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January 20, 2006 01:00 AM

Building highlights for plastics players

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    (Jan. 23, 2006) — The show floor was busy even as the lights were turned off the last day of the International Builders' Show on Saturday, Jan. 14.

    The activity highlights the continued interest in a market that in 2005 had one of its strongest years in decades. By all accounts, 2006 will only see a slight (and I emphasize slight) decline in housing starts, and companies far and wide recognize the opportunities. Here are some highlights of a few key items affecting plastics-related players in four days of construction frenzy.

    Builder Consolidation. According to the Joint Center for Housing Studies at Harvard University, an unprecedented stretch of strong, stable growth has ushered in a period of prosperity for major builders and fueled a wave of mergers and acquisitions. The Top 10 home builders in the country have more than doubled their share of conventional new home sales, from just 10 percent in the mid-1990s to more than 20 percent today. Suppliers should beware the Wal-Mart effect. Builders are going to use their girth to negotiate favorable pricing. But there is an upside, too: Builders are using more pre-assembled components, many of which use plastic components.

    International competition. This is not new to anyone in plastics. On the other side of the coin, however, there are North American companies that are tapping markets like China, both to serve the growing markets there and to export profiles back to North America. Watch the window and door market for this activity, although vinyl siding won't be untouched. One industry official said domestic producers are preparing for this threat by having certification measures in place through the Vinyl Siding Institute.

    Speaking of vinyl siding … Vinyl siding also has undergone a makeover in recent years, and it was more evident at this year's show than ever, as producers introduced darker colors, achieved through better capstock technologies. Owens Corning and Royal Group Technologies Ltd. touted their technology for acrylic-fused capstock that prevents vinyl from developing a whitish film when exposed to ultraviolet rays, moisture or air.

    Almost all the suppliers now are using high-performance polymer capstocks, plus foam backing, so siding is becoming more of a polymer composite product with a vinyl substrate.

    Expect to see more consolidation and further rationalization of capacity by manufacturers in that sector, though.

    And now, about the boom market that is composite decking. It's a growth market, no question, as consumers look to beautify their back yards and don't want the hassle of maintaining a wood deck. But the overwhelming consensus from exhibitors was that the industry has to recover from product failures that have happened, especially over the past year. To have long-term success, plastics manufacturers must figure out a way to successfully combat mold, mildew, staining and sagging problems.

    One gentleman was strolling the show floor, selling a cleaner formulated for composite decks. But it should be in the hands of the plastics industry to figure out how to solve these problems. After all, problems in one product can hurt all players in the sector.

    Angie DeRosa is a staff reporter based in Oklahoma City.

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