March 15, 2004
Decked out | Biddeford firm positions itself in the burgeoning weather-resistant composite lumber market
By Rebecca Zicarelli
York County may not be the place you'd expect to find one of Maine's most successful engineered-wood companies. Biddeford, home of Correct Building Products, is far from the Advanced Engineered Wood Components Center at the University of Maine in Orono, and far from the wealth of wood-processing companies hugging the edges of Maine's northern forests.
Even so, southern Maine suits Correct Building Products well. "We're a net exporter," says Martin Grohman, president of Correct Building. "It's cheap to ship from here, [because] Maine's a net importer. All those flatbeds are going south empty."
Correct Building Products manufactures a composite wood product called CorrectDeck, a mixture of sawdust and plastic that's extruded from an injection mold. Used for decks, docks, patios, steps and other outdoor products, CorrectDeck is tough and resilient, but it's heavy, which is why distribution and its associated costs are important to Grohman. And he has a lot of it to distribute; with the current building boom, which has consumers looking for products that require less maintenance, and consumer concerns about toxins in pressure-treated lumber, sales of wood composites, including CorrectDeck, are booming.
Correct Building Products, founded in 1999, first turned a profit in March 2001. With national distribution extending to California and sales in Japan, Correct Building Product's sales exceeded $10 million in 2003. Grohman expects sales of $20 million or more this year and $100 million within the next five to six years.
To accommodate all that growth, last year Grohman began looking around southern Maine for a larger manufacturing plant. "There's not a lot of 100,000-square-foot spaces available [in southern Maine] in big, open rooms without a lot of columns," Grohman says of the search. Finding just the right space is imperative, though, since there's so much riding on it. "There are two things we want from the space," Grohman says. "Room for growth, and space that builds customer value."
Great expectations
Grohman's first choice for a new space was the Biddeford Blankets building in the Biddeford Industrial Park, space where he could add customer value because there would be enough room to develop highly efficient manufacturing processes. Grohman says he inquired, but the space wasn't available. So in October, he purchased the Volk Packaging building, 62,000 sq. ft. of space located across the road from his current location on Morin Street, in the Biddeford Industrial Park. That same month, Biddeford Blankets laid off its workforce and shut down operations, citing more efficient plants overseas as reasons for the closure.
Grohman again inquired about the building, and is now negotiating a five-year lease with a purchase option for the building, which he describes as "125,000 sq. ft. of prime manufacturing space" that's for sale for $4.2 million. He says he expects to have the deal closed by the time this edition of Mainebiz goes to press. If it happens, Grohman says he'll have room to grow Correct Building Supplies until he reaches the next part of his expansion plan: opening another plant in Chicago in 2006 or 2007.
Buoying Grohman's expectations is the fact that composite lumber is an emerging industry. At the Forest Products Society's 2003 International Conference on Wood Fiber Plastic Composites, held last spring in Wisconsin, analysts said industry sales totaled $775 million in 2001. But that figure is still just a fraction of the $3.4 billion annual demand for weather-proof products, says Alan Robbins, president of the Plastic Lumber Trade Association. He pegs composite decking's share of the market at about $500 million, and he says the sector is growing at a 20% clip each year. "If [pressure-treated] products were performing properly for outdoor exposure, new material wouldn't have a place to go in the outdoor setting," Robbins says. "It's an opportunity for alternate building materials to get into the marketplace."
When it comes to plastic versus pressure-treated, Robbins says the question is only when wood-plastic composites will take over. The current industry leader, Trex, based in Winchester, Va., holds $190 million of the market, Robbins says. "Trex has 20% growth a year, and they're still climbing," he adds. Robbins says that for smaller manufacturers like Correct Building Products to compete in this market, they will have to "penetrate the distribution channels, virtually going toe to toe with the big boys either by lower prices or higher performance."
Grohman, for one, is convinced he's got a better product. "There are a lot of products out there that look nice, but they're not strong," he says. "There are a few that are strong, but they look like crap. We bridged that gap. Most people are looking for curb appeal. We were the first to do a wood grain."
