Winchester, Va.-based Trex Co. Inc. will build a third manufacturing plant for its composite decking products, in Little Rock, Ark.
The five-year, $400 million investment will create 500 jobs.
The decking extruder's strategy calls for a multifaceted site with deck and railing production, plastic film recycling and processing, reclaimed wood storage, warehousing and administrative offices.
Trex currently operates two manufacturing plants for decking. A new facility in Winchester, Va., was completed in June, and its plant in Fernlee, Nev., underwent a capacity expansion in the summer of 2020.
The move into Little Rock gives the company competitive advantages in the dynamic outdoor living market, according to Trex President and CEO Bryan Fairbanks.
"It will afford us the ability to flex with demand by adding capacity as needed," Fairbanks said in a news release. "Having multiple manufacturing sites also helps mitigate risk while providing bandwidth to pursue new opportunities that will enable us to further leverage our unsurpassed brand recognition and expand our presence both domestically and internationally."
Trex decking continues to take market share from wood decking as homeowners keep up their pace of upgrading outdoor living spaces.
Company officials said the third manufacturing facility will give customers better access to Trex residential products where and when they need them, and also position the company for growth.
"This new site represents a strategic investment not only in our company's future but in the future success of our valued channel partners," Fairbanks said. "With the outdoor living category continuing to show strong momentum and our success to-date in converting share from the wood decking market, the time is right to further expand our capacity so that we can meet future customer demand efficiently and effectively."
Little Rock emerged as the best fit for Trex's needs based on the company's search parameters. The site gives Trex a location closer to raw materials, a pool of qualified labor, proximity to growth regions for wood conversion, and adjacency to major transportation hubs that should lower freight costs for customers in the middle of the country currently served from Virginia and Nevada.
"This regional manufacturing and distribution center will benefit greatly from our amazing assets — those being river, road, rail and air all intersecting in one place," Little Rock Mayor Frank Scott Jr. said in the release. "And our residents will benefit from the addition of hundreds of high-wage jobs added to the economy."
Trex will fund the $400 million project primarily through ongoing cash generation.
The company's sales increased 18 percent to $881 million for another record year in 2020. Trex ranks sixth among North American pipe, profile and tubing extruders, according to Plastics News' latest ranking.