Winchester, Va.-based Trex Co. Inc. plans to invest $200 million in the next two years to increase capacity by 70 percent, with a new plant at its headquarters site and more production lines at its plant in Fernley, Nev.
The world's largest decking and railing producer expects to add capacity in Fernley at the beginning of the third quarter of 2019 and then again by the second quarter of 2020. The new plant should be operating in the first quarter of 2021.
The investment will allow Trex, which is a major recycler of post-consumer film and bags, to increase output of its composite decking, which competes with wood, according to a June 6 news release.
"Demand trends indicate the conversion from wood has accelerated at a faster pace than expected with our recent introduction of the Enhance decking products," Trex CEO James Cline said in the release. "This has required that we accelerate our planned capacity expansion by one year."
Trex unveiled its Enhance Basic decking with a scalloped profile at the International Builders' Show in February. The company told builders it engineered cost out of the equation for homeowners wanting to upgrade from pressure-treated wood decking to low-maintenance composite decking made from recycled polyethylene and reclaimed wood fiber.
Trex then encountered some start-up problems in Winchester and equipment failures in Fernley. The company ended up modifying the decking profile so it would have less-pronounced scallops on the underside to improve throughput.
Production rates at both the Virginia and Nevada facilities have reached planned levels while the other operating improvements are underway, the release says.
The revised capital expenditure program was announced along with investment guidance that Trex would increase spending related to buildings and equipment from $75 million to $80 million in 2019. The investments will be funded by operating cash flows.
With annual sales of $565.2 million, Trex is the sixth largest pipe, profile and tubing extruder in North America, according to Plastics News data.
"Management noted that demand for its newly launched Enhance Basics and Naturals decking and its legacy flagship decking product Transcend continues to be robust, and reaffirmed its commitment to dedicate significant resources to increasing production throughput at its existing manufacturing facilities," the news release says.
The Enhance Basic decking costs $1.75 per linear foot, which is about twice as much as wood, according to a Trex investor presentation. Even so, company officials expect the price and value proposition will attract more homeowners and put the product within their reach.
Unlike wood, composite decking doesn't fade, stain, scratch, mold, rot, warp or crack. The boards also require no maintenance beyond cleaning with soap and water. In addition, the scalloped profile is lighter weight than other decking for easier handling and installation.
Trex's other new composite decking, Enhance Naturals, is priced at $2.50 per linear foot along with Trex Select, while the company's premier line, Trex Transend, costs $4 per linear foot.
Cline said he appreciates the brand loyalty of Trex customers and wants to assure them "we are making the requisite investments to ensure the quality and availability of the entire portfolio of Trex decking and railing products."