Building a Future for Distributors and Dealers of Building Products

Volume 44,  Issue 3                                        April 2005

     In the News

Study Shows Consolidation of Pro Dealers

Harvard University’s Joint Center for Housing Studies has released its first paper in its building products distribution study, Residential Supply Chain in Transition: Summary of Findings from Survey of Dealers. The purpose of the study is to understand the changes that are occurring or likely to occur for the distributors, manufacturers and customers of residential building products. A key goal of the research is to test theories of changes within residential building product distribution. 

According to the study, consolidation among retailers serving do-it-yourself homeowners and smaller remodeling contractors began two decades ago, and consolidation among pro dealers serving builders, remodeling contractors and residential subcontractors is now beginning to gather momentum. The rise of the large national homebuilders has given rise to changes in the distribution channel for residential building products. Having to negotiate with an increase in suppliers and having to carry more products and improved technology are other reasons for consolidation, the study reported. One result of this change is that the large builder customers are gaining purchasing power and are thus more able to negotiate low margins and additional services and influence the product lines that a dealer carriers.

With the customer base of the pro dealers is shifting to the large volume homebuilder, more than half of their sales were to homebuilders who buy materials for at least 25 homes a year. According to the study, the two largest building product dealers, Home Depot’s and Lowe’s, reported sales of almost $85 billion in 2002, accounting for 32 percent of the total market revenue. 

Builders Support Bills That Affect the Building Industry
Four bills introduced on February 10 by Rep. Charlie Norwood (R-Ga.) could improve the enforcement of the Occupational Safety and Health Administration’s (OSHA) many rules and regulations among small business owners, according to the National Association of Home Builders (NAHB).

Of particular note to home builders are H.R. 739, the “Occupational Safety and Health Small Business Day in Court Act,” and H.R. 742, the “Occupational Safety and Health Small Employer Access to Justice Act.” H.R. 739 would allow OSHA to give businesses more than 15 days to respond to a citation, and H.R. 742 would make it easier for companies to recover attorneys’ fees when they successfully defend themselves against a citation.

H.R. 740, the “Occupational Safety and Health Review Commission Efficiency Act,” would add two more administrative law judges to the three-member Occupational Safety and Health Review Commission (OSHRC), which hears appeals of violations. At its current size, the commission frequently delays hearings because it does not have a quorum, according to information from NAHB. The measure is designed to address this problem.

H.R. 741, the “Occupational Safety and Health Independent Review of OSHA Citations Act,” would require judges to defer to the OSHRC when OSHA cases are appealed to the courts.

The four bills are identical to OSHA reform measures passed by the House last spring. 
Also on February 10, the Senate approved legislation that would help curb class action lawsuits that NAHB says drive up the cost of housing. The “Class Action Fairness Act of 2005” was passed by the House on February 17 and signed into law the next day by President Bush. The law will move into federal court class action lawsuits involving more than $5 million in damages and defendants or plaintiffs who live in multiple states. 

Burns, Morris & Stewart Becomes FrameSaver®
Burns, Morris & Stewart L.P. of Nacogdoches, Texas, has announced a re-branding strategy that includes changing its name to FrameSaver. The initiative facilitates a focus on growth and expansion and emphasizes the core strengths and philosophies that have been the foundation of the company since its beginning, according to a company release.

“We are known as much for our corporate image as we are for our lead product: FrameSaver door frame ends,” said Rick Hagel, FrameSaver president and chief executive officer. 

“To alleviate confusion, we feel it is important to communicate our frame-saving solutions in our overall brand identity.” 
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SierraPine and Aconcagua Timber Announce Sale
SierraPine, based in Roseville, Calif., and Aconcagua Timber Corp., of Franklin, Va., have jointly announced SierraPine’s sale of its Moncure, N.C., plant site to Aconcagua Timber. The Moncure plant consists primarily of particleboard manufacturing. SierraPine recently closed a medium-density fiberboard line at the site. 

According to the news release, Aconcagua Timber will establish its corporate headquarters in Moncure. The company has two other composite panel operations in North America, including a medium-density fiberboard plant in Clarion, Pa., and its particleboard plant in Franklin, Va. 

