Peilert has welcomed more guests to the Veka Inc. window and door profile factory in Fombell in recent days than all of his 3½ years as president and CEO.

Elected officials at every level of government visited the 600,000-square-foot plant on Aug. 22 and 23. From borough officials in a manufacturing caucus to U.S. Rep. Keith Rothfus, they wanted to learn about a $6 million expansion plan that includes $321,000 in state grants, and to exchange views on local and national issues.

The grants will offset the cost of new equipment, advanced technology and employee training. Company officials say it's time to add to the 53 extrusion lines and 361 employees making fences, decks and rails as well as door and window profiles.

Some of the equipment is being developed in house, Peilert said of the Germany-based extruder of PVC profiles for residential and commercial customers. The infrastructure expansion — the footprint is not changing — will create 38 new jobs in Fombell.

Peilert said several trends are happening. New home construction in the West, home remodeling in the east, changing laminate preferences in the South, and stricter energy codes that call for better insulation are driving up demand. Veka is preparing to meet it by increasing its capacity capabilities and by helping its customers with everything from engineering support to digital and traditional marketing.

"We're trying very hard to be in tune with our customers' needs in providing product and services that really help them become more competitive," Peilert said. "Our mission is to be partner of choice. That's a key theme for us that we're applying to our customers, employees and shareholders."

Veka officials realize the three stakeholder groups have options. They can invest in China, India, Germany, or wherever they want. Employees can work somewhere else and customers can take their business elsewhere.

"With services, that's where a lot of companies take the chili off the dog," Peilert said. "We didn't do that."

Beyond extrusion

For example, Veka has a complete in-house test wall that simulates wind, water and structural loads to determine if customer prototypes meet building codes. Certification experts from Architectural Testing, Inc. will witness tests, which Peilert said, helps customers go to market faster with their products and at lower costs.

The company, which claims to be the first PVC extruder with a mobile app, also will design websites for its customers. Marketing director Steven Dillon and his staff help with everything from brochures to social media.

"Steve markets Veka as a company and he helps medium and small businesses keep up with their websites, Twitter, Facebook and different tools," Peilert said. "A lot of companies made cuts in those areas."

Veka philosophy 101

From humble beginnings as a maker of roller shutters in 1967, Vekaplast was purchased two years later by Heinrich Laumann, one of its original employees. In the early 1970s, Laumann and his team began designing window systems, working closely with window fabricators.

The company that opened with eight employees grew as vinyl gained shares of the window market. It now employs more than 530 in North America. Although there were about 100 layoffs at the Fombell plant during the Great Recession, Peilert said Veka's three U.S. plants and the one in Canada benefited from being part of a global company.

"When times were tough in the U.S., Europe was strong at large. Russia and Poland have been strong markets for us," he said.

There's also an advantage to being part of a family-owned business that looks beyond quarterly and yearly numbers, he added.

"Our philosophy collectively is that we're trying to pass a bigger, stronger business on to the next owner generation," Peilert said. "That's a totally different mandate than other companies have. When we go through a difficult period — like those five recession years — we don't stop investing in people, training and maintenance. We don't go out on a spending spree. We still have to tighten the belt, but we're not totally closing the faucet. That's what allows us to accelerate and come out of the recession a little bit ahead of our competition."

Vinyl has 60-65 percent of the market share for windows across the country, Dillon said. Last year the Fombell facility extruded 67 million pounds of vinyl for its profiles.

"That represents about 3.5 million windows and doors in the U.S. out of about a 35 million window and door market," Dillon said.

Following LEED

The material that's 85 percent PVC and 15 percent micro ingredients is praised by homeowners, contractors and builders for its energy efficiency and low maintenance and jeered by critics who say every stage of PVC is dangerous from production to disposal.

The long-time debate about how PVC should fit into the U.S. Green Building Council's (USGBC) rating system for Leadership in Energy and Environmental design (LEED) certification is getting intense again.

"If you look at version three [of LEED], you can be awarded points in specific areas for using vinyl windows," Dillon said. "Now they are proposing to award points to people who choose not to use PVC as a material."

The issue came up when Rothfus, a Republican congressman, visited the Fombell plant.

"We brought that up," Peilert said of anti-PVC lobbying. "That's a hot-button topic for us. What I want to see if a fair review. Take all the facts into account and take a broader look at the life-cycle performance rather than certain elements."

The case for PVC as a green building material is driven by thermal efficiency, he added.

"If you look historically at what vinyl windows have done to improve thermal performance and reduce energy costs in homes, it's huge," Peilert said, "and we're certainly capable of living up to new standards like the new 6.0 Energy Star standard that's launching in Jan. 1, 2015."

He stressed that by no means is he or Veka against the USGBC.

"We believe in the organization and as members we're asking for due process to have a complete appreciation of what vinyl windows do," Peilert said. "We're not afraid of benchmark efforts if it's done right."

Recovering construction market

Veka, which is based Fombell and also runs window profile extrusion factories in Reno, Nev., and Terrell, Texas, has emerged from a down economy ready to grow.

The company bumped up production in Terrell with the installation of four extrusion lines for a total of 12 and capacity for eight more. A rail spur also will be built in early 2014. The project comes on the heels of a new lamination line that brings color options for Veka's Pinnacle platform. Company officials said they have found color choices coupled with the weather-resistant properties of the wood grain laminates appeals to its Southern market.

The U.S. facilities generate $120 million in extrusion-related sales, according to the current Plastics News ranking.

"We built our Texas plant in 2006, kind of the beginning of the downturn of the economy, but during that time period energy codes changed. Vinyl became more relevant in the south and aluminum windows started to come out of houses and be replaced with vinyl windows," Dillon said. "Now new growth is starting again in the West and the replacement market is almost on its second leg, if you will, in the northeast. People have vinyl windows they put in 30 years ago and they are re-replacing them with new vinyl windows. Even though there's not as much new construction growth in the Midwest, there are certainly older homes. It's an interesting dynamic all over the country."

Veka also has plants in Edmonton, Alberta, and about a dozen in Europe, Asia and Latin America.

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