October 4, 2010
COMMERCIAL, RETAIL, FABRICATION : MEETINGS AND EVENTS
"Cautiously optimistic" could describe the mood at GlassBuild America: The Glass, Window & Door Expo, Sept. 14-16, in Las Vegas. Although it might be another 12 to 18 months before the industry experiences an upturn (See "Economy not headed for double-dip recession,"), positive discussion surrounded the green building and commercial retrofit markets.
"I think it's going to be a long, cold winter and the first half of 2011 is going to be very difficult," said Max Perilstein, chief marketing officer, Vitro America, Memphis, on the show floor. "But I'm very hopeful about the second half. I know a lot of people said the same thing about 2010, but I really do feel that we've hit the bottom and we're going to perk along the bottom, until we start to rise up towards the end of next year. You have people saying things are so tough, but you have other people saying maybe the worst is behind us. Just grabbing on to some of that optimism has been a good thing."
"What are my expectations for next year? That is the [big] question," said Glenn Miner, director, Construction, PPG Industries, Pittsburgh. "The expectation this time last year was that 2011 was going to be the bottom and we'd start to come back up. Now, that maybe looks like late 2011 or 2012 ... but hopefully we will slowly start climbing up."
The fundamentals of the economy and the industry remain strong, said Rod Van Buskirk, president, Bacon & Van Buskirk, Champaign, Ill. "We are a distributor; we have a retail component, residential and commercial service components, and a contract glazing component. Most areas [of the business] have held their own. It's the contract glazing side that has suffered the most," he explained. "We suffered an economic hit. This is the shakeout we always heard about."
"People are optimistic," observed Paul Daniels, vice president of sales, C.R. Laurence Co., Los Angeles, on the show floor. "I think everyone thinks the worst is behind them ... and people can start to move on with business."
For many companies, moving on involves the green building market, where energy codes will drive the use of energy efficient, environmentally friendly products.
"Codes will play an important part in shaping the industry," said Margaret Webb, executive director, Insulating Glass Manufacturers Alliance, Ottawa, Ontario. "In the next five to 10 years, the market will see 100 percent IG penetration, more dynamic glazing and improved durability. Codes will drive innovations. There will be more switchable coatings, and windows will be more than windows. Companies like Guardian [Industries, Auburn Hills, Mich.] and Sage [Electrochromics, Faribault, Minn.] are leaders in the innovation field; Guardian for vacuum glazing and Sage for electrochromic glazing."
"The use of green products will increase dramatically," agreed Mark Silverberg, president, Technoform, Twinsburg, Ohio. "The market is turning. Green is growing and gaining specificity. With the specificity, the biggest change is mentality. Architects are quantifying what they want."
And what they want is energy performance, daylighting, and the knowledge that they are contributing positively to not just the built environment, but the natural world as a whole, Miner said.
"Energy performance is huge. Daylighting is huge. The materials that are in your glass are a big thing; are there bad actors that when crushed and thrown away will hurt the environment? Regional materials [are now a consideration. People are asking,] 'do I have a great, energy efficient product that I have to ship halfway around the world? How much fuel is used in that process?' There is a lot of thought at that level, but at the end of the day when we're talking about a $100 million building, there is a financial implication," Miner said. "There is greater interest [in green building] and recognition that it provides value. The challenge to product manufacturers is how do we [supply green products] economically?"
Among the green products the industry will start to see more of are triple glazing, sunshades, light shelves and building integrated photovoltaics (See "BIPV fenestration products could generate up to half the electricity needed in the U.S.,"), said Mike Turner, vice president of marketing, YKK AP America, Austell, Ga. Dynamic glazing also is expected to play a role in green building.
Demand for green products is impacting equipment suppliers too. "Money and saving energy is becoming a concern for everybody," said Daniel Bonafini, vice president of operations, FomUSA, Medina, Ohio. "In the last year, there has been a 20 percent increase in [sales of] machines that produce energy efficient products."
"Our machines are going to be impacted by the new energy standards," agreed Bob Quast, president/CEO/CFO, Lisec America, Burnsville, Minn. "Energy standards will drive a lot of the investments. Solar is prominent, so there are a lot of dollars flowing in that direction. Lisec has a solar section catering to [that market's] needs, and we have machines that do triple glazing."
The solar market came up regularly in discussions with machinery suppliers in Las Vegas, with some citing it as an area where they've experienced significant growth. "Solar has been fantastic. Mostly, washers are keeping our feet on the ground," said Danielle Allemang, marketing manager, Billco, Zelienople, Pa. "Throughout the whole recession, solar has been up; it picked up where commercial and residential dropped off. Solar is 85 percent to 90 percent of our sales now," she said.
CRL's Sommer & Maca Machinery Division, Cicero, Ill., also saw an uptick in solar-related equipment sales. "Glass washers for cleaning photovoltaic panels are in demand. [Overall], the most demand is in the solar division [for products like] the solar conveyor," reported John Czopek, machinery brand manager.
The retrofit market
Energy concerns are a main driver behind activity in the commercial retrofit market as well, attendees reported. "For commercial retrofits, we're seeing owners deciding to renovate when they want to improve energy efficiency," Van Buskirk said.
"New code requirements play a part in the decisions being made to renovate, [specifically] safety and energy codes," said Greg Koch, sales manager, commercial windows and doors, Eastern North America, Rehau, Leesburg, Va. "A good 50 percent of our business is in replacement projects. Look at the hotel segment, for example. The owners don't want to build new facilities because there's no demand for it. However, they want to update their existing facilities. We did a Holiday Inn project that allowed them to reduce energy costs by $20,000 to $30,000 a year, plus they received a tax credit. There's a clear financial reason [for this type of renovation]."
Educating architects, and building owners and developers, about the monetary benefits retrofits can provide is crucial to the green product sale, Miner said. Financing for new construction and retrofit projects is still an issue, and owners are worried about the potential expense retrofits present. Showing them the return on investment in clear dollar amounts is important, he said.
"Some of the old glazing systems in Chicago [for example] have monolithic clear or bronze glass. If you have desks within 5 feet of that window, no one will want to sit there," he said. "I can replace that with another glass with a similar aesthetic that can provide controlled daylighting and solar performance. Now [the building owner] can get back 5 feet of space around the interior building perimeter on each floor. That's adding huge value to that building owner in terms of usable space. That's the kind of thing we need to lay out to them."