When Stu Kemper first pitched the concept of composite decking materials, one potential investor likened the product to an animatronic elephant from Walt Disney World. “He said, ‘It looks like an elephant and it sounds like an elephant, but it's just plastic, and that's what you've got here,'” he says. Now president of Wilmington, Ohio–based TimberTech, Kemper calls the WPC industry's success the “Revenge of the Plastic Elephant.” Category Shift “The industry came from nothing 15 years ago to more than $1 billion today,” Kemper said at the recent Wood-Plastic and Natural Fiber Composites Conference in Baltimore. “We have a once-in-a-lifetime opportunity to be part of a sizeable category shift.” That is, as technology improves with regard to graining, color retention, and resistance to environmental factors, the WPC category is gaining market share over pressure-treated lumber.
“We've found that customers are aware of composite materials, but they're confused about which product offers which benefits,” says Christopher Grandpre, president of Richmond, Va.–based Archadeck. “That gives us the opportunity to leverage ourselves as experts in the industry.” More than half of the materials used by Archadeck are composites, compared with just 32.9% PT lumber, Grandpre says.
Rising Expectations Industry representatives spent the conference assessing new technologies to address concerns such as mold, stain- and scratch-resistance, and the need for a high-quality material at a midrange price.
Meanwhile, the segment may have a bumpy economic road ahead. John Baugh, managing director of investment company Stifel Nicolaus, says that with rising inflation, lower consumer confidence, retreating housing starts, and high energy prices, the market shows signs of a downward trend.
But the outlook among conference attendees was positive, particularly since composites are geared toward remodeling and replacements. Baugh and Kemper anticipate WPCs to account for as much as $2 billion of the decking industry within five years.
“Despite all the doom and gloom, the WPC category is well positioned to outlast the housing slump, and chances to convert the category are healthy,” Kemper says. “It's the industry's responsibility to continue communicating the benefits of these products.”
In 2004, wood-plastic composites carried just 19% of the $4 billion decking market (about $790 million), according to industry manufacturer TimberTech. Company president Stu Kemper anticipates that market share to reach 42% by 2010, accounting for $2.6 billion of a $6.3 billion market. The chart at right shows the penetration of WPC decks in six regions across North America.