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February 14, 2011 01:00 AM

Georgia Gulf buys Crane siding unit

Bill Bregar
Senior Staff Reporter
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    PVC maker Georgia Gulf Corp., which bought vinyl building products giant Royal Group in 2006, is continuing its vertical integration move by acquiring Crane Group's siding business in Columbus, Ohio.

    Georgia Gulf President and CEO Paul Carrico said the deal will make it the third-largest vinyl siding firm in North America.

    In a Feb. 9 announcement, the Atlanta-based resin maker said it spent about $72 million to buy Crane's Exterior Portfolio siding business. The Crane operation had about $100 million in 2010 sales and generated $10.5 million in earnings before interest, taxes, depreciation and amortization, according to Georgia Gulf.

    The two-plant Columbus siding business employs 260. Company officials declined to say how many extrusion lines the operation runs.

    The Crane siding deal is much smaller than the blockbuster $1.6 billion Royal purchase. But the Columbus business gives Georgia Gulf a key location in the Midwest, solid management and a premium line of insulated siding under the Solid CoRe Siding brand, said Mark Orcutt, executive vice president of Building Products for Georgia Gulf.

    Royal siding factories are in Woodbridge, Ontario, and Newbern, Tenn. The Midwest is an important vinyl siding market, Orcutt said in telephone interview the day the deal was announced.

    “They have a good reputation and a good leadership team. It's a marketing-driven company. They have a high mix of insulated products and geographically, they were in a spot we weren't in,” he said.

    Jim Ziminski will remain president and Jeff Cabbage will stay as vice president of sales. Orcutt said Georgia Gulf will retain the Exterior Portfolio name and the product lines: CraneBoard, Portsmouth Shake, Solid CoRe Siding and Architectural Essentials.

    Orcutt visited the Columbus siding operation to stress its importance to employees. “We have no intention of closing that plant or consolidating it,” he said.

    Ziminksi said Crane pioneered insulated siding 12 years ago. Solid CoRe is a wide-faced siding backed with expanded polystyrene foam. The process allows wider and straighter siding. “That's really a core product for our business,” he said.

    Construction products account for about one-third of total corporate sales at Georgia Gulf. Royal offerings include siding, decking, fencing and railing, trim and moldings, pipe and fittings, and window and door profiles.

    “An awful lot of our chemicals-business products go back into the housing-related sector,” Orcutt said.

    But Orcutt said Georgia Gulf management is not focusing only on buying downstream PVC processors: “They're looking to expand in both building products and chemicals, and they will invest where it makes sense.”

    After Georgia Gulf gobbled up Royal, it moved quickly to cut about $300 million worth of businesses that were not making money, closing several plants and replacing top management. That won't happen after the targeted Crane siding purchase, according to Orcutt.

    Residential construction was still relatively strong in 2006 during the Royal pickup. But that was the beginning of a sweeping decline during the recession.

    Consultants Principia Partners of Exton, Pa., said North American residential siding is recovering, and should grow an average of 7 percent in 2011 and 2012.

    “I hope they're right,” Orcutt said. “I think we're cautiously optimistic. I think there's going to be slow growth and we're hopeful. Eventually it's going to turn around, just nobody can tell you exactly when.”

    The two largest PVC siding extruders in North America are Valley Forge, Pa.-based CertainTeed Corp. and Kearney, Mo.-based Ply Gem Industries Inc., according to Plastics News rankings.

    After selling Exterior Portfolio, Crane Group's sole plastics construction products manufacturing businesses are TimberTech wood-plastic-composite decking, railing and fence, and Crane Materials International, which makes marine seawalls, docks, piers and gangways.

    Crane sold its vinyl fence manufacturing in 2008. The following year, managers acquired its custom extrusion business, which is now called Engineered Profiles LLC, doing business as Crane Plastics. Crane Group has a minority interest in that company, according to President and CEO Tanny Crane.

    She said construction-related businesses remain a key part of the family-owned Crane Group. Besides TimberTech and CME, those businesses include door- and frame-maker Evermark, a roofing company and a steel supply and fabrication business. Crane Group also is looking to make acquisitions outside the building-products sector, she said.

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