by Sarah Schmidt
June 20, 2018
“We celebrate that the lights are back on in Terre Haute,” said Allura CEO Jessica Navascues earlier this month, as the company re-opened its fiber cement manufacturing facility in Indiana. Allura originally purchased the plant from CertainTeed in 2014 and then immediately closed it, citing weakness in the US housing market. The company now estimates that the facility could employ up to 150 employees when fully operational, churning out fiber cement siding panels and shakes, trim, and soffit for the growing Midwest market, which in 2017 captured 12% of total US demand.
With such expansions growing increasingly common cross-industry, value demand for fiber cement products is expected to grow more than 5% per year and exceed $2 billion in 2022.
Allura is not the only company looking to expand its fiber cement manufacturing capacity in response to the strengthening US housing market. James Hardie, the largest supplier of fiber cement products in the US, plans to re-open a manufacturing facility in Summerville, South Carolina that it had shuttered in late 2008 in the wake of the housing crisis. The company expects to hire 100 workers for the plant and invest $15 million in building renovations. Additionally, in June 2017, James Hardie announced that it would construct a new fiber cement manufacturing facility in Prattville, Alabama that is expected to begin production by the end of 2018.
Not only has fiber cement benefited from the ongoing recovery of the housing market, its increased adoption as a siding material has supported gains as well. The share of the siding market held by fiber cement has grown steadily over the past five years, as the material has been increasingly specified for its:
Fiber cement manufacturers expect these advances to continue going forward. For example, James Hardie anticipates further siding market gains at the expense of alternatives like vinyl and natural wood. In order to meet this goal, the company is launching an ad campaign to educate consumers about the quality of fiber cement products, as well as outreach programs geared toward contractors.
Some fiber cement companies are also taking aim at the high-end residential and commercial siding markets, where fiber cement has traditionally played a very limited role. For example, James Hardie’s REVEAL line of premium commercial siding has registered strong gains in recent years, while its newer ARTISAN and ASPYRE products target the residential market. Nichiha is another notable manufacturer of higher-end commercial siding through its ILLUMINATION brand, an extremely durable product that is also easy to install. While the share of the high-end siding market held by fiber cement will remain small, the material’s ability to effectively mimic higher value products such as natural wood and stone will nevertheless offer growth opportunities for manufacturers.
However, fiber cement siding demand will face pressure from engineered wood siding, another material that convincingly mimics more upscale materials. While both fiber cement and engineered wood offer better durability and fewer maintenance requirements than natural wood, engineered wood products are generally less expensive, lighter, and easier to install than fiber cement. Engineered wood siding products are making strides in overcoming the stigma associated with them due to performance issues with the first versions to hit the siding market, which will increase its formidability as a competitor to fiber cement going forward.
For more information about the US fiber cement market, check out Fiber Cement in the US, a new study from the Freedonia Group.
Nick Cunningham is an Industry Analyst at the Freedonia Group where he covers the US and global construction and building products industries.
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