DWM - June2006

Volume 7 Issue 6 June 2006

Gaining a Competitive Edge Through Use of Composites
by Tara Taffera

While fiberglass seems to be getting all the buzz as the emerging alternative material, another material segment that is growing slowly are composites.
Although composites and hybrid materials only account for 1 percent of the market according to industry studies, their sales are expected to grow as manufacturers look for a way to differentiate themselves in an increasingly competitive market.

Bill Thornton, president and chief executive officer of Integrated Composite Technologies (ICT) in Atlanta, says, “‘composites’ is becoming a buzz word,” though some might not be quite sure what exactly makes up a composite material.

Breaking it Down
Thornton defines composites as, “two or more dissimilar materials that combine to make a new material.” He points out that composites are created by man—not nature.

“People don’t realize that metal is a composite,” he says.

This emerging material category would also include wood plastic composites (which has exploded in the decking and fencing market), fiberglass, hardboard, particleboard, medium density fiberboard and others (for more on these materials, see sidebar, page 73).

In the case of ICT, the company offers private label OEM parts to manufacturers such as Eagle Windows and Doors. So, according to Thornton, while Eagle may use composites in its windows, the consumer won’t necessarily know this material is in the product.

“For example, a manufacturer might choose to replace an aluminum stiffener [with one made of composites] to improve the R-value of the window,” he says.

Thornton says there are many reasons a manufacturer may choose to use some type of composite product in its windows. This includes: improved product performance, price point reduction and ease of manufacturing.

“Manufacturers using composites have done so to address a particular issue,” he says.

These may include a way to cut costs or a way to prevent rotting.
For example MDF is less expensive than wood, says Thornton. In the case of wood plastic composites, Thornton says these are rot- and insect-resistant and do not warp so the advantages outweigh the costs.

“In the case of Eagle Windows, their product will outlast wood by 100 percent,” he says. “It will last forever.”

So what are composites’ biggest competitors?

“Composites are displacing wood due to rot issues, etc., and is encroaching on aluminum. It has not yet displaced fiberglass,” says Thornton.

Manufacturers Using Composite Products
Since the composites market is so small, there aren’t a great deal of manufacturers currently using these materials. And while they do have many benefits, they don’t come without constraints. Greg Proscia, senior vice president for Silver Line Windows says his company “has dabbled into the composites market.”

It started producing aluminum and vinyl windows made of polypropylene for its basement hopper windows approximately one year ago. The process uses injection molding which is a new robotic technology that offers labor savings, according to Proscia. In addition, this process eliminates corner welding.

However, it does not allow the use of custom sizes which is why Silver Line uses it for its standard size basement and hopper windows.

“Very few manufacturers use this technology because the capital expenditure is extreme in the beginning. It also pulls a lot of energy,” says Proscia.

So much so that the company is considering moving production of these units to North Carolina where power is less expensive.

“The capital expenditure is in the millions,” he says. “You have to have the business to pay it back. We move hundreds of thousands in basement hoppers in three sizes so it makes sense for us.”

Although there is an extreme cost Proscia adds, “The labor savings is enormous.”

Two other major window manufacturers that offer windows made of composite materials, include Andersen and Windsor.

The first offers Renewal by Andersen which uses Fibrex® material. According to the company, “this breakthrough composite combines the strength and stability of wood with the low-maintenance features of vinyl.” Fibrex material is a blend of wood fiber and a specially formulated thermoplastic polymer that’s resistant to changes in temperature, contracting minimally in heat or cold.

Andersen adds that the material also resists decay and prevents against rotting.

Windsor Windows started a composite product back in 1996, its all-cellular PVC foam window, the Legend Series.

“We developed the cellular PVC foam window because we needed a middle-market product that would perform well in high moisture areas throughout the Southeast, particularly in coastal regions,” says Mike Crook, Legend Series product manager for Windsor’s North Carolina plant.

He says the product has grown rapidly since its initial introduction. The windows come with a 25-year warranty and Crook says the product will not rot, warp or crack and offers superior R and U values.

Another company, FrameSaver, offers a wood door frame made of a wood composite material that is made from a combination of recycled sawdust and virgin plastics. According to company literature, the technology is so resistant to moisture and insects that the frame is guaranteed for life. The company adds that the frames cost only “fractionally more than traditional wood frames with long-term savings.”

“Everyone is trying to find a new alternative material,” says Proscia.

And whatever that blend of material may be, it’s clear that this is just another way for companies to attempt to gain a competitive edge.

Economic Outlook
Door and window manufacturers are always looking for ways to differentiate themselves among a growing competitive landscape, and some may be looking toward composites. “Composite panels provide enumerable possibilities as component parts to a vast array of products and new applications,” according to Thomas Julia, president of the Composite Panel Association (CPA).

All three product groups represented by the CPA–medium density fiberboard (MDF), particleboard and hardboard–have been used in the manufacture of doors for years. “The growth in exterior and high-end architectural doors utilizing specialty composites engineered for these demanding applications has truly been exciting.”

The CPA represents approximately 95 percent of composite panel production in the United States, Canada and Mexico. It also represents many of the major suppliers and customers of industry products and operates third-party laboratory testing and certification programs for industry products.

Industry Performance and Forecast
The CPA reports that, after a robust year in 2004, last year’s performance was mixed.

“While there are still many exciting opportunities in how composite panels can deliver performance and value, there were definitely some challenges last year regarding the strength of the North American industry. Companies will have more tough decisions to make in 2006 as we take steps to improve our competitive position,” says Julia. Shipments of particleboard were down 4 percent while shipments of MDF and hardboard were up 5 and 4 percent, respectively, in 2005.

Particleboard continues to suffer from the loss of furniture manufacturing in lieu of imports. Coupled with higher costs for wood, resin, energy and freight, profitability was mitigated. On the other hand, the MDF recovery in 2004 was sustained in 2005 as demand remained strong in key end-use segments like moulding and laminate flooring. Thin MDF also gained market share, particularly in the door, furniture, fixture and cabinet industries. According to Julia, hardboard shipments into the siding and trim markets were fueled by the record number of housing starts in 2004 and 2005.

The CPA estimates that the downward trend in particleboard will continue in 2006, with a further decrease in shipments by 6 percent. Further rationalization may be needed to bring supply closer to current demand. The MDF forecast calls for a 4-percent increase over 2005 in North American shipments, with particular growth in thin MDF. For hardboard, the siding market is expected to cool somewhat with lower housing starts and, when combined with replacement by MDF in other applications, the CPA predicts a slight 2-percent decline in overall shipments.

Competitive Landscape
Julia adds that in the long term both producers and customers face serious competitive challenges. These include:

• Offshore imports of finished goods;
• Loss of secondary manufacturing, such as furniture and components;
• Raw material shortages due to increased use of wood fiber as an energy source;
• Rising energy costs; and
• Ongoing regulatory initiatives on air quality and product emissions.

Moving the Industry Forward
The CPA is very involved in advocacy efforts and legal intervention to protect the interests of the composite industry. As an example, Julia points to the California Air Resources Board ATCM initiative, which seeks to limit formaldehyde emissions from particleboard, MDF and hardwood plywood (see related article on page 18). This effort will also affect all the finished products made with these substrates like doors and millwork.

Julia says the CPA is committed to a business plan that will make the industry more globally competitive. This includes a more proactive approach to lowering product emission–an approach that is currently underway in the industry’s Environmentally Preferable Product certification program and revision to the industry’s ANSI product standards.

“We have a powerful message to share regarding product excellence, value and environmental stewardship,” he says. “Companies throughout the value chain must unite in order for the North American composite panel industry to remain competitive, prosper and grow.”

Tara Taffera is the publisher and editor of DWM magazine.