Most manufacturers of composite decking use polyethylene ˆ the plastic used to make grocery bags ˆ and sawdust. This results in a flexible product that needs extra support and bracing if it's used in a structural application. Grohman, who learned the trade working in the extrusion labs in Cincinnati-based Milatron Inc. before moving back home to Maine ˆ- he's a native of Carthage ˆ- decided to use polypropylene, the plastic used in gas cans, Tupperware and postal crates. As a result, CorrectDeck (complete with its ersatz wood grain pattern) is stiffer and stronger, and requires less maintenance than other wood-composite decking materials.
According to Doug Gardiner of the Advanced Engineered Wood Components Center in Orono, "Polypro has better strength and stiffness. Its downside, if it has one, is that in an unprotected or un-pigmented state it's subject to [ultraviolet] degradation." Since CorrectDeck is tinted to look like wood, Grohman says UV is not a concern. Gardiner says another benefit of using polypropylene is its cost; in its virgin state, polypro is 20%-25% cheaper then polyethylene. "We've talked to a number of companies who are exploring this type of technology," Gardiner says. "By and large, the big outfits are [still] doing polyethylene because the recycled polymer is easier to find."
Developing a better decking material using polypropylene presented a number of challenges, Grohman says. "The melt temperature is high, around 400 degrees," he says. "Thermal decomposition of [the sawdust] happens at 450 degrees. It's an extremely narrow range to work with. We have to get the plastic hot enough to melt without getting the wood hot enough to darken." That, Grohman says, was just the beginning of the obstacles. "Getting the raw materials into the extruder presented challenges that just about killed us." Solving these problems led to two patents, the most recent awarded last month.
Long-term costs
That effort is now paying off. John Yazwinski, general manager of retail at Casco-based Hancock Lumber, says Hancock has decided to drop all other composite decking lines and only sell CorrectDeck. "We think he's ahead of the curve," Yaswinski says of Grohman and his product. "He's making a very good product that homeowners are proud to have and we're proud to sell. Up to now, we've carried two or three lines, including Trex and CorrectDeck, but they helped make the decision easy. They've got a good product in all the styles, colors, and options needed to take care of our customers. They've got a handrail system. They've got a solid website [www.correctdeck.com], with very good customer service coming from the company. Their quality control is spectacular. They sell through proven wholesalers. I'm satisfied it's as good a product as we can take to market."
It can cost more to build with CorrectDeck, however. At Hancock, CorrectDeck decking plank costs $1.88 per foot, compared to 82 cents for pressure-treated yellow pine, $1.04 for cedar and $1.79 for Trex. Retailers and customers have to take into account long-term maintenance costs of all those materials, Grohman says, in which case CorrectDeck is the least expensive alternative.
Tom Noble, owner of Kennebunk-based SCI Construction, a residential construction contractor, also designs and builds skateboard parks through another company, SCI Skateparks. He's a big advocate of CorrectDeck for both applications, saying CorrectDeck meets a number of criteria that are critical for building applications, including minimal expansion and contraction, durability and workability. He also likes it because it's not slippery when it's wet, it's quiet, it doesn't splinter and it's easy to clean.
"They did their homework so well in designing this product," Noble says. "I have Trex at home, and if it wasn't for the cost, I'd take it out and replace it. It's not nearly as strongˆ as CorrectDeck." The downside, Noble says, is that CorrectDeck can be difficult to frame with because it's so hard, though he says that problem will be alleviated by a new fastening system recently introduced by Correct Building.
Waste wood fiber and recyclable plastic are prime materials in composite decking, which is why Correct Building Products has twice won the Governor's Waste Reduction Award, most recently last year. But Grohman quickly discovered that building a business around the availability of waste material can be tricky.
Originally, he purchased his sawdust as a waste product from Saunders Brothers dowel mill in Westbrook. Even before Saunders consolidated its operation in Greenwood and shut down the Westbrook plant, the mill wasn't able to produce the amount of dried sawdust Grohman needed. "We've grown from using 20 tons a week to 220 tons a week," Grohman says, adding that it's hard to anticipate the price of sawdust; he was paying $40 a ton in 1999, and is currently paying $160 a ton. He says he's no longer buying direct from mills, since chasing down his supply from multiple vendors was too time consuming and the quality was too inconsistent. Instead, he purchases sawdust through brokers in Quebec and Massachusetts, and is working to establish new relationships with at least two additional brokers and with a wood pellet company to feed the company's growing appetite for dried hardwood sawdust.
