ProBuild reveals list of closures
ProBuild Holdings, which confirmed last Friday that it was closing 20 of its units across the nation, announced 16 of the locations late Monday. The closures include lumber yards, component facilities, gypsum yards, and millwork facilities in both large and small markets, the Denver-based company said.
“Some of these locations are being consolidated with other locations nearby, while others are being mothballed until the construction industry conditions improve,” the prepared statement said. “Those facilities can be restarted quickly once we see a turnaround.”
The lists of 16 closures include:
Newberg, Ore., lumberyard Auburn, Wash., framing business Sequim, Wash., lumberyard Sacramento, Calif., lumberyard Phoenix, Ariz., truss facility Poway, Calif., retail home center Cottonwood, Ariz., lumberyard Orem, Utah, lumberyard Jackson, Wis., lumberyard Gainesville, Va., millwork and windows facility Dry Ridge, Ky., truss facility Franklin, Tenn., components facility Augusta, Ga., framing/gypsum facility Jacksonville, Fla., lumber/gypsum/millwork North Charlotte, N.C., lumberyard Easton, Md., gypsum.
The company pointed to two line-of-business closures:
National City, Calif., truss plant only Waldorf, Md., truss plant only.
The remaining four closures are “pending,” according to ProBuild’s announcement. No timeline was given for the shutdown, but vendors told Home Channel News they were asked to remove their inventory by the end of the year. In Poway, Calif., a retail-oriented home center was already holding a 30% off clearance sale last weekend.
Looking ahead at LBM
Having lumber orders to fill and not enough inventory on the ground may sound like a dream to LBM dealers right now. But that day may arrive sometime in 2015, according to a forecast by Henry Spelter, an economist with Forest Economic Advisors. Reduced capacity, increased demand from China, the pine beetle infestation in Western Canada and other factors will combine to raise the prices of softwood lumber as supplies tighten.
“The crunch is more likely to come after the [housing] recovery,” said Spelter, who recently retired as an economist for the Forest Products Lab of the USDA Forest Service. While closed mills are pretty typical during a downturn, Spelter pointed out that this time around, “It wasn’t just the smaller mills. Many of the larger mills have also been closed. So we’re [permanently] shrinking capacity.”
Shipments of U.S. softwood lumber are down by 41%, or 4 billion ft., Spelter said. Eastern Canada has reduced its capacity by 5 billion ft. since the housing slowdown, and Western Canada has shrunk its output by 3.5 billion ft.
The situation in British Columbia is complicated by several factors, including U.S. tariffs, which may make China a more attractive market. B.C. mills used to send 70% of their output to the United States, but that number has been reduced to 50%, according to Spelter.
And then there’s the pine beetle. While the “beetle kill” has peaked and loggers are now salvaging what’s left, the shelf life of dead trees remains unknown. With British Columbia accounting for 20% of North American lumber supply, there’s bound to be a ripple effect on pricing by 2015, Spelter said.
Taking the long view, Spelter looked into a future where housing starts are once again at 1.5 million units—with 20% less lumber available. “That’s when the crunch will come,” he said.
WELCOME TO THE SUMMIT
More than 170 people attended the ProDealer Industry Summit in Orlando, Fla., last month. Vendors rubbed elbows with executives from ProBuild, Stock Building Supply, Builders FirstSource, BMC Select, Do it Best, Orgill, LMC and dozens of independent dealers.
The educational program was also a big draw, opening with a housing forecast from National Association of Home Builders economist David Crowe and ending with a coast-to-coast survey of November’s House and Senate races by Michael O’Brien, president and CEO of the National Lumber and Building Material Dealers Association, which cosponsored the event with Home Channel News.
In today’s business climate, there can’t be too much knowledge or networking. In that spirit, the following pages bring you the highlights.
Big green, little green
Attendees at the ProDealer Industry Summit witnessed the two extremes of green residential building Oct. 15 in a rare showing of eco-friendly homes that bridged the gulf between Platinum LEEDs and entry-level production. Despite differences in price and style, the green homes flashing across the screen that morning featured many of the same energy- and water-saving design devices and appliances. The builders behind the presentations—Tony Callahan of Beazer Homes and Josh Wynne of Josh Wynne Construction—have both been recognized as pioneers in the residential green movement.
The biggest difference between the two men is that Callahan has never heard the phrase “Cost is not a concern” from any of his customers. Wynne, on the other hand—well, let’s just say his clients are willing to pay a little extra to help out the environment.
“[Our goal] is to make green affordable to the average homeowner,” said Callahan, who serves as senior VP national purchasing, planning and design. After a long collaboration with energy experts, building scientists and a nationally recognized green home builder in San Antonio, Beazer developed its eSmart series of “high performance” homes that, according to a National Association of Home Builders Research Center study, are up to 47% more energy efficient than comparably sized houses built 10 to 15 years ago.
Beazer debuted its eSmart homes last July in Duluth, Ga.
Besides spray foam insulation in the attic and wall cavities, low-E windows and sealed ducts, the base eSmart package includes water-saving bath fixtures, CO detectors, low-VOC paint and carpet, high-grade MERV 10 air filters, programmable thermostats, energy monitors and CFL bulbs throughout the house. Additional enhancements available include tankless water heaters, radiant barriers, dual-flush toilets, fresh-air ventilated ducts and native landscaping.
Although other production home builders are also offering energy-efficient homes, “There’s no single national home builder who’s recognized as a leader in this space,” Callahan observed. But a look at the map of the United States on Beazer’s Web site shows that the Atlanta builder has been constructing eSmart homes around the country: They’re now in 29 communities.
In stark contrast, Wynne Construction builds only a few homes a year. Wynne lives in Sarasota, Fla., and most of his projects are in that region. He takes on only green, sustainable building projects, and has won numerous awards for his work. Wynne’s innovative use of reclaimed and recycled materials—he makes a lot of the trim, molding, countertops and other materials himself—is truly impressive.
But what might have amazed the audience most of all was Wynne’s position on chain-of-custody certification requirements for FSC-certified wood.
“For what it brings to the project, it’s a lot of trouble,” Wynne said of FSC-certified wood. “I only use it when it’s mandated.”
Wynne, who won the 2010 U.S. Green Building Council Outstanding LEED for Homes Project of the Year award, also addressed the issue of builders and architects who choose their materials based on what they’ll contribute to a project’s overall LEED score. “The people who are chasing points are the people who are [only] chasing a market. In the future, they’ll weed themselves out,” Wynne said.