Volume 9, Issue 10 - November 2008

What’sNews

MARKET NEWS
Is a Glass Shortage Coming?

Could a glass shortage really be on the way? Rumors of such have been growing for months, and now conclusions are beginning to be drawn at factors that could have led to a shortage.

“It’s pretty obvious,” says Mauro DiFazio, vice president of float glass sales for Zeledyne in Tulsa, Okla. “Asahi Glass Co. has taken three tanks out of the industry. There was a huge surplus of clear. There is not anymore. My understanding is … that the clear market is sold out.”

Beginning in April, AGC Flat Glass North America’s (AFGNA) parent company, Japan-based Asahi, closed the doors of float glass facilities in Victorville, Calif., and St. Augustine, Quebec, and one production line at its Greenland, Tenn., manufacturing plant. According to the press release issued by the company, the move was expected to reduce Asahi’s glass production capacity in North America by approximately 40 percent.

“The downturn in the residential market resulted in a significant overcapacity situation,” says John Hughes, commercial segment manager for AFGNA. “This supply/ demand situation resulted in AGC temporarily reducing its capacity.”

Hughes adds, “AGC will be bringing up the lines once demand warrants it.”

While the move may have helped Asahi’s bottom line, others worry about what may happen should the residential market begin to pick up while commercial holds steady, increasing demand for this product.

“With the downturn of [AGC] and shutting down of three of their float lines we’re now running at about 98 percent of capacity as an industry,” says Russell Ebeid, president of Guardian Industries Corp.’s Glass Group in Auburn Hills, Mich. “So any little blip is going to affect supply of glass to the trade.”

One such blip occurred recently, when torrential rains left parts of Wichita Falls, Texas, under as much as 15 inches of water-and left Pittsburgh-based PPG Industries minus one float glass line. The disruption came shortly after the company began making scheduled repairs to its line in Carlisle, Pa.

PPG clearly is not alone in its need for repairing the long-running lines as continuous upgrades must be made to furnaces around the world. For companies such as PPG where, Vicki Holt, senior vice president of glass and fiberglass, points out, “the residential segment is actually the largest user of glass, in terms of tonnage,” now may be just the time to repair lines when less demand is being heard from the residential sector.

Shortly before press time, PPG announced it would cease production at its Owen Sound, Ontario, Canada, glass manufacturing facility in the first quarter of 2009, and idle one float glass line at its Mt. Zion, Ill., glass plant in the second quarter of next year.

Kolbe Acquires
Point Five Windows
Kolbe & Kolbe Millwork Co. Inc. has acquired Point Five Windows, Inc. of Fort Collins, Colo., a manufacturer of custom, wood windows and doors for palatial residential estates and light commercial projects. Terms of the sale were not disclosed.

“The acquisition of Point Five is a continuation of our strategy to advance our nationwide leadership position in the high-end window and door market. Kolbe continues to evolve as an organization that provides significant value to those customers who desire highly customized windows and doors,” says Mike Salsieder, Kolbe’s president.

Doug Wichlacz, Point Five Windows’ vice president of operations, adds, “Both Kolbe and Point Five share a dedication to our customers, our craftsmanship and our communities. It’s a great match that will benefit all involved and served by our businesses.”

Michael Collins, an investment banker with Jordan, Knauff & Company and a DWM columnist, advised Point Five Windows in this transaction.

“This transaction confirms our belief that forward-thinking companies are still seeking to acquire attractive businesses, despite the downturn in the housing market,” says Collins. “We’re closer to the beginning of the recovery than the beginning of the decline. Companies like Kolbe & Kolbe, who are willing to make a smart bet on the future strength of this industry, will find themselves extremely wellpositioned when the recovery arrives.”

Point Five will operate as a wholly owned subsidiary of Kolbe.

Joyce Purchases
Graef Windows Joyce Manufacturing in Berea, Ohio, has purchased the assets of Graef Windows in Youngstown, Ohio. The terms of the purchase were not disclosed, and the sale was effective September 10.

Joyce executive vice president Gary Winkler says the company has not yet decided how it will brand the window arm of the business, but for now will call the company “Joyce Windows.”

Joyce previously manufactured vinyl sunrooms primarily under the brand of Oasis. While it is still early in the process, Winkler says the company plans to upgrade both the former Graef facility and its marketing strategy.

