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November 06, 2006 01:00 AM

CertainTeed shuts vinyl site

Matt Griswold
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    Building products giant CertainTeed Corp. announced it will shut down its vinyl siding extrusion plant in McPherson, Kan., effective Feb. 2.

    About 120 will lose their jobs.

    The Valley Forge, Pa.-based company cited the usual suspects as the impetus behind the move: a sluggish housing market, eroding demand for vinyl siding and industrywide overcapacity.

    ``The market has declined enough that we can't keep producing at the rate we produce it and sell it for more than we make it for,'' CertainTeed spokesman Mike Loughery said Nov. 3 by phone.

    CertainTeed will continue to run its injection molded polymer siding and foundation drainage products plants in McPherson. Loughery said CertainTeed has been given the green light by parent company Cie. de Saint-Gobain in Paris to add pipe extrusion capacity in Kansas. That project is expected to ramp up in the next six months.

    CertainTeed evaluated all four of its vinyl siding extrusion plants before choosing to close the McPherson operation, Loughery said. Geography ended up being the determining factor.

    ``Really it is a matter of where the projected growth markets are,'' he said.

    CertainTeed's three other vinyl siding plants are in Jackson, Mich.; Hagerstown, Md.; and Social Circle, Ga. The South is heavily influenced by Spanish- and Mediterranean-style architecture, which is typically sided with stucco.

    The company is far from abandoning its post as a market leader in vinyl siding production, but it seems as if CertainTeed, rather than fight market forces, prefers to take what the market will give it. The firm is hedging its bets on vinyl siding with further investment in fiber-cement capacity, which has been nibbling at vinyl siding's market share in the past few years. The company is in the midst of building a new fiber-cement plant in Terre Haute, Ind. That facility is projected to come on-line in mid-2007.

    Vinyl is the largest material segment in the $8.2 billion residential siding industry in North America, comprising more than $3 billion of that figure. Fiber cement represents about $1 billion, or about 16 percent of the siding market. It is gaining a point or two of market share from vinyl each year, and is projected to continue doing so for the foreseeable future.

    But even if the market continues to shift at this rate, vinyl siding will remain the dominant cladding material for the better part of the next 15 years.

    In a previous Plastics News report, industry consultant Bud Bootier said many of the vinyl siding market's problems began when manufacturers had to start competing with one another.

    ``Vinyl has always been good in head-to-head competition with other products,'' said Bootier, who heads Pure Strategy in Wexford, Pa. ``It competed against aluminum siding even though it was 20-25 percent more expensive. It competed against hardboard and natural wood and pretty much obliterated those as material options.

    ``Now it's vinyl against vinyl, and they're not very good at it.''

    The overall decline in housing starts and remodeling has taken its toll as well.

    ``Housing's part of it,'' Loughery said. ``And other cladding's coming out and catching other people's eyes. When you have so much product out there, it's very hard to be competitive.''

    CertainTeed officials hope to rehire some of their employees from the closing when they open pipe operations in McPherson.

    The firm had 2005 sales of $2.8 billion.

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