Volume 47, Issue 8 - October 2008
In the News
Huttig Closes Its
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. (See related video on SHELTER’s studio page at www.sheltermagazine.com/studio). Just three months later, employees of the Fredericksburg location are facing another serious issue—closure.
Huttig recently announced 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 $600,000 and $800,000 in operating charges related to this action during the third and fourth quarters of 2008, comprised of between $500,000 and $700,000 for asset write-offs and transfer costs, and approximately $100,000 for employee severance costs. The company expects approximately $300,000 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.
New Jersey Dealer Expands
There’s little debate that the building industry remains in a slow period. And companies are continually adjusting in terms of square footage, personnel and other forms of overhead—usually downward. It can come as a surprise, these days, when a building materials provider says it’s actually expanding; but that’s just what Kuiken Brothers Company Inc. announced recently.
The Succasunna, N.J.-based dealer, which has eight locations throughout northern New Jersey and one in southern New York, recently broke ground on an additional location in Succasunna, N.J. The new facility will be situated on a 12-acre site and will be established as a drive-through operation. Doug Kuiken, president of Kuiken Brothers, says the new facility will be equipped, not only to meet customer needs, but to give back to the community.
“This project will bring more jobs to the community and local businesses will also enjoy increased activity as another positive by-product,” he says. This includes a positive impact on the environment. “As a result of our redevelopment and engineering plan, the facility will have a positive impact on the environment and water quality,” Kuiken says.
“In addition to the new structures, there will be extensive landscaping and permanent conservation areas which buffer Horseshoe Lake.”
Kuiken says the facility also will bring life back to an old rail service that has been inactive for more than a decade. This will give back to the community by way of decreased traffic. He also says it creates a savings that can then be passed on to the company’s customers.
“One of the benefits of rail service is that it greatly reduces the number of trucks on the road,” Kuiken explains. “Rail service also allows us to purchase lumber materials direct from the lumber mills, which ensures consistent quality and keeps our costs down, enabling us to pass the savings on to our customers.”
The Wood Moulding and Millwork Producers Association (WMMPA), based in Woodland, Calif., announced several developments from its recent Summer Business Meeting, including a new name. (See personnel announcements on page 44 of People) After inviting manufacturers of PVC and composite millwork to join its ranks, the association decided to drop the word “wood” and will now refer to itself as the Moulding and Millwork Producers Association (MMPA).
“Two years ago, the membership elected to invite the PVC millwork manufacturers to our meetings,” explains Kellie Schroeder, executive vice president. “Our membership realized the moulding and millwork substrate may be different, but the same marketing, freight, human resource and distribution challenges face wood, MDF and PVC producers.”
The name change also requires the association to approach its next meeting a little differently. Educational topics for its Winter Business Meeting in Lake Las Vegas, March 2009, will now include educational topics for four types of manufacturers.
“Raw material supply sourcing and predictions for solid, finger joint, MDF and PVC mouldings cannot be rolled out in one session, obviously,” Schroeder says with a laugh. “Knowing we will have four types of manufacturers looking for education from us, we have elected to instigate a ‘wish list’ from the membership. As we grow our poly blends group (PVC, polyurethane, polystyrene, composite, plastic, etc.), we ask new members and visiting guests what their objective in attending or joining the group is. We then incorporate that feedback into our meeting sessions to entice the interest of the poly manufacturer for our next business meeting.”
Schroeder says the new blend has proven healthy for the association.
“The wood and MDF producers are intrigued by the poly blends session and vice versa,” she says. “The Poly producers sit in on the wood and MDF sessions to gain insight into what is affecting those markets, and are taking that information back to their companies to share in future marketing and business plans.”
Mississippi Goes After Price Gougers Though it’s unthinkable for most, it isn’t unheard of for some building product dealers to raise prices as a major hurricane threatens landfall in order to price gouge innocent storm victims. This occurred in Mississippi following hurricane Katrina and left many in outrage. As a result, when tropical storm Gustav began bearing down on the Mississippi coastline, government officials were ready with more than sandbags. Attorney General Jim Hood began warning retailers ahead of time that the state would not put up with price gouging.
“After Katrina, every merchant is expected to know it is against the law to price gouge,” Hood explains. “Therefore there will be no mercy on violators proclaiming ignorance of the law once the state of emergency is declared.” And penalties include more than just a fine or slap of the hand. “If you price gouge for under $500 you face six months in jail, but if you profit by price gouging for over $500, then you are facing one to five years in the penitentiary. I can assure the price gougers this time they will do time, no ifs ands or buts about it.”
Once a state of emergency has been declared, Mississippi dealers must freeze profit margins until the declaration has been lifted. Before the governor actually declares a state of emergency, Hood says investigators are already keeping a watchful eye on profits. Prior to Gustav, he says his office was already receiving complaints over increases. Hood says his office responded by sending written warnings to local retailers, including building supply companies, reminding them of regulations. The only price increases permitted include those reflecting a direct and equal increase in cost. When the storm is over, the investigation continues until the state of emergency has been lifted. Hood’s office urges good merchants and consumers to report instances of price gouging and use cameras to record evidence.
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