Building a Future for Distributors and Dealers of Building Products

April 2006                                Volume 45,  Issue 3

In the News   A Dealer's Perspective
WTO Sides with U.S.Lumber

Coalition for Fair Lumber Imports chairperson Steve Swanson applauded reports that the World Trade Organization (WTO) has again sided with the United States regarding the appropriateness of applying duties against subsidized and dumped Canadian lumber.

“This latest victory once again confirms what every objective observer knows. Canadian lumber is heavily and unfairly subsidized and dumped into the U.S. market,” Swanson explained. Swanson further commented that, “I am hopeful that Canada will now work with the United States towards achieving a fair and permanent solution to this dispute.”

“This case demonstrates yet again that the United States is rightfully applying anti-subsidy and anti-dumping duties against unfairly traded Canadian lumber, and should continue to do so despite faulty and biased North American Free Trade Agreement (NAFTA) panel decisions,” he added. “The United States has prevailed at the WTO in all three aspects of this trade case—subsidies, dumping and threat of injury to the U.S. industry,” Swanson stated.

Commenting on the February 14th hearing on the lumber dispute before the Senate Commerce, Science and Transportation Subcommittee on Trade, Swanson stated that, contrary to erroneous press releases issued by the American Consumers for Affordable Housing, “The [more than] 1 million workers in the lumber and woods products industry, and the [more than] 10 million private timberland owners across the United States whose lives are impacted by the harmful effects of unfairly subsidized and dumped Canadian lumber care deeply about having the U.S. trade laws fully enforced.” 

Swanson added, “While to some this issue may be a play on numbers, for this American industry, it is a matter of survival.”

At the same hearings, the National Association of Home Builders (NAHB) gave another view to the dispute and called on the Administration and Congress to adopt and follow free-trade policies and to fully consider the impact of lumber trade constraints on American consumers, stating that unwarranted lumber tariffs needlessly harm housing affordability and distort the marketplace by acting as a hidden tax on American home buyers.

Barry Rutenberg, president of Gainesville, Fla.-based Barry Rutenberg Homes, and a member of the executive committee and board of directors of the NAHB, said that trade restraints impose an unreasonable burden on U.S. home buyers and on the industries that depend on adequate, affordable supplies of lumber to provide the housing, home improvements and other vital goods and services the nation needs.

Testifying on behalf of NAHB, Rutenberg said that lumber trade barriers “boost housing costs, prevent scores of families from qualifying for a mortgage, increase inflation and place U.S. manufacturers of value-added wood products at a competitive disadvantage.”

An NAHB press release reports that duties on Canadian softwood lumber imported into the U.S. are currently being collected at a rate of approximately 10 percent, down from a recent high of 27 percent. However, unanimous verdicts by several NAFTA panels have found no threat of injury from Canadian imports, which is the legal justification required for the duties to be imposed.

Rutenberg called on the Administration to adhere to its legal obligations and implement those decisions that have invalidated the lumber duties and stipulated that the U.S. Customs Service must refund the billions of dollars collected from Canada.

 “The fact is,” he said, “more U.S. jobs depend on lumber than produce lumber. Housing and related industries that use softwood lumber employ more than 5 million American workers. Overall, American workers in lumber-dependent jobs outnumber workers in lumber-producing industries by more than 25-to-1.”


Fortune Brands to Acquire SBR Inc.

Fortune Brands Inc. has announced that it has agreed to acquire SBR through a tax-free merger. The acquisition includes the home products brands of SBR, including Simonton Windows®, SimEx™, Fypon®, Hy-Lite® Products and Dixie-Pacific™.

Operations will continue as they have in the past at the SBR home products subsidiaries with no planned employee cutbacks or facility closings as part of the merger. Fortune Brands intends for SBR and each of its subsidiaries to continue running independently, with support from its $4 billion home and hardware business that includes the faucet brand Moen, MasterBrand Cabinets, Therma-Tru, a brand of residential entry doors, the padlock brand Master Lock and Waterloo, the manufacturer of tool storage products.

Sam Ross founded SBR Inc. in 1972 as a privately-held holding company with a half dozen investors, all of whom are still shareholders today. SBR began offering stock to many of its employees in 1981. Today SBR has more than 300 shareholders.

“We’re exceptionally pleased that this merger is designed to keep all our employees working and every one of our facilities operating,” said Ross, chairperson and chief executive officer (CEO) of SBR Inc. “We have a strong bond with many communities throughout the country where our operations play an important role in local economies. The acquisition of SBR by Fortune Brands will help strengthen our commitment to operating in these geographical areas.

Fidelity, Laird Norton Finalize Sale of Lanoga

Fidelity Capital, the business development arm of Fidelity Investments, has finalized the transaction, previously announced on January 6, 2006, to purchase Lanoga Corp., the nation’s third largest professional building materials dealer, from Laird Norton Co. LLC. 

Fidelity made the purchase through Pro-Build Holdings Inc., a newly-created entity that includes the Strober Organization, the sixth largest professional building materials dealer in the United States. With the purchase of Lanoga, Pro-Build’s resources comprise more than 420 locations in 38 states with more than 14,000 employees and projected 2006 revenues in excess of $5 billion. 

Laird Norton chief executive officer Jeffery S. Vincent called the sale a well-timed and beneficial move for both Lanoga and the more than 400 Laird Norton family members. “We believe this sale makes sense to ensure the next phase of Lanoga’s development and its continued ability to serve the professional contractor market. As a well-capitalized company, Fidelity can provide Lanoga with expanded scale and flexibility to continue to grow and serve its customers.”


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