The innovation and entrepreneurial skill of some Ontario companies is being put to the test as they bring an array of new composite building products onto the North American market in an attempt to take business away from lumber companies.
Woodfibre plastic composites, or WPCs, combine renewable materials such as woodfibre with plastic to make products that replace wood. In many cases the plastics and the fibre are recycled material. Agricultural fibre such as hemp and flax also can be used.
WPCs are the fastest-growing area of the plastics industry and the fastest-growing area of construction materials, according to Stephane Baffier, director of the Canadian Natural Composites Council (CNCC). Although the upfront cost is higher, WPCs are more durable and require less maintenance than wood.
This hot area of the economy is growing at a rate of 25 per cent per year. In 2004, sales were $1 billion US in North America. Most Canadian companies hope to sell their products in the United States, if they are not already doing so.
|Photo courtesy of Wellington Polymer Technology|
|Ontario companies have found a hot market for their composite Enviroshakes, which grace the house above.|
Wood pressure-treated using chromated copper arsenate has been phased out in North America for health and environmental reasons, leaving a gap in the market for WPCs. The 30-month-old CNCC was formed by the plastics industry to be the national voice of the emerging industry.
"Canada right now is really at the forefront in this business," Baffier says. This is the result of companies pioneering new products and processes, as well as the technical expertise available from university researchers, such as those at the University of Toronto's Centre for Biocomposite and Biomaterials Processing.
Decking has been the mainstay of the emerging industry for some time and accounts for about two-thirds of the WPC market. The biggest player in North America is Virginia manufacturer Trex Co. Inc. The company was formed by a management team from Mobil Oil, which was looking for a way to recycle plastic grocery bags, says Frank Maine, a Canadian plastics consultant and WPC manufacturer.
The company was formed in 1996, Maine says, and by 2003 was selling more than $200 million annually in WPCs, mostly for decking.
Many smaller Canadian manufacturers are in the decking market, which Baffier says is getting clogged, so manufacturers are looking to create other construction products. Baffier adds that he expects mergers and buyouts as large lumber companies with established distribution channels attempt to enter the market.
Maine and Baffier say WPCs can replace other products such as door panels, windows and siding.
One company staying clear of decking is Maple-based Avesta Profile Systems Ltd., which is focusing on rails and fencing. The company incorporated in 2002 and uses in-house technology, says Brian Duggan, director of sales and marketing. The product, which comes in a range of colours, is "more elegant than cut two-by-fours," Duggan adds.
Avesta entered the U.S. market this year and anticipates 70 per cent of its future sales will be there, Duggan says.
"Every month you start to see more companies getting into (the emerging industry)," he says. "People that have been into plastics before see that the future is in composites."
Jim Nash, president of Wellington Polymer Technology Inc., agrees. "This industry is about to take off in a huge way," he says.
|Photo courtesy of Wellington Polymer Technology|
|Some styles of Enviroshakes.|
The Chatham-based company's only product is the successful Enviroshake, a composite roofing material that comes with a 50-year guarantee.
"We chose roofing, a knockoff cedar shake product, because nobody else was doing it," says Nash, whose company was started in 1998. The enviroshakes are made from recycled tractor tires, industrial plastics and wood flour. It took $500,000 and 30 months to get product approval in North America, Nash says, along with millions more to develop the product.
The highly automated Enviroshake factory produces about $3 million in product annually, Nash says. In 2003, 22 per cent of sales were in the United States, but last year that increased to 50 per cent. The company goal is sell 80 per cent of its production in the U.S.
Wellington Polymer is partnered with the same U.S. distribution company that handles Trex. The product has been featured on Bob Vila's Home Again on TV and in Popular Mechanics magazine.
Nash says the company will soon double production and expects to be at triple last year's level by the end of this year. The company is being restructured to secure financing for the expansion.
"We're sold out until September," says Nash.
Guelph innovator Frank Maine is taking on the decking market. The company he started, PSA Composites Inc., holds the patent on the process and composition of a new wood-like product that Maine believes is superior to others on the market.
"The first ones did the pioneering. We're coming in with a nice base established and we can grow much more rapidly," says Maine, who has a doctorate in organic chemistry.
|Photo courtesy of Maryam Mansouri|
|Avesta Profile Systems concentrates on railing and fencing in its niche.|
He also was the Liberal MP for Wellington from 1974 to 1979.
The process uses orientation technology, which is a way of stretching the molecules to make them stronger and stiffer.
Baffier agrees that Maine has a second-generation product, because the density is much lower than other WPCs and it more closely resembles wood.
While higher oil prices have also meant the price of plastic has risen, Maine says recycled plastic from the automotive industry that is currently sent to landfills can be used. Biobased plastic, such as that made of corn, also can be used.
In order to commercialize his WPC, Maine turned to U.S. investors and his business card now lists him as chief technology officer, rather than president and CEO.
Canadian investors, he says, are risk-averse.
The first manufacturing line licensed to produce PSA's product opened last year in Missouri. A second licensee expects to open this month in Washington state, although the contract has not yet been signed.
Maine expects trim produced by the company to be on the market this year, with decking to follow in January 2007.
"The licensee has 5,000 pounds of scrap woodfibre an hour and that translates to 130 million pounds of our product a year," Maine says.
The product and process is patented in Canada, the U.S. and 12 European countries.
"What I'm trying to see is some of that industry in Canada," Maine says. "I'm very frustrated with going to the United States."
The Ontario Ministry of Agriculture has provided $1 million over four years to develop a way of using agricultural fibre to produce Maine's product and the University of Guelph is taking the lead on this project.
Maine expects this business will be developed in Ontario, with a plant in Guelph.
"It's running in parallel with the work we're already doing, so the work we're doing now is going to show us the pathway," Maine says.
(Janet Baine can be reached at firstname.lastname@example.org)