Pallets have proven to be another good source of wood fiber. As Grohman points out, all those empty flatbeds leaving Maine came into the state loaded with pallets full of merchandise. "The pallets end up in Maine with no place to go," Grohman points out, so he purchases them and grinds them up as part of his wood supply.
Finding recycled polypropylene is even more of a challenge, Grohman says, because tinted plastics or plastics contaminated with food won't work. He says he's always looking for sources of worn-out U.S. Postal Service totes and the crates used by Wal-Mart. "They get beat up, but they're a nice durable polypropylene that's uncolored and makes an ideal feedstock," he says. Because the supply is limited, his mixture is currently only about 25% recycled plastic. Grohman says he's exploring the markets that might allow use of tinted plastics, particularly for structural building components that need to be strong and weather resistant but that don't show, such as the sub-sill in a doorway.
Gearing up for growth
Finding time for this kind of experimenting and innovation is Grohman's greatest challenge. "It's important to keep an emphasis on innovation," he says. "We have to continue to improve while we expand. That's difficult to do with a sold-out plant that's running 24/7. I have to go to bat for R&D projects, but they pay off." He's considering developing a material for fences, and the company has already dabbled in making siding as well as planking for playground equipment. "We're actively looking at growing playground equipment sales," Grohman says. "We're working with Creative Playthings, a Massachusetts company."
Grohman says he plans to open a second plant in Chicago within the next three years to tie into the structural building components market, such as door sills and window moldings, that is centered there. He estimates the cost of the additional facility at $2 million-$4 million, and hopes the company is large enough by then to pay for the project out of operational funds. "If that doesn't work, we've got an excellent board and an excellent group of first-round investors, and we'd go back to them for a second round," Grohman says.
Eventually, he says he has his eye on international distribution and manufacturing. But he says he's committed to keeping the company headquartered here in Maine. "Growing in a controlled manner requires the right people in the right positions," Grohman says. "Until a year ago, all the staff reported to me. But I know what I'm not good at, and I'm not good at day-to-day management. I hired someone to handle that, and it's done a lot to improve communications. My job is to get staff the tools they need to succeed and to get out of their way. Once you've built a company that's suitable for growth, it becomes easier, not harder."
Even so, southern Maine suits Correct Building Products well. "We're a net exporter," says Martin Grohman, president of Correct Building. "It's cheap to ship from here, [because] Maine's a net importer. All those flatbeds are going south empty."
Correct Building Products manufactures a composite wood product called CorrectDeck, a mixture of sawdust and plastic that's extruded from an injection mold. Used for decks, docks, patios, steps and other outdoor products, CorrectDeck is tough and resilient, but it's heavy, which is why distribution and its associated costs are important to Grohman. And he has a lot of it to distribute; with the current building boom, which has consumers looking for products that require less maintenance, and consumer concerns about toxins in pressure-treated lumber, sales of wood composites, including CorrectDeck, are booming.
Correct Building Products, founded in 1999, first turned a profit in March 2001. With national distribution extending to California and sales in Japan, Correct Building Product's sales exceeded $10 million in 2003. Grohman expects sales of $20 million or more this year and $100 million within the next five to six years.
To accommodate all that growth, last year Grohman began looking around southern Maine for a larger manufacturing plant. "There's not a lot of 100,000-square-foot spaces available [in southern Maine] in big, open rooms without a lot of columns," Grohman says of the search. Finding just the right space is imperative, though, since there's so much riding on it. "There are two things we want from the space," Grohman says. "Room for growth, and space that builds customer value."
Great expectations
Grohman's first choice for a new space was the Biddeford Blankets building in the Biddeford Industrial Park, space where he could add customer value because there would be enough room to develop highly efficient manufacturing processes. Grohman says he inquired, but the space wasn't available. So in October, he purchased the Volk Packaging building, 62,000 sq. ft. of space located across the road from his current location on Morin Street, in the Biddeford Industrial Park. That same month, Biddeford Blankets laid off its workforce and shut down operations, citing more efficient plants overseas as reasons for the closure.
