Now entering construction zone: more than 50 North American woodworking companies and industry suppliers invest in new or expanded facilities.

Over the last five years or so, headlines highlighting plant closings and overseas exporting