ATLANTA — Here's the vinyl siding tale: Excess capacity exists and consolidation will continue in this maturing market.
Manufacturers, at least those who displayed at the International Builders' Show in Atlanta, are focusing on their products' benefits in an effort to outpace that "commodity" reputation often associated with vinyl siding.
And they are answering the demands of builders: simple installation, please, and less fading in those colors.
That's the resounding opinion of the siding manufacturers who pulled out the panels for 75,000 attendees at the show, held Feb. 9-12 in Atlanta.
OC sets the pace
Let's begin with vinyl siding's mammoth player, Toledo, Ohio-based Owens Corning.
The company's display was three times the size of last year's in Dallas, company officials said. The goal of the company's exterior systems business is to "own the outside of the home," said Bob Franco, vice president of that sector.
Owens Corning led the pack in the vinyl-siding consolidation trend. In 1997, the firm gobbled up Dallas-based FibreBoard Corp. and Amerimark of Raleigh, N.C. In early 2000, it streamlined operations by closing the main production plant for the OC brand of siding.
The firm now has an estimated $323 million in extrusion sales, up from $317 million in 1999.
"We have not lost our ability to serve," said Rhonda Brooks, president of the exterior systems business. "But because the market is in decline, we had to stay cost-competitive."
Expect to see further consolidation, predicts John Jurcak, director of marketing for Kearney, Mo.-based Variform. Like other maturing industries, vinyl's smaller guys cannot afford to compete with the bigger players, he said.
The company sees itself as the No. 3 player in the industry.
"The industry did contract 6 percent last year," he said, leaning against a display unit in Variform's booth under the Nortek umbrella. "Variform did not decrease. We still see growth moving forward. We're definitely taking share."
The company, which operates four vinyl-siding facilities, is a subsidiary of Providence, R.I.-based Nortek Inc., and seeks to be a consolidator, not to be consolidated, Jurcak said.
"Nortek is always actively seeking acquisitions," he said. "We're always looking."
Economic slowdown and a 5-6 percent reduction in housing starts means vinyl manufacturers have to stay on top of things, Franco said.
"Everything comes to an end," he said. "Slowing is not bad. It just means you have to better manage."
The industry may not be displaying exciting growth, but vinyl will continue to dominate the exterior siding market, said Jery Huntley, executive director of the Washington-based Vinyl Siding Institute.
"After 25 years of continued growth, we may have reached a plateau, and the economy is in a cyclical slump as well," she wrote in a Jan. 11 e-mail. "The product is doing fantastic as a cladding material for both new construction and re-siding and will continue to dominate."
Vinyl siding currently represents 50 percent of the entire market, Jurcak said.
While most siding is extruded, Alcoa Building Products Inc. is relaunching its injection molded siding in 60 days, said Kurt Forsthoefel, marketing manager for siding and vinyl products. The Sidney, Ohio-based company introduced the siding in 1999 only to recall it nine months later.
"We rethought it and we found a different way to get a faster, easier, more accurate installation," he said.
"We do see very slow growth in 2001," Jeff Peskowitz, vice president of marketing, said in a telephone interview Jan. 16.
"We think that will be carried by growth in remodeling. Alcoa is very focused on remodeling," he added.
For Mitten Vinyl Inc., based in Paris, Ontario, sales last year were very strong, said Sean Carragher, a regional manager. The company expanded last year with a distribution facility in Saskatoon, Saskatchewan, and will open another in Winnipeg, Manitoba, within a month.
"We'll also have a $3 million expansion in manufacturing this year," said Donna Arabski, marketing manager.
CertainTeed Corp. of Valley Forge, Pa., also exhibited at the show, introducing Millennium siding with a SmartWall System that adjusts to seasonal temperature changes. The company also introduced a patent-pending StudFinder System, which it said allows for faster installation and accuracy.
Louisiana-Pacific Corp. of Huntersville, N.C., introduced its Norman Rockwell line, which is coextruded with vinyl and an acrylic capstock.