Grohman again inquired about the building, and is now negotiating a five-year lease with a purchase option for the building, which he describes as "125,000 sq. ft. of prime manufacturing space" that's for sale for $4.2 million. He says he expects to have the deal closed by the time this edition of Mainebiz goes to press. If it happens, Grohman says he'll have room to grow Correct Building Supplies until he reaches the next part of his expansion plan: opening another plant in Chicago in 2006 or 2007.
Buoying Grohman's expectations is the fact that composite lumber is an emerging industry. At the Forest Products Society's 2003 International Conference on Wood Fiber Plastic Composites, held last spring in Wisconsin, analysts said industry sales totaled $775 million in 2001. But that figure is still just a fraction of the $3.4 billion annual demand for weather-proof products, says Alan Robbins, president of the Plastic Lumber Trade Association. He pegs composite decking's share of the market at about $500 million, and he says the sector is growing at a 20% clip each year. "If [pressure-treated] products were performing properly for outdoor exposure, new material wouldn't have a place to go in the outdoor setting," Robbins says. "It's an opportunity for alternate building materials to get into the marketplace."
When it comes to plastic versus pressure-treated, Robbins says the question is only when wood-plastic composites will take over. The current industry leader, Trex, based in Winchester, Va., holds $190 million of the market, Robbins says. "Trex has 20% growth a year, and they're still climbing," he adds. Robbins says that for smaller manufacturers like Correct Building Products to compete in this market, they will have to "penetrate the distribution channels, virtually going toe to toe with the big boys either by lower prices or higher performance."
Grohman, for one, is convinced he's got a better product. "There are a lot of products out there that look nice, but they're not strong," he says. "There are a few that are strong, but they look like crap. We bridged that gap. Most people are looking for curb appeal. We were the first to do a wood grain."
Most manufacturers of composite decking use polyethylene ˆ the plastic used to make grocery bags ˆ and sawdust. This results in a flexible product that needs extra support and bracing if it's used in a structural application. Grohman, who learned the trade working in the extrusion labs in Cincinnati-based Milatron Inc. before moving back home to Maine ˆ- he's a native of Carthage ˆ- decided to use polypropylene, the plastic used in gas cans, Tupperware and postal crates. As a result, CorrectDeck (complete with its ersatz wood grain pattern) is stiffer and stronger, and requires less maintenance than other wood-composite decking materials.
According to Doug Gardiner of the Advanced Engineered Wood Components Center in Orono, "Polypro has better strength and stiffness. Its downside, if it has one, is that in an unprotected or un-pigmented state it's subject to [ultraviolet] degradation." Since CorrectDeck is tinted to look like wood, Grohman says UV is not a concern. Gardiner says another benefit of using polypropylene is its cost; in its virgin state, polypro is 20%-25% cheaper then polyethylene. "We've talked to a number of companies who are exploring this type of technology," Gardiner says. "By and large, the big outfits are [still] doing polyethylene because the recycled polymer is easier to find."
Developing a better decking material using polypropylene presented a number of challenges, Grohman says. "The melt temperature is high, around 400 degrees," he says. "Thermal decomposition of [the sawdust] happens at 450 degrees. It's an extremely narrow range to work with. We have to get the plastic hot enough to melt without getting the wood hot enough to darken." That, Grohman says, was just the beginning of the obstacles. "Getting the raw materials into the extruder presented challenges that just about killed us." Solving these problems led to two patents, the most recent awarded last month.
Long-term costs
That effort is now paying off. John Yazwinski, general manager of retail at Casco-based Hancock Lumber, says Hancock has decided to drop all other composite decking lines and only sell CorrectDeck. "We think he's ahead of the curve," Yaswinski says of Grohman and his product. "He's making a very good product that homeowners are proud to have and we're proud to sell. Up to now, we've carried two or three lines, including Trex and CorrectDeck, but they helped make the decision easy. They've got a good product in all the styles, colors, and options needed to take care of our customers. They've got a handrail system. They've got a solid website [www.correctdeck.com], with very good customer service coming from the company. Their quality control is spectacular. They sell through proven wholesalers. I'm satisfied it's as good a product as we can take to market."
