LP announces cost-reduction measures
Louisiana-Pacific Corp., a leading supplier of engineered wood products and other building materials, has announced a plan to reduce its capital spending to $25 million a year for the next several years.
“LP is now in the midst of a right-sizing effort to reflect current business conditions,” said company CEO Rick Frost. For comparison’s sake, he noted that the capital spending for 2008 is expected to reach $170 million.
Among the planned actions are a 14 percent cut in the salaried workforce, approximately 200 positions. Flight operations have been shut down, research and development has been “put into hibernation,” and IT operations are now in “maintenance mode,” Frost said. Marketing and sales expenditures have been reduced, and salaries have been frozen.
Taken together, these initiatives should save Louisiana-Pacific between $30 and $35 million a year, Frost said.
Over the past several quarters, the Nashville, Tenn.-based company has also curtailed operations at four oriented strand board (OSB) mills and taken downtime at other production facilities.
On Nov. 4, Louisiana-Pacific reported a third-quarter loss of $100 million. Sales declined to $389.6 million from $472.5 million during the same period last year.
Former Chase-Pitkin building to house True Value store
A former Chase-Pitkin Home and Garden store in Penfield, N.Y., will have a new tenant this spring, according to the Democrat and Chronicle newspaper. A True Value store—called Beyond Hardware True Value—will occupy a portion of the building beginning in March.
In October 2005, it was announced that Chase-Pitkin, a chain of 14 garden centers in the Rochester area, was closing its stores. Wegmans, the Rochester-based food store chain and parent company of Chase-Pitkin, cited big box competition as the reason for the closings.
Beyond Hardware True Value will occupy 21,000 square feet of the 47,000-square-foot building, including 3,000 square feet of outdoor space. Owners Matt Shapiro and Jim Marsh believe the area has a void when it comes to smaller home improvement stores. Shapiro said if the store is successful, they plan to open five to seven more stores in the Monroe County area in as many years.
Report: Slow growth expected for windows and doors
United States market demand for windows and doors is expected to reach $40 billion in 2012 – that’s a slower pace than the 2002 to 2007 period, but still a gain of 2.8 percent annually, according to the Freedonia Group.
Several factors are working to restrain demand, including low residential construction. Housing starts in October sank to the lowest level since tracking began in 1959. Residential construction constitutes the largest market for windows and doors, according the Freedonia report, the 461-page “Windows and Doors.” While a modest recovery is expected through 2012, Freedonia expects the level of housing completions to be only slightly higher than in 2007. Another challenge for window and door sales is the decline in average floor space per new housing unit, leading to home construction requiring fewer windows and doors.
The picture for windows alone is more promising, as increased interest in energy efficiency contributed to the projected gain of 3.7 percent per year through 2012. Metal windows are expected to show the biggest growth in demand.
Looking specifically at doors, projections are for 2.4 percent growth through 2012. Plastic doors, according to Freedonia, will show the most rapid gains in demand, with an anticipated annual rate of 4.9 percent.
Wood windows and doors will continue to account for the largest share of overall window and door demand, totaling 41 percent in 2012. Through 2012, however, demand for wood products will dip below the average pace, primarily due to the high cost of wood products compared to plastic items, according to Freedonia.
“Wood products are increasingly seen as high-end products that increase the values of the structures in which they are installed,” the research company said in a statement.