Paper company Kadant Inc. is selling its composites deck board business, roughly three years after introducing its GeoDeck product to the market.
The Acton, Mass., firm revealed the move during its Oct. 28 conference call announcing third-quarter results. Kadant lost $5.7 million in its composites business during the third quarter, largely due to $4.6 million in warranty expenses, officials said.
``In fact, we are already in discussions with an interested buyer, although we are in early stages and can't be assured that this will result in us completing the transaction,'' said William Rainville, chairman and chief executive officer. ``We don't intend to provide updates as these discussions progress.''
Kadant faced a problem with excessive oxidation, which affected the integrity of plastic used in its decking products, he said. The firm extrudes products from a mix of paper sludge, rice hulls and recycled polyethylene.
``We are confident that the product we are shipping now does not have this problem,'' he said. ``Our decking products continue to be well-received by the marketplace. Sales for the quarter increased 72 percent over last year.
``Over the years, we have created a business that we believe offers great potential in a growing market.
``We are confident that composites will thrive in a company focused on more-similar end markets,'' Rainville said.
Kadant's composite deck business operates a 130,000-square-foot facility in Green Bay, Wis., with nine extrusion lines and 65 employees.