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June 19, 2006 02:00 AM

AERT opens third wood-plastic production site

Matt Griswold
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    Advanced Environmental Recycling Technologies Inc. is putting the finishing touches on its third wood-plastic composite extrusion facility, which it expects to begin operating commercially in July.

    The company is expanding its extrusion and recycling capacity in an effort to prolong its rapid growth rate and reach the $1 billion sales mark in the next decade.

    Springdale, Ark.-based AERT is no stranger to high-speed growth. The company's 2006 first-quarter sales were up 39 percent from the year-ago quarter.

    The maker of wood-plastic composite deck and railing is installing the first of four extrusion lines slated for AERT's second extrusion plant in Springdale, its third overall. The other plant is in Junction, Texas. AERT also has recycling facilities in Lowell, Ark., and Alexandria, La.

    ``We're testing the different systems now. It will open sometime probably right after the Fourth of July,'' said Bob Thayer, chief financial officer, in a June 14 telephone interview.

    AERT manufactures ChoiceDek composite decking for Tacoma, Wash.-based Weyerhaeuser Co. ChoiceDek is sold in Lowe's retail stores. In addition, AERT makes composite building products under its own brand, MoistureShield.

    The firm also makes window and door components as well as exterior trim and fascia from wood-plastic composites.

    The combination of consumers' desire for low-maintenance products and the vigorous growth of Lowe's stores is helping to boost AERT sales. By 2010, composite decks are expected to grow to about 35 percent market penetration, up from 10 percent in 2004.

    A relationship with Bentonville, Ark.-based Wal-Mart Stores Inc. provides AERT with a steady stream of discarded packaging material and post-consumer shopping bags. AERT uses virtually 100 percent recycled material - both polyethylene and wood - in its products, using virgin resin only if not enough recycled material is available to meet demand, Thayer said. He noted that AERT is in the midst of a feasibility study to determine the cost-effectiveness of gathering curbside material as well.

    There is still plenty of growing to be done, Thayer said. He expects the new extrusion plant to generate about $100 million in annual sales by itself, once the three other extrusion lines are installed and running, though he declined to speculate on how long that might be.

    As demand increases, so will AERT's capacity, Thayer said.

    However, the firm has no immediate plans to expand into the composite fencing market.

    ``We'll probably just watch and see how Trex does,'' he said.

    Winchester, Va.-based Trex Co. Inc. launched its Seclusions line of composite fencing this year. Trex is also the market leader in composite decking.

    ``It is a logical expansion, but we have our hands full,'' Thayer said. ``A couple years down the road? Who knows? If it appears that others in the business are successful, I'm sure we'll look hard at it.''

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