It can cost more to build with CorrectDeck, however. At Hancock, CorrectDeck decking plank costs $1.88 per foot, compared to 82 cents for pressure-treated yellow pine, $1.04 for cedar and $1.79 for Trex. Retailers and customers have to take into account long-term maintenance costs of all those materials, Grohman says, in which case CorrectDeck is the least expensive alternative.
Tom Noble, owner of Kennebunk-based SCI Construction, a residential construction contractor, also designs and builds skateboard parks through another company, SCI Skateparks. He's a big advocate of CorrectDeck for both applications, saying CorrectDeck meets a number of criteria that are critical for building applications, including minimal expansion and contraction, durability and workability. He also likes it because it's not slippery when it's wet, it's quiet, it doesn't splinter and it's easy to clean.
"They did their homework so well in designing this product," Noble says. "I have Trex at home, and if it wasn't for the cost, I'd take it out and replace it. It's not nearly as strongˆ as CorrectDeck." The downside, Noble says, is that CorrectDeck can be difficult to frame with because it's so hard, though he says that problem will be alleviated by a new fastening system recently introduced by Correct Building.
Waste wood fiber and recyclable plastic are prime materials in composite decking, which is why Correct Building Products has twice won the Governor's Waste Reduction Award, most recently last year. But Grohman quickly discovered that building a business around the availability of waste material can be tricky.
Originally, he purchased his sawdust as a waste product from Saunders Brothers dowel mill in Westbrook. Even before Saunders consolidated its operation in Greenwood and shut down the Westbrook plant, the mill wasn't able to produce the amount of dried sawdust Grohman needed. "We've grown from using 20 tons a week to 220 tons a week," Grohman says, adding that it's hard to anticipate the price of sawdust; he was paying $40 a ton in 1999, and is currently paying $160 a ton. He says he's no longer buying direct from mills, since chasing down his supply from multiple vendors was too time consuming and the quality was too inconsistent. Instead, he purchases sawdust through brokers in Quebec and Massachusetts, and is working to establish new relationships with at least two additional brokers and with a wood pellet company to feed the company's growing appetite for dried hardwood sawdust.
Pallets have proven to be another good source of wood fiber. As Grohman points out, all those empty flatbeds leaving Maine came into the state loaded with pallets full of merchandise. "The pallets end up in Maine with no place to go," Grohman points out, so he purchases them and grinds them up as part of his wood supply.
Finding recycled polypropylene is even more of a challenge, Grohman says, because tinted plastics or plastics contaminated with food won't work. He says he's always looking for sources of worn-out U.S. Postal Service totes and the crates used by Wal-Mart. "They get beat up, but they're a nice durable polypropylene that's uncolored and makes an ideal feedstock," he says. Because the supply is limited, his mixture is currently only about 25% recycled plastic. Grohman says he's exploring the markets that might allow use of tinted plastics, particularly for structural building components that need to be strong and weather resistant but that don't show, such as the sub-sill in a doorway.
Gearing up for growth
Finding time for this kind of experimenting and innovation is Grohman's greatest challenge. "It's important to keep an emphasis on innovation," he says. "We have to continue to improve while we expand. That's difficult to do with a sold-out plant that's running 24/7. I have to go to bat for R&D projects, but they pay off." He's considering developing a material for fences, and the company has already dabbled in making siding as well as planking for playground equipment. "We're actively looking at growing playground equipment sales," Grohman says. "We're working with Creative Playthings, a Massachusetts company."
Grohman says he plans to open a second plant in Chicago within the next three years to tie into the structural building components market, such as door sills and window moldings, that is centered there. He estimates the cost of the additional facility at $2 million-$4 million, and hopes the company is large enough by then to pay for the project out of operational funds. "If that doesn't work, we've got an excellent board and an excellent group of first-round investors, and we'd go back to them for a second round," Grohman says.
Eventually, he says he has his eye on international distribution and manufacturing. But he says he's committed to keeping the company headquartered here in Maine. "Growing in a controlled manner requires the right people in the right positions," Grohman says. "Until a year ago, all the staff reported to me. But I know what I'm not good at, and I'm not good at day-to-day management. I hired someone to handle that, and it's done a lot to improve communications. My job is to get staff the tools they need to succeed and to get out of their way. Once you've built a company that's suitable for growth, it becomes easier, not harder."
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