SierraPine purchased the Moncure plant sites from Weyerhaeuser in May of 1999 along with several other plants. A newly established sales office at the plant will handle sales for the company’s Adel, Ga., facility with back-up support from SierraPine’s California headquarters.
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Key Communications Named GlassTech Asia Official Sales Agent
Key Communications Inc., the Garrisonville, Va.-based publisher of SHELTER, USGlass, and Door & Window Manufacturer magazines, has been named the official sales agent for North America for GlassTech Asia 2005. The show is scheduled to take place November 30-December 2, 2005, at the Impact Arena Exhibition and Convention Center in Bangkok, Thailand. 

GlassTech Asia is expected to have more than 98 percent of its previous attendees returning to be a part of the 2005 event. Attendance is expected to increase from the more than 14,400 attendees that were a part of GlassTech Asia 2003.
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PGT Launches Ad Campaign for Impact-Resistant Windows and Doors
PGT Industries, the Venice, Fla.-based manufacturer of WinGuard® impact-resistant windows and doors, has launched a television advertising campaign to increase brand name awareness and educate consumers about the advantages of impact-resistant windows and doors. 

The 30-second television ad debuted in October 2004 after Hurricanes Jeanne, Charley and Ivan stormed through Florida. 

“Windows tend to be a low-interest item for consumers. They often just do whatever their contractor recommends,” said Julie Heinsman, vice president, marketing. “But given the unusual storm activity we’ve had, homeowners are thinking more about windows and hurricane protection. We want homeowners to ask their contractor about impact-resistant windows and doors.” 

According to senior brand manager for WinGuard, Cara Dohnalek, PGT has almost doubled its projected growth for WinGuard impact-resistant windows and doors products so far this year. Dohnalek added that the company has received a lot of positive response to the ads. The ads continue to run in 2005.
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Window Products is now Cascade Windows
Window Products Inc. has announced a new brand identity: Cascade Windows. The company, which is headquartered in Liberty Lake, Wash., has plants in Spokane, Wash., and Salt Lake City, distribution centers in Spokane, Boise, Idaho, Auburn, Mich., and Salt Lake City, and more than 400 dealerships throughout the Western United States. It has been producing vinyl windows and doors under the Window Products name for more than a quarter of a century. 

According to Mark McVay, vice president of sales, the change is in name only with no affect on the management and ownership of Cascade Windows. “The name ‘Window Products’ effectively represents an industry, but not necessarily our company. Changing our brand to Cascade Windows allows us to effectively communicate our value. It eliminates confusion with other window brands and the general perception among our customers that the name ‘Window Products Inc.’ is too generic. Focusing the brand on our core series will raise product recognition and perception even higher.” 

The company has long been associated with the ‘Cascade’ name as the crown of its three series of vinyl windows. 

“Most of our customers are already familiar with this series name,” noted McVay. “What will remain unchanged is the legacy of superior service and value our customers have always relied on.” 

Cascade’s new website is located at www.cascadewindows.com

Vetter Windows Seeks Projects for Fifth Annual VIP Awards
Vetter® Windows & Doors of Mosinee, Wis., has announced the continuation of its annual national design contest, the Vetter Inspired Project (VIP) Awards, for architects and custom builders across the United States.

Cash prizes of $1,000 are awarded in six categories:
• custom home more than 8,000 square feet; 
• custom home 5,000 to 8,000 square feet; 
• custom home 3,000 to 5,000 square feet; 
• custom home less than 3,000 square feet;
• best residential renovation; and 
• best commercial project, new or renovation. 

A “Best of Show” winner, chosen from the category winners, receives an additional $1,000 grand prize. Each winner also receives professional photography of their project, marketing assistance and recognition at the 2006 International Builders’ Show. There is no fee to enter the contest.

The deadline for entering a project is July 1, 2005. All submitted entries will be judged by a select group of leading custom builders, architects and editors. Official entry forms and full contest rules are available at www.vetterwindows.com. 

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