“It’s going to be a phenomenal upgrade,” he says. “I come from the replacement windows and I can tell you we’re going to be very upscale with our marketing. The product has always been a great product, and we’re now going to market it with great literature.”

Huttig Announces Closure of Fredericksburg Location In May, the Fredericksburg, Va., location for Huttig Building Products Inc. was struck by a storm that lifted the facility’s roof, causing more than $700,000 in damages and leaving several employees badly shaken. Just three months later, employees of the Fredericksburg location are facing another serious issue—closure.

Huttig announced recently it will close this location, citing a “continuing decline in the housing market” as cause. Company officials say this move reflects an ongoing effort to adjust the size of its infrastructure to match current demands.

“In this challenging environment, we continue to focus on controlling expenses, improving operating efficiencies, reducing inventories, generating cash, and gaining market share,” says Jon Vrabely, president and chief executive officer.

Employees were notified of the company’s intent August 26, 2008, and company officials report they expect the action to be completed in the fourth quarter of 2008. Huttig expects to incur between $0.6 million and $0.8 million in operating charges related to this action during the third and fourth quarters of 2008, comprised of between $0.5 million and $0.7 million for asset write-offs and transfer costs, and approximately $0.1 million for employee severance costs. The company expects approximately $0.3 million of these charges to be cash payments.

Company officials say they expect to continue to serve substantially all of its Fredericksburg customers from distribution facilities in Rocky Mount, N.C. and Lancaster, Pa.

FeneTech to Market
Softsolution Products in North America FeneTech has concluded an exclusive cooperation agreement with Austria-based Softsolution to market its products in the North American market. Softsolutions’ products include Virtual Digitizing (from a digital photo to a CNC cut and processed template), SCAD (powerful CAD/CAM system for non standard shapes), LSC LineScanner (a measuring and defect detection scanning solution) and other products.

Effective immediately FeneTech Inc. will take over all sales, service and support activities for Softsolution products in these territories.

“Softsolution always tries to form alliances with professionally organized, well known and established sales partners for market places worldwide,” says Christian Krenn, sales manager of Softsolution. “After the first meeting with the management of Fenetech Inc., we immediately knew that this was the right partner for us … Together we are now able to serve these markets perfectly and introduce our new highly innovative technology, such as the LSC LineScanner to the North American marketplace.”

Ron Crowl, president of Fenetech Inc., adds, “When evaluating potential partners we look for companies that bring significant new technology that can add tremendous value to existing as well as future clients, as well as the ability to integrate this technology into our core FeneVision family of software products.”

Aribell Purchases Wardco’s Venting Sidelight Business Aribell Products Ltd. of Woodbridge, Ontario, is purchasing the venting sidelite business of Wardco Manufacturing based in Burlington, Ontario. Aribell will now manufacture these venting sidelights, and add these to its existing line of door components.

“The addition of these venting sidelights enhances our overall product offering to Canadian door prehangers,” says Brian Belzberg, president of Aribell. “ … Aribell is well positioned to offer this product at very attractive prices.”

“We felt that while we have been successful selling this product to door pre-hangers, we were essentially selling to our competition,” says Rick Ward of Wardco. “There was far more potential in the market place for venting sidelights if sold by a specialist serving all door prehangers. Wardco needed the space for our other operations, and Aribell as both a valued supplier and wellconnected with all Canadian door pre-hangers was the natural buyer.”

ADCO Global to Invest
in New Facility in China ADCO Global’s Kömmerling subsidiary has signed agreements with Nanjing High Technology Zone to build and operate a plant in Nanjing, China, to manufacture sealants and adhesives for the construction and transportation markets in China and Asia.

Construction of Phase 1 of the new facility is already underway and operations will begin in early 2009. The new facility will utilize raw materials produced in Asia and, according to the company, is intended to enable increased penetration of expanding Asian markets while complementing ADCO Global’s existing production units in the United States and Germany.

COMPANY NEWS
Therma-Tru to Close Fredericksburg, Virginia, Facility Therma-Tru Corp. announced plans on October 2 to phase down and ultimately close its Fredericksburg, Va., manufacturing facility, effective July 31, 2009.

The plant currently manufactures steel-edge doors and frames and assembles door systems.

