Tecnoglass Digs Deeper Into U.S. Market by Investing $25 Million Into VinylAugust 30th, 2023 by Drew Vass, Executive Editor
- The company announced Monday it will manufacture and sell vinyl windows (having previously offered only aluminum).
- Earlier this month, it relocated its global headquarters from Barranquilla, Colombia, to Miami.
- Officials expect to begin shipping vinyl products by the end of November 2023.
Tecnoglass announced Monday that it will begin manufacturing and selling vinyl windows (having previously offered only aluminum). The company expects to begin shipping vinyl products by the end of November 2023, selling through existing dealers and distributors. Officials for the Miami-based company said the move will more than double its market potential.
Vinyl products will be manufactured at the company’s facilities in Columbia, then imported into the U.S., Tecnoglass CEO José Daes told [DWM]. The company has signed a long-term supply agreement to procure vinyl profiles from a global manufacturer, which it will use to produce custom-sized products with its own insulating glass.
Daes told [DWM] the company began weighing the option of adding vinyl windows at the start of 2023.
“We’ve been looking into this, making the numbers and researching the market, and we finally reached an agreement with a supplier of vinyl profiles, and bought machinery that’s supposed to arrive in September and October,” Daes said. “By the end of November, we’ll be ready to serve the market.”
Assembly of vinyl and aluminum products are “completely different,” Daes pointed out. As a result, the company had to invest in new machinery for welding and assembly. Santiago Giraldo, chief financial officer, said the company has so far invested $25 million into its new venture, which, in addition to new product lines, includes investments into a new, fully automated insulating glass line, plus capital expenditures in land and warehousing. “These investments should allow us to scale up our vinyl window opportunity to approximately $300 million in annual revenues over time,” Giraldo said.
Vinyl products will be sold through existing distributors and dealers, but the company expects to add to its base in order to reach new markets, Daes said, including in Florida, north of Orlando, where customers have been asking for vinyl.
“All of our clients have been asking us, ‘Why don’t you supply me with vinyl, too?’” he said. “They’ve all been buying vinyl from our competition. Finally, we decided that we’re ready to give it a go.”
At the same time, the move is expected to open opportunities in Georgia, Louisiana and Alabama, he suggested, adding, “It opens the full U.S. to us.”
“The vinyl window market provides a great opportunity to further expand our revenue base,” Giraldo said. “We expect this new initiative to deliver an attractive margin on our highly efficient, vertically integrated platform, driving accretive benefits to our results. As with previous investments, we expect a very high return on invested capital and a short payback period, backed by a strong order book to begin deliveries by year end and our active marketing of these products to our existing dealer base and new potential clients.”
Earlier this month, Tecnoglass announced the relocation of its headquarters from Barranquilla, Colombia, to one of its existing facilities in Miami. Officials said the move is expected to bolster continued growth in the U.S., which currently accounts for more than 95% of its generated revenues. Plans are also underway to purchase land for a new showroom and executive office over the next 12 to 18 months. The company’s existing corporate offices in Barranquilla will continue to serve as an operational and administrative hub.
According to officials, over the past decade the company has experienced substantial growth in the U.S. In Q2 2023, it reported that total revenues rose 33% to $225 million. Facility investments are expected to expand operational capacity by 40%, to $1 billion in annual revenues, according to its latest financial reporting.