AMERICA SIX YEARS LATER

On the Canadian market since 2001 as a distributor of the Thiover polysulphide sealant for all of North America, Fenzi North America has posted brilliant growth rates ever since it set out on this adventure. It is now looking to the future with fresh enthusiasm.
We spoke to Dave Denevish, General Manager of Fenzi North America.

Mr. Devenish, in few years Fenzi North America has reached a very interesting development, especially connected to polysulphide sealants. Which are the results of 2006?

You are correct, we have shown to find a solid spot in the North American sealant market since our opening of our production facility in Toronto, Ontario in July 2004.

Results for 2006 were positive, as we continue to market our products and materials in the US and Canadian insulated glass market. We showed sales growth of over 15% in 2006, even as some local markets showed a downturn.

It has been widely reported by most on the decline of the North American Housing market – residential construction has slowed thru the second quarter of 2006 and continues thru 2007. It has been reported that new home construction is down in some area’s as much as 50%.

There are many area’s in the US and Canada that this is not the case as many of our customers report strong business climate. For example;

There are many area’s in the US and Canada that this is not the case as many of our customers report strong business climate. For example:

• The Western Canadian region continues to be in a “boom’ period with strong residential growth. The Alberta economy continues to be strong and shows no signs of slowing.
• The same can be said for certain pockets of the US – mainly in the South West – Northern California and Texas for example continue to show strong business growth.
  

That being said, the commercial market in North America continues to show strong growth – many expect commercial growth to continue through 2008, which bodes well for our business unit.

The demand of products for the production of insulating glass is growing all over the world. Also in the USA this growth has become a rule. Has the American market to be considered riper than the European one, or do you foresee any other remarkable possibility of expansion?

As mentioned, the commercial market in the US will continue to be quite active through 2008 – so I would agree that it rivals the European market in this respect. Highrise condominiums, government projects and new commercial towers, all seem to be the current trend – most using some of the specialty glass coatings available from the flat glass manufacturer’s which help reduce building operating costs.

Mexico appears to be an evolving market for insulated glass, for many of the same reasons which we all understand. The cost and availability of power – to cool both residences and commercial towers is becoming a concern for local governments. Utilizing insulated glass will have a great impact on the overall improvement of this situation. This will take a number of years while fabricators work to increase their production methods and thru-put to meet the growing market.
The European market has shown local growth and has been assisted by the emerging economies in Eastern Europe and other parts of Asia. All of these all have impacted European suppliers in a positive manner.

The distribution through Glass Alliance of aluminum and steel profiles too is making the sealant offer more competitive, especially in terms of service. Which are the areas that are more interested in the offer of Glass Alliance?

We currently have a good relationship with all the Glass Alliance partners.

We are marketing AluPro aluminum spacer profiles in both Canada and United States. All of our customers have acknowledged the high quality of our aluminum spacer bar and comment they prefer over other suppliers materials. This market is very competitive and hindered with freight costs, but we continue to improve our position.

We continue to market the Roll Tech steel warm edge spacers – but the North American market finds pricing to be difficult and most end users not ready to accept costing. The push is on from all groups to use better insulating products, improve overall efficiencies for windows and the Roll Tech steel spacer will be of use in the future.

But there are also other products that mark the vitality of the company: for example the range of Decover cold paints, attended at Fenzi’s stand in Glass Build America last year. Is it currying favor of the American market?

I would agree, there is no question the development of the Fenzi Decover line shows well for future growth in North America. Many of our customers express optimism for using these paint products to improve their market share. Designers and architects alike are starting to recognize the value in including some of these products in their design.

Which are, in your opinion, the other Fenzi’s products particularly promising for the immediate future?

We continue to do R & D work with Italy to meet the demands of our North American customers.

Our customers have asked for different material characteristics and our Technical staff has met the challenge. We will continue to work with our customers to develop a polysulphide material that meets their needs.

What is a concern is that raw material costs continue to escalate, eroding margins. This is not unique to Fenzi, but the petroleum industry has effects through out all business markets.

As an overall review for our market, while residential down for the balance of the year, an upturn should occur by the second quarter next year. We do expect our customer base to improve to help offset this downturn - and the commercial business to continue to be strong for the next few years.