“We sincerely regret having to make this decision. In response to the continued downturn in the U.S. housing market, we are forced to align our capacity with marketplace conditions. We truly appreciate the hard work and dedication of our associates in Fredericksburg,” said Bob Keller, vice president of manufacturing for Therma-Tru.

The company will offer transitional assistance and job search training for all associates. The plant currently employs about 200 people.

Therma-Tru’s Fredericksburg facility typically hasn’t opened its doors to the press but allowed DWM magazine to visit its Virginia plant recently so readers could learn about the intricacies of its door operations. Sadly, before the article was set to be published the company announced the news of its closing.

The news comes approximately six months after the company closed its Houston plant at the end of March and the company moved those operations to Fredericksburg due to its location as most of the Lowe’s stores were located East of the Mississippi. After the ann o u n c e m e n t was made Keller spoke to DWM magazine to offer further details.

Keller confirmed that the Lowe’s business will move to Butler, Ind., and Roland, Okla. Both facilities pre-hang products currently for Lowe’s.

“Overall, Therma-Tru’s volume dropped so low due to the housing market that you have to look at your excess capacity,” said Keller. “This outweighs the issue of logistics.”

The facility also is responsible for special orders and this will move to Butler as well.

As to how Therma-Tru customers will be affected Keller said, “It’s our job to make sure it doesn’t affect them.” “Our job is to provide a viable product and our intent is to provide it on time, and we will do that whether it happens in Indiana or Virginia,” he added.

Keller says Fredericksburg’s steeledged door business is still being evaluated but says some of it will move to an outside vendor.

“We’re going through this line to determine what products will continue and what products will move to an outside vendor,” he said.

Monarch Holdings Files for Reorganization Under Chapter 11
Monarch Holdings and its subsidiaries, which include Hurd Window and Doors, Monarch Manufacturing and American-Weather-Seal, filed for re-organization under Chapter 11 in the U.S. District Bankruptcy Court for the District of Western Wisconsin on September 15. The company reports an estimated 1,000 to 5,000 creditors, $10 million to $50 million in assets and $10 million to $50 million in liabilities, according to court documents.

According to a press release issued by the company, its management attributes the need for filing “to the high cost of lawsuits the company assumed when it purchased Hurd Millwork Co.” As part of the reorganization, the company has closed American Weather-Seal.

“The company expects to continue to operate in the normal course of business during the Chapter 11 reorganization process with our current team of management and employees,” adds the release.

Among the company’s 40 largest creditors listed in its filing are the following industry companies: Oldcastle Glass (with a claim of $511,865), Guardian Industries ($497,503), Veka Inc. ($445,851), Truth Hardware ($274,416), Ritescreen ($191,209), Linetec ($153,937), Balance Systems Inc. ($99,765), G-U Hardware Inc. ($61,572), Ashland Hardware Systems ($48,820), HOPPE North America ($37,985), PPG Industries ($35,565), Kenyon’s Stained Glass ($30,266), Amesbury Group ($22,467), Mikron Industries Inc. (amount not included in court documents).

Truseal Obtains Injunction Against Beijing Huali
The U.S. District Court for the District of Nevada issued a court order in October granting a temporary injunction preventing Beijing Huali Architecture Decoration Co. Ltd. from “making, using, selling, advertising or offering for sale any of its products that infringe any claim of U.S. Patent No. 5,851,609,” which is held by Truseal. The injunction includes “Huali’s HualiSeal and EdgeMax Seal sealant/spacer systems or any sealant/spacer system no more than colorably different, as well as any of its products that infringe the trade dress associated with Truseal’s Edgetherm sealant/spacer systems, including Huali’s gray and black HualiSeal and Edgemax Seal sealant/spacer systems, until Truseal’s pending motion for preliminary injunction is heard and decided by this Court.” Truseal officials claim the company “will suffer irreparable harm to its reputation from confusion between an allegedly inferior Huali product and Truseal’s patented product.”

Truseal filed the suit on October 6.
“Truseal vigorously enforces its patents and trademarks throughout the world and takes all potential infringement matters seriously,” says Truseal president Gus Coppola. “More importantly, Truseal is taking this action to safeguard the industry against the mistaken use of inferior technologies that claim to offer the same level of quality and performance as Truseal’s spacer systems.”

Truseal representatives say the company is also investigating a Texas-based distributor of HualiSeal products. Welcome to the Revamped dwmmag.com


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