Composite decks: where the living is easy

What began as a search for a way to recycle polyethylene grocery bags has emerged a US$700-million market. The growth of wood-fibre plastic composites (WPCs) in building products has outstripped original estimates of 11% annual growth, proposed by Principia Partners (Exton, PA) in 1999, in its groundbreaking report “Wood Composites and Plastic Lumber in North America – 1999”. Principia’s most recent figures, released in April 2003, put WPC growth at 26% annual growth since 1998.

Demand for WPC and natural fibre composites reached 1.3 billion lb. in 2002, valued at US$700 million, according to Principia. A moderate slowdown to 14% annual growth is forecast for the period from 2005 to 2010.

That’s good news for North American WPC producers. At Composatron Composite Technology (Toronto), the vice-president business development is optimistic about his company’s prospects for 2004 and 2005. Composatron is a licensee of the Strandex extrusion process, and produces deck board and railing systems.

“This market has lived up to the hype, and surpassed it,” says Drew Knox. “We expect to double our sales this year — again. The deck board market is up, railing systems are way up.”

On the retail side, Hubert Robitaille, lumber and building materials buyer with the Reno-Depot/RONA chain of home improvement centres, says the growth in wood alternatives has been more than 30% per year. RONA carries two Canadian wood alternatives: Brite Manufacturing’s Life Long composite decking and a recycled plastic lumber from Cascades Re-Plast called Perma-Deck.

“I would expect at least the same growth (this year), or better, because the products are getting better.”

Consumers: the next frontier

In addition to the product improvements, distribution of composite decking is becoming more broad. Many producers are expanding their sales efforts to the DIY (do-it-yourself) sector. Until recently, composite deck products were sold primarily through lumberyards catering to contractors. Trex, for example, which professes to be North America’s largest manufacturer of alternative decking, and is one of the pioneers behind the development of WPC decking, claims its product is available at 3300 contractor-oriented lumber yards in the U.S. and Canada. For 2004, however, Trex will also be sold at Home Depot stores in select markets, and will be available by special order at all Home Depot stores.

This will allow Trex to reach “a whole new set of consumers and contractors,” says Trex Co. chairman and CEO Robert Matheny. “By joining forces with the world’s leading home improvement retailer, we believe we can dramatically accelerate the conversion from wood to composite decking, and further our goal of establishing Trex as one of the most recognized brands of residential outdoor living products.”

There’s another new twist in the WPC market. As the number of producers escalates, brand awareness will become a factor.

“Retailers are becoming more familiar with the products, and carrying two or three lines, plus consumers are demanding more choice,” explains Knox.

The next step for many WPC extruders is to broaden the product line to encompass “complete outdoor living spaces” — railings, benches, planters, fences and tables with a common design theme, from a single brand.

“Right now, we’re really focussing on 2005,” says says Jim Pratt, general manager and operating partner of Composatron. “Our objective is to have a complete Premier brand outdoor environment. We’re developing a range of products for both front porches and back yard decks.”

Warranty also seems to be a key selling point for composite outdoor products. Knox suggests that “because it’s a relatively new industry, people want some reassurance that this premium product will perform as expected.”

Composatron recently extended its warranty to 20 years for both its deck and railing products. The industry standard is 10 years.

Looking beyond the back yard

In the railing segment, RONA’s Robitaille suggests competition from other materials may dampen growth. “Some of the railing products do have good growth, but not at the same rate (as decking) because customers are also buying PVC, aluminum, wrought iron or glass railings to complement their deck.”

Building products, specifically decking and railings for both residential and commercial installations, are the major market for WPCs, accounting for almost two-thirds of North American demand in 2002, reports Principia. Several other end uses – shingles, siding, window profiles, patio furniture – are also pegged for growth of 20% per year or more by Principia.

“For siding and siding accessories, a new technology developed by Boise is expected to compete with cellular vinyl and other specialty trim products,” says a Principia press release from 2003. “WPC window profiles made of polyethylene or PVC are less costly than current window materials – vinyl and wood. In addition, they are more durable than wood and more aesthetically pleasing (less glossy) than vinyl.”

Possibilities for WPCs do go beyond building products. Principia’s 2003 report lists applications in automotive (interior panels, head liners, spare tire covers, ducting, rear shelves, seat backs and truck floors); infrastructure (boardwalks, docks, marine pilings, railroad ties and sound barriers); and industrial and consumer markets (garden structures, pallets, crates, totes, playground equipment, park benches and tables, trash cans, cable reels).

Speaking at the International Conference on Woodfibre Plastic Composites (Madison, WI, May 2003), Jim Morton of Principia Partners noted that PE-based composites are dominant (83%) among WPCs, followed by PVC-based offerings (9%) and PP-based products (7%). Among producers, Trex has 22% market share. Brampton, Ontario-based Nexwood places among the the top ten producers with 4% market share.

Morton summarized the threats to the marketplace as follows:

– An ever-increasing number of suppliers will generate price pressure. Rivalry for market share will intensify, and branding will be very important to compete in decking, railing and shingles.

– The supply of plastic recyclate will not be able to meet demand, so some producers have already elected to use virgin resin.

– Producers must begin to look beyond decking/railing for growth. Alternative materials’ share of the decking market is projected to reach 25%.

– New additive chemistries and composite formulations are needed to expand the range of applications, and to enhance performance.

However, with 14% growth on the horizon, wood-plastic composites are still a market with great potential.