Trex begins making new product taking it beyond outdoor decks

By Catherine Kavanaugh
Staff Reporter

Published: May 5, 2014 3:47 pm ET
Updated: May 5, 2014 4:59 pm ET

Image By: Trex Co. Inc. Trex Co. Inc. donated 1,700 feet of its decking product for use in benches at the National D-Day Memorial in Virginia.

Related to this story

Topics Sustainability, United States

Last week Trex Co. Inc. started filling orders for a new alternative to virgin polyethylene that is being manufactured at its facility in Winchester, Va.

Unlike Trex, an alternative-wood decking, the initial buyers of the raw material are not in the outdoor products market, according to Ron Kaplan, CEO, president and chairman of the Winchester-based company.

During a quarterly conference call on May 5, Kaplan said the applications for its new product are related to an industry that is non-seasonal and non-cyclical. He did not identify the industry but he said company officials anticipate early sales will be brisk and reshape the company.

“We expect in 36-48 months that it would be a very significant portion of Trex’s overall sales and will change the complexion of Trex,” Kaplan said.

The first line will be in full production by the beginning of July. Then, company officials will determine how many more lines to start through 2015. Three to four lines will make up the first phase.

Kaplan expects the new product will boost sales and earnings this year and that consideration is been given to reopening the shuttered plant in Olive Branch, Miss.

“We contemplated that. We haven’t made any final decisions about that,” Kaplan said.

Capital spending on machinery for the new product will be increased next year following this year’s planned investment of $15 million, Trex CFO Jim Cline said.

For competitive reasons, Kaplan said they could not elaborate on their plans and expectations.

“I can tell you we’re in production. We’re making shipments. We’re making a profit. We’ve entered a new industry,” he said.

Conversely, Trex is slowing production of its recycled wood and PE deck and railing lines in the second quarter because it is carrying a high level of inventory. The deck-building season was delayed due to an unseasonably cold, snowy and long winter across much of the nation.

Net sales dropped $7.3 million to $100.6 million for the first quarter of 2013 compared to the prior year. Net profit was $12.3 million, which is down from $21.6 million for the prior-year period.

Kaplan said bad weather slowed orders by 26 percent between Feb. 24 and March 31 but that trend reversed at the beginning of April.

Quarterly sales took a bigger hit with the end of a tax valuation allowance in 2013. The increase in taxes represents almost 80 percent of the change in net profit.

For the second quarter, company officials are forecasting sales of $125 million, which is a 27 percent increase year over year.

Meanwhile, the company announced that it has donated 1,700 feet of Trex Transcend decking, which was installed as benches, at the National D-Day Memorial in Bedford, Va. The site is undergoing a restoration as the 70th anniversary approaches of the invasion of Normandy during World War II.


Comments

Trex begins making new product taking it beyond outdoor decks

By Catherine Kavanaugh
Staff Reporter

Published: May 5, 2014 3:47 pm ET
Updated: May 5, 2014 4:59 pm ET

Post Your Comments


Back to story


More stories

Image

Deal puts Convergence Packaging under Comar's umbrella

October 24, 2014 2:00 pm ET

Convergence Packaging Holdings LLC, itself a product of mergers, now is joining together with Comar LLC.    More

Image

Akro-Plastic buying German subsidiary from Metabolix

October 24, 2014 3:32 pm ET

Akro-Plastic GmbH, a Niederzissen, Germany-based plastic compounder, has purchased the assets of Metabolix Inc.'s subsidiary in Germany.    More

Image

Automation firms join forces, look to automotive for future growth

October 24, 2014 2:43 pm ET

Hoping to ease the way for automation in some specialized areas of automotive plastics like laser cutting of door panels, a German robot maker and an ...    More

Image

German export sales strong, push for energy savings continues

October 24, 2014 12:34 pm ET

Germany is the engine that drives the European economy — and when it comes to the plastics industry, German machinery is a potent force, an...    More

Image

SRG opens second China auto parts factory

October 24, 2014 11:25 am ET

U.S. automotive supplier SRG Global Inc. said Oct. 23 it is opening its second plant in China, an injection molding, plating and painting facility in ...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events