Valuable Information in Spring Door and Window Industry Update

Michael E. Collins of Jordan, Knauff and Company, an investment banking firm that specializes in the door and window industry, delivered its Spring 2007 Window and Door Industry Update yesterday. In the webinar, Collins talked about some trends affecting the door and window industry.

Water penetration is becoming as or more important than wind-borne debris in coastal areas, and large suppliers and manufacturers have started selling on an installed-basis-only to control results. There's an increasing emphasis on working with large networks of window installers to ensure uniform quality of installation. And 40 percent of home improvement projects begin with an internet search.

In an industry overview of doors, Collins reported: there is a higher threat from imports than windows; doors have consistently-increasing emphasis on aesthetics; high-end entry systems can cost $50,000; and window manufacturers have begun to consider importing doors to sell though their existing channels.

The National Association of Home Builders is still forecasting recovery in the second half of this year, but builders are reporting a decrease in sales and an increase in cancellations. A changing ethnic composition that favors groups with larger households was identified as a growth driver.

Some strategies Collins named for the current environment include:

  • Improve software and information technology systems;
  • Improve quoting and ordering systems;
  • Talk to production, sales and administrative employees;
  • Achieve maximum flexibility in processes;
  • Cross-train your workers;
  • Implement just-in-time processes;
  • Develop better bid- or service-costing;
  • Study other companies and interact with them;
  • Work to become the "supplier of choice"; and
  • Be relentless on operational excellence and efficiency.

Collins also addressed the issue of "going green." He says the green movement is very trendy right now and it's gaining momentum. However, he also suggests that Americans are usually not willing to pay extra strictly for green characteristics.

Some of the largest transactions of the last quarter in 2006 and the first quarter of 2007 included the buyout of International Aluminum Corp. by Genstar Capital, the buyout of ThermoView Industries Inc. by Management Team and Atrium Companies' purchase of North Star Vinyl Windows and Doors.

There have also been significant expansions by Jeld-Wen, Wausau Window and Wall Systems, Crystal Window and Door Systems, Window Solutions Group, VPI Quality Windows and CraftMaster Manufacturing Inc.

Collins gave an update on China and says that sometime between 2008 and 2009 the country will experience a full-blown banking crisis.

China-to-U.S.-shipments have grown 19 percent from 2004 levels, and U.S.-to-China-shipments have grown 2 percent over the same period.

Research and development (R&D) spending in China has seen a 20-percent annual increase, where as the United States has only increased by 4 percent. Collins says that China's R&D spending will surpass the European Union in 2011 and the United States in 2014.

A lot of information (difficulties, savings, etc.) regarding offshore producing, owning a factory offshore and offshore purchasing direct was also discussed.

Read more about Jordan, Knauff and Company's Spring 2007 Window and Door Industry Update in the June issue of DWM.


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