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

Judge limits scope of jury verdict against JM Eagle

December 19, 2014 2:30 pm ET

A federal judge in Los Angeles said Dec. 18 that last year's jury verdict issued against J-M Manufacturing Co. — now JM Eagle — for...    More

Image

Jarden hiring for new plastics plant

December 19, 2014 1:45 pm ET

Consumer products conglomerate Jarden Corp. is hiring plastics technicians for a new operation in Erlanger, Ky.    More

Image

Antimicrobial polymers firm TiFiber launching pilot production in Ark.

December 19, 2014 10:58 am ET

TiFiber Inc., which makes synthetic compounds to control dangerous microorganisms, will locate a pilot production facility and its future company...    More

Image

Spray PU foam aids in NASA launch

December 19, 2014 9:22 am ET

NASA's test of the Orion spacecraft earlier this month took advantage of spray polyurethane foam insulation from North Carolina Foam Industries...    More

Auto supplier M-Tek relocating headquarters

December 18, 2014 3:37 pm ET

M-Tek Inc., a subsidiary of Japanese automotive supplier Kasai Kogyo Co. Ltd., will build a new North American corporate headquarters in Murfreesboro,...    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

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

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

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events