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
Companies & Associations

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

Plastics recycling is in full swing behind the scenes at NPE 2015

March 26, 2015 11:00 am ET

Paul Benvenuti walks the NPE 2015 show floor in Orlando with purpose. Keep up or be left behind, because this man has a job to do this week, and he's ...    More

Image

NPE nudges attendees to recycle

March 24, 2015 1:47 pm ET

A public awareness campaign developed by Keep America Beautiful is receiving prominent display at NPE 2015 as part of the show's overall effort to...    More

Image

SPI launching recycling summit

March 23, 2015 5:10 pm ET

The Society of the Plastics Industry Inc. announced Monday at NPE 2015 that the plastics trade association will return to Orlando in 2016 for a brand ...    More

Image

Designing a new image for plastics and recycling

March 23, 2015 2:36 pm ET

New York has its fashion week, and so does Paris and Milan. But they're no competition for Orlando this week as student designers who helped kick off ...    More

Image

DuPont exec: Still lots of lightweighting needed in the auto industry

March 23, 2015 6:00 am ET

In that role, Jeffrey Sternberg is responsible for bringing the breadth of DuPont advanced materials — as well as renewably sourced materials an...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

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 billion 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

Upcoming Plastics News Events

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

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

More Events