Special Report – Wood-Plastic Composites: Decking still rules

Even using conservative estimates for market growth, the future for wood-plastic composite (WPC) decking products is rosy. Increased supply is fueling increased competition in the North American market, and the “Big Box” home centres are stepping into the distribution chain. Both of these factors are poised to reduce the purchase cost for the consumer, making WPC products a more attractive choice.

And, as if things weren’t looking rosy enough, the pressure treated lumber industry has succumbed to the black cloud of environmental suspicion. Pressure treated wood is the leading decking material, but for the next few years U.S. producers will be in transition as they implement alternative means of treating lumber. In February, the industry made a voluntary decision to end the use of chromated copper arsenate (CCA) in virtually all residential uses by Dec. 31, 2003. Residential uses include play structures, decks, picnic tables, residential fencing, patios and boardwalks.

“There is an opportunity here for WPC”, says Jim Morton, an industry expert and a director of the market research firm Principia Partners. “But don’t expect wood treaters to lay on their backs. They have alternatives.”

The ban on CCA wood is restricted to the U.S., but its repercussions are already being felt in Canada. Several building supply stores are already planning to stock wood treated with alkaline copper quaternary (ACQ).

Bagnall’s Building Supplies of Charlottetown, PE, began selling an ACQ-treated wood called Eversafe in April. “We have had a number of phone calls from customers who are concerned about the CCA preservative. Even though the CSA has approved pressure-treated wood in Canada, from my point of view, the whole issue will be consumer-driven,” explains Mike Wood, purchasing manager. Wood notes that ACQ-treated wood currently costs about 25% to 30% more than CCA-treated products.

SELLING COMPOSITES IN CANADA

There is mixed response to wood-plastic composites decking products among Canadian retailers. Wood reports that Bagnall’s does not sell the composite products because they are too expensive. Similarly, Dave Sawkins, purchase manager, lumber, for Curtis Lumber in Burnaby, B.C. says his store carries the TimberTech line of WPC products, but may discontinue selling them because of the premium price.

On the other hand, Dave Morton, national marketing manager for Castle Building Centres, is encouraging his stores to educate themselves about WPC products and to encourage consumers to consider them as an alternative to pressure-treated lumber.

“Right now in Canada, composite wood only represents about 2% of the marketplace. It’s virgin territory.”

Has Castle encountered resistance to the higher cost? “Not if retailers sell it right. If you look at the total application, and that means everything from deck posts, cement, fasteners, steps, joists, beams, etc. … the premium is only about 30%,” says Morton.

Another selling point for composite or plastic decking products is the availability of corresponding railing systems and fencing systems. Bud Bootier of the market research firm Pure Strategy notes in his report on this marketplace: “Decking and fencing have historically been separated by both skill sets and distribution channels. The development of plastic and composite decking and fencing materials is drawing these products together by creating a coordinated outdoor environment package.”

Recently, Bootier has found disparity in the response of “big box” stores to WPC products. “Some “big boxes” have said they can’t get a bite on it; others can’t keep it in stock. Typically, if consumers compare it side-by-side, they quickly talk themselves into it. As consumer awareness increases — and it is still very low — I would expect do-it-yourself interest to increase.”

Considering past and projected growth rates, and current market conditions, Principia Partners forecasts a growth rate of 15 to 17% for WPC over the next few years in the building products market. This segment includes decking, fencing, siding, roofing, window lineals and dimensional lumber.

The growth forecast in Bud Bootier’s Strata Report, released in 2000, are more optimistic (see table at left).

With files from Elena Opasini, Editor, Centre magazine.