Building materials rebound thanks to residential construction spike
by Ted Carter
Published: June 14,2013
COLUMBUS- Brickyard executive Ed Thebaud hasn’t seen much to signal a rebound in the brick and tile business in Mississippi and other Southeastern states. But he says he is encouraged to see some of the lingering gloom of Mississippi’s construction materials sector erased by new companies ready to set up shop here, expand here or even restart operations shut down amid the building slump four years ago.
“I don’t know exactly what they’re looking at,” said Thebaud, general manager of Columbus Brick Co. He theorized, however, that “so much has gone away that they now are seeing an opportunity to replace capacity.”
A most likely driver, Thebaud said, is multi-family residential construction, a sector that he noted is up 26 percent nationally.
“In Mississippi, we’re seeing the same thing,” Thebaud said.
Next year, multi-family is expected to climb 36 percent nationally, he said.
Unfortunately for Columbus Brick Co., Mississippi’s last remaining brick and tile manufacturer, multi-family builders are prone to product switching and increasingly rely on stucco and wood, he said, though he is confident his sector at some point will thrive again.
“We like to think brick is timeless,” Thebaud said.
As 2013 got underway, commercial construction economist Anirban Basu predicted much of the construction expansion nationally will be associated with private financing. Signs are some of that is occurring in Mississippi, according to Buddy Edens, president and CEO of Mississippi Associated Builders and Contractors.
“It’s been really interesting that we have seen some small private projects go out,” said Edens, whose organization in Mississippi and nationally represents non-union “open shop” contractors and builders.
“Not only the banks but the private investors are starting to do some stuff.”
In a welcome change, he said, “There seems to be more projects out to bid right now.”
Looking at increases of around five percent in overall building materials costs, Edens said he is hardly surprised in the new interest in Mississippi from building-supply companies. “This is to be expected as demand grows,” he said. “I think it is why suppliers are coming back into the state.”
Above all, Edens added, “This is a good indicator for the Mississippi economy.”
Thebaud said he thinks prolonged production slowdowns have led to a decline in capacity that companies plan to fill by starting operations in Mississippi. Among them are plywood panel maker Natron Wood Products and fiber-based insulation maker Roxul Inc.
“I don’t know exactly what they’re looking at,” Thebaud said, though he theorized that “so much has gone away that they now are seeing an opportunity to replace capacity.”
Oregon-based Natron Wood Products is making a $10-million investment in setting up operations in a vacant 250,000-square-foot building in Louisville. It plans to hire 200 workers as it begins making plywood panels.
Todd Alberts, attorney for Natron Woods, said in an interview last week that the company, which operates as Jasper Wood Products in Jasper, Ore., had been looking at Mississippi for a while. A combination of persuasiveness on the part of the Mississippi Development Authority and a belated rise in demand led Natron Woods to make the investment, Alberts said.
Roxul Inc., subsidiary of Denmark-based Rockwool International and a manufacturer of stone wool insulation products, recently announced a $130-million investment to build and equip a plant in Byhalia, where it plans to put 150 people to work.
The plant in the Chickasaw Trail Industrial Park in Marshall County will be Roxul’s first in the United States. Trent Ogilvie, president of Roxul, attributed the expansion to double-digit sales growth throughout North America. “The new facility will will ensure we can meet our customers’ growing demands in North America,” he said in a press statement.
Meanwhile, Shamrock Plank Flooring, a division of Shannon Lumber, has been in the state since 1983 and is expanding manufacturing operations into a 62,900 square-foot facility formerly occupied by Stylecraft Lamps in Hernando. The manufacturer of high-end hardwood flooring plans to hire 25 workers for the new plant. Its main Mississippi operation is in Horn Lake, where the company has 140 employees.
Shamrock’s need to meet rising demand for hardwood boards brought about the decision to invest $1 million in the Hernando expansion, said Jennie Brown, administrative officer.
“We’re sending it all around the country,” she said in an interview. “Our customers are large distributors.”
This week, ceiling tile maker CertainTeed announced a revival of operations in Meridian at a plant it shut down in 2009 after commercial orders dropped off significantly. The restart and $24-million upgrade of the plant’s equipment will put 110 people to work over the next three years. The company says it hopes to resume operations in the second quarter of 2014.
CertainTeed, based in Valley Forge, Pa., is a division of French building supply conglomerate Saint-Gobain. It decided to invest in reopening and modernizing the Meridian plant after increased product demands created a tightening of capacity at the other plant in L’Anse, Mich, said Skip Skaggs, director of existing business for the Mississippi Development Authority
“That gave them the signal that this recovery does have legs,” he said.
While not directly related to construction materials, the furniture and home furnishing sector is making investments in Mississippi, a circumstance Skaggs attributes at least partly to increased building.
Mississippi expansions in the sector announced this year include Advanced Innovations East, a subsidiary of Sleep Innovations. It said last month it will invest $4 million on a 108,000-square-foot expansion in the Martin North Lee Industrial Complex in Baldwyn. The company expects to hire 50 workers.
The new expansion includes a warehouse and distribution facility, and will focus on the development of new products using the company’s memory foam technology, the MDA says.
United Furniture Industries said in late May that it will expand operations at its manufacturing facility in Nettleton. The project represents an investment of $277,000 and will add 100 jobs to its workforce of 400 employees.
The company makes upholstered furniture including chairs, recliners, sofas and love-seats, sectionals and more. It is the exclusive U.S. manufacturer of Simmons Upholstery. The company also has two manufacturing facilities in Okolona, and one manufacturing facility and a distribution center in Amory.
Ashley Furniture is adding a new location with a move into a 275,000-square-foot facility on a 35-acre site in the Tupelo-Lee Industrial Park South in Verona. The company will use its new Verona plant, formerly occupied by Morgan Fabrics, to manufacture sleepers and mattresses. It expects to hire 60 workers.
Ashley also maintains manufacturing operations in Ecru and Ripley that employ more than 3,000 people.
Skaggs said his agency will continue to focus on industries that are in some fashion complementary to the state and region’s timber industry,
The string of new plant announcements and expansions developed slowly over the past few years. Skaggs said the first indications of a change came when companies ceased layoffs, followed by adding a lot of overtime. “Then we heard from companies that they were considering capital investments,” he said.
Before long, companies such as Natron Wood Products began expressing interest in a new plant. In this instance, Natron settled on the former Georgia-Pacific plant in Louisville.
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