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September 25, 2015 02:00 AM

US sales open the door for growth at Deceuninck

Catherine Kavanaugh
Senior Reporter
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    Deceuninck North America LLC
    Deceuninck North America LLC is investing $22.5 million in a new Nevada plant to support its growth in the western U.S.

    With three years of double-digit growth on the books and new prospects west of the Rockies on the horizon, Deceuninck North America LLC CEO Filip Geeraert said it's time to build a second U.S. plant to manufacture its vinyl and fiberglass door and window profiles.

    The Monroe, Ohio-based company broke ground Sept. 19 on a $22.5 million, 150,000-square-foot facility with a rail spur in Fernely, Nev., where the first phase of the expansion calls for bringing six extrusion, one pultrusion and one lamination line into operation in the second quarter of 2016.

    One of the first products to come out of the new plant will be a pultruded, multi-pane, slide-and-swing patio door, which the company says is the only door system that allows homeowners to leave the panels in any position they wish — similar to a partition wall that can be opened in the middle or the extreme right or left.

    Deceuninck will hire 30 to 40 employees to start up the plant, which has room for 24 extrusion lines that will come online in future phases of the expansion. The longer-term timeline for adding extruders and employees — possibly another 40 for a total of 80 — is still unfolding.

    “We are talking with a lot of prospects,” Geeraert said in a telephone interview. “Usually it takes them, depending on their size, one year to convert if they change extrusion partners. We'll have to wait and see how fast that goes. Is it three years or four years? It's difficult to say — the sooner the better.”

    The company is part of the publicly traded, Belgium-based Deceuninck Group, which saw sales of 552.8 million euros ($608 million) in 2014. That was up 3 percent from 2013 as the company grew in Turkey and Europe through acquisitions and product expansions. The North American subsidiary represented 16 percent of sales last year — up from 14 percent in 2013 — with strong U.S. results in the Midwest and Northeast from new construction and home remodeling markets.

    Last year, sales increased 13.5 percent to 85.5 million euros ($110 million) in North America. The subsidiary faced capacity limitations in Ohio and high transportations costs getting product to the West. Having a plant near Reno will solve those problems, improve delivery times and allow the business to keep up its streak of zero backorders, Geeraert said.

    “That [backorder report is] the first email I get every day, and it better be zero,” he said. “That will be a main criterion for our West Coast facility. It's one of our main competitive advantages. That service is truly one of the key elements for fabricators. Our customers have been able to cut their inventory tremendously. Some have only one week of inventory and it's a huge benefit for them.”

    About 7 percent of the U.S. business is generated from the West, Geeraert said, and he expects it to climb into the double digits when the company has a presence there. Deceuninck will build new tools for the Nevada plant, he added, “to adjust to the requirements of the market.” West Coast customers use more sliding windows than hung, bigger doors, slope sills vs. pocket sills, and different installation methods for facades like stucco.

    Deceuninck extrudes its doors and windows from vinyl resin with additives and pultrudes them out of glass-reinforced polyurethane. The pultruded products use the company's Rovex technology, which it developed with Bayer MaterialScience and introduced in 2013 an alternative to aluminum and traditional polyester fiberglass composites. The company says Rovex offers strength, stability and thermal performance.

    “That's truly a new trend that will make a difference,” Geeraert said. “Going to 9-, 10- and 12-foot doors is difficult in PVC unless you beef it up with aluminum or steel. Now you have a material that has the strength of aluminum so you don't have to reinforce it and the thermal characteristics of PVC. It's truly a game changer for the years to come.”

    Staying focused on innovations and zero backorders are a couple of the reasons Deceuninck has been able to outpace the market, which has been growing about 4 to 5 percent on average for new construction and remodeling combined, Geeraert said.

    Globally, in 2014 about 32 percent of Deceuninck Group's sales come from Central and Eastern Europe, 28 percent from Western Europe and 25 percent from Turkey and emerging markets. Deceuninck employs 3,400 people in 25 countries and has production facilities in Belgium, Chile, Croatia, the Czech Republic, France, Germany, Poland, Russia, Thailand, Turkey and the United Kingdom in addition to the United States where it has 450 workers.

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