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Market Snapshot: Building & construction

One year ago, IMM’s coverage of this market highlighted the promising increase in housing starts, which had risen to a 17-year high. Proving to be more than a random blip, this year’s U.S. Dept. of Commerce figures indicate that housing starts are now at their highest levels in 20 years, verified in a recent statement from Commerce Secretary Donald Evans. July saw an increase of 8.3% over June, along with a 4.5% increase over July 2003. While mortgage interest rates have increased slightly over the past 12 months, the strong showing in 2004 indicates the increases have not cooled demand (see Figure 1).

Less clear is the impact that the strong housing market will have on the injection molding industry. Many of the now-traditional vinyl products used in new home construction and remodeling are produced via extrusion, including doors, windows, and siding. In addition to the fittings and fasteners associated with these products, however, opportunities for molding exist in newer applications such as molded siding and roofing panels, as well as in molded wood plastic composites (WPCs) for shutters, decking products, and architectural accents.

Nailite International (Miami, FL), for example, produces high-definition polypropylene siding panels molded to create realistic cedar, brick, and stone finishes. At up to three times the thickness of extruded siding, the UV-treated panels resist sun, rain, and insects. Molded roofing tiles from EcoStar (Mundelein, IL) are made from recycled plastic and rubber. Products have up to a 50-year lifetime, and can be installed via conventional methods.

A major home products manufacturer recently specified an injection molding grade of BASF’s Luran S (ASA) for glass frames used in decorative home entryway doors. The material replaces extruded profiles and features higher resistance to UV, yellowing, and warping than traditional materials. It also features thermal stability, color retention, and a wide range of coloring options. Builders and homeowners whose tastes have evolved toward weather-resistant, low-maintenance products drive demand for molded plastics in these and other building applications. Robert Bulla, sales and marketing manager for custom molder Atlas Precision (Arden, NC), notes that companies such as Trex and others who produce WPC decking are, in part, fueling this trend by conducting effective marketing campaigns.

“We started in this market four years ago,” Bulla says, “and it now represents 60% of our business, with the major increases in the past two years. Commercial acceptance of WPCs in building products is growing, and there’s a need for decorative accessories. Marketing campaigns have taught builders and consumers what WPCs are, and have created demand for the products.” While WPC decking is extruded, molding opportunities lie in the need for accessories such as post caps and skirts that must be impact modified for installation and need to weather at the same rate as the decking material.

Atlas recently began making white wood-composite parts for the building and construction industry, overcoming the challenge of dark wood fibers. “Few have tried to mold a white wood composite because it doesn’t come out white enough,” Bulla says. Together with a colorant company, Atlas developed a proprietary colorant formula that makes the wood fiber filler white and yet retains the wood-like texture, looking like painted wood (see photo).

According to Jim Morton, senior partner with Principia Partners, an Exton, PA-based consulting firm for raw materials and manufactured goods industries, 20 million lb of WPCs are consumed annually in North America for injection molding, with almost 80% of that total falling into the building products category at a value of $25 million to $26 million.

“Companies need molded parts to supplement decks and railing systems,” Morton says, “and this demand is still growing. This is a category where molders in the U.S. can differentiate themselves with some degree of investment and time spent on the learning curve.” Principia estimates WPCs for injection molding by 2008 will reach a value of $350 million, with more than 50% of that growth in building products.

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