Composite wood deck maker Trex Co. is preparing to enter new markets beyond its recently launched recycled polyethylene pellet business, which just became fully operational with four lines in service.<\/p>\n
The Winchester, Va.-based company went on an engineer-hiring spree to bolster its research and product development and some of their work could be on the market next year, Trex Chairman, President and CEO Ronald Kaplan said in an Aug. 3 quarterly conference call.<\/p>\n
\u201cWe\u2019ve got other projects in the pipeline that are equally or more exciting than pellets,\u201d Kaplan said. \u201cTrex has become a technological powerhouse in our view and it\u2018s going to be bringing some exciting things to the table. When we\u2019re ready to talk about them, we will.\u201d<\/p>\n
Kaplan, who is retiring, hinted during his last call about what\u2019s on the drawing board for Trex, which is the No. 11 pipe, profile and tubing extruder in North America, according to Plastics News\u2019<\/em> ranking.<\/p>\n Trex had a record-setting second quarter with net sales up 13 percent to $136.8 million compared to the prior year. Net profit was $18.7 million. For the first half of 2015, net sales were up 16 percent to $257.8 million and net profit was $36.3 million.<\/p>\n Kaplan said some of the new products Trex will release will be in composite wood decking and railing, where the company has more than a 40 percent share of the market, but others are unrelated to that core business and the new pellet business.<\/p>\n \u201cWe have quietly assembled a team of over two dozen engineers whose mission is to advance our technical lead in manufacturing efficiency and product innovations,\u201d Kaplan said. \u201cThis team is developing the next generation of composite decking and will propel us further into new industries.\u201d<\/p>\n The products in development outside of decks and pellets will probably be released first \u2014 sometime next year. Trex will have to add capacity to bring all of the projects to market, Kaplan said.<\/p>\n \u201cWe bought land and we\u2019re going to need it,\u201d he added.<\/p>\n Trex has been growing at a 12 percent rate and the budding pellet business is expected to start adding to the bottom line in the third quarter. Company officials have said pellet sales should reach $50 million to $80 million in three to four years.<\/p>\n \u201cWe told you it would begin to move the needle in the second half of the year and we stand by that,\u201d Kaplan said. \u201cNothing has changed our view. The number of customers we\u2019re adding and sales we\u2019re adding are entirely consistent with our expectations.\u201d<\/p>\n Trex has moved its price for PE pellets with the fluctuating resin market but Chief Financial Officer James Cline said other concerns have taken precedence.<\/p>\n \u201cGo back and look where virgin polyethylene was at the end of the second quarter \u2014 I think it was $1.09 a pound \u2014 and since that time it dropped to low of 55-60 cents a pound and now I think it\u2019s up to about 80 cents a pound,\u201d Cline said. \u201cOur price has moved relatively consistent with that change but quite frankly we haven\u2019t been really focused on driving that price up as the market firmed up.<\/p>\n \u201cWe want to get people using these pellets. With only one line in production through a good share of the second quarter of this year, we were limited in our ability to supply products, so getting those customers lined up and testing the product and qualifying it was more important than making a couple extra pennies on it.\u201d<\/p>\n In decking and railing, Trex is outpacing the composite wood market. Kaplan said the company\u2019s market share exceeds 40 percent compared to 30 percent when he started in 2008.<\/p>\n \u201cOur target is 50 percent,\u201d he added. \u201cWhat\u2019s more important is that composites are taking share from wood. The category is taking share and we\u2019re growing within the category.\u201d<\/p>\n His guidance for trailing 12-month sales through the end of the third quarter is $428 million.<\/p>\n","protected":false},"excerpt":{"rendered":" Composite wood deck maker Trex Co. is preparing to enter new markets beyond its recently launched recycled polyethylene pellet business, which just became fully operational with four lines in service. The Winchester, Va.-based company went on an engineer-hiring spree to bolster its research and product development and some of their work could be on the […]<\/p>\n","protected":false},"author":58,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[5572],"tags":[],"supplier":[4826],"class_list":["post-27545","post","type-post","status-publish","format-standard","hentry","category-bio-based","supplier-trex-company-inc"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/27545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/58"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=27545"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/27545\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=27545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=27545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=27545"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=27545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}