With virtually no brand recognition and limited commercial production, it's noteworthy that makers of wood-plastic products and industry watchers are putting so much faith in composite fencing products.
``Fencing is one of the reasons we will see this category grow even in a down cycle,'' said analyst John Baugh, managing director of St. Louis-based investment firm Stifel Nicolaus & Co. Baugh spoke at Wood-Plastic and Natural Fiber Composites 2006, held Sept. 25-26 in Baltimore.
The fencing industry is growing 4 percent a year. The use of plastic materials, predominantly vinyl, in fencing applications is growing nearly 10 percent a year - mostly at the expense of wood.
The low-maintenance benefits of vinyl have made it the material of choice in fencing. It makes up about 35-40 percent of the fence market, which is expected to swell to $6.6 billion by 2009.
Some in the fencing sales and installation business believe many consumers have settled on vinyl because of its performance, even though most prefer the look of wood. For those reasons, optimism is high for composite fencing once consumers familiarize themselves with it.
A panel of fencing company executives told conference attendees that premium prices can be achieved as long as composite board extruders solve some of the issues that have troubled the industry since its inception.
Some chemical company representatives suggested coatings as a possible solution to quality or appearance problems. But many in the industry agree consumers should not be asked to pay prices as high as 20-30 percent more than vinyl, which itself is 30-40 percent more than wood, for a material that still requires coatings.
``We already have a product that fades. We already have a product that cracks. And we already have a product that needs to be stained,'' said Tom Polen, president of Elyria Fence Co. in Elyria, Ohio. ``And it's a heck of a lot cheaper than the stuff you guys are making.''
People like wood, panelists said.
``It has to look like wood,'' said Hal Mante, president of Whitehall, Pa.-based American Fence Inc. ``Some people are getting tired of white, shiny plastic.''
The panel seemed to agree that a cedar look-alike would be the most popular look.
Fencing executives also voiced concern over product weight, saying extrusion firms need to consider downstream labor.
Panelist Bill Benner, president of Clinton, N.J.-based Rudl Fencing & Decking, said there is still confusion about wood-plastic deck and fence boards. Many customers, he said, lump composites and vinyl together.
So far, Benner said he has not found a composite fencing product he likes well enough to stock in his warehouse. But he's confident one will come.
``I think the person who develops, or has, a viable product and gets it into the right distribution network, we would certainly look at,'' Benner said in a Sept. 28 phone interview.
