Expert Offers Picture of Millwork Market; Learn about Global Issues and Areas of OpportunityMarch 27th, 2012 by DWM Magazine
If you didn’t already know it, Mark Young, national sales and marketing manager, Arauco Wood Products, offered an overview of the moulding and millwork market to members of the Moulding and Millwork Producers Association who met last week in Santa Monica, Calif., and pointed out that global economics are definitely affecting the millwork industry.
“People say, ‘How can you be raising prices for millwork?’ Global economics are reflecting moulding prices here,” said Young. Yet despite those economic pressures, there are several markets in which U.S.-based companies can look to for growth.
“The fall of 2011 was worse than 2010,” he said. “But prices held through that period then increased in January and February of this year.”
Ivan Eastin, professor/director, CINTRAFOR, gave an update on global markets during the meeting and talked about China and Japan as high growth areas in terms of future building. But Young said the Russian housing stock is even older than that in China and Japan, and the country will need to address that issue so there could be future growth opportunities there as well.
South American countries, including Chile, Brazil and Argentina, are also growing at a very high rate, but Young pointed out that Arauco recently closed a millwork plant in Argentina recently.
“This shows it is not profitable at today’s prices to bring mouldings there,” he said, and added that the plant’s location 800 miles from the Port accounted for high transportation costs.
Young also noted that while there is excess capacity in the market, Arauco is continually pressured to increase capacity.
“We can’t hire a shift and then let the workers go when times get slow,” he said. “It has to be sustainable. We need to be a good neighbor in the communities where we have plants.”
Here in the United States, Young echoed the reports from other analysts who say that in the United States, the repair and remodeling market remains strong, and that what growth we are seeing in housing starts, is mainly attributed to the growth in multi-family units.
“Repair and remodeling moulding consumption will outpace new construction until 2014,” he said.
He also noted the preference of builders and contractors toward pre-finished products as a value-added benefit.
“Maybe when we start building again we won’t have that push for pre-finished [products],” said Young. He also reported that 35,000 trucks are being filled monthly in the United States and Canada. Of that 65 percent is shipped to big box stores and 35 percent to independent pro chains. Fifty percent of those mouldings are fingerjoint, 44 percent, MDF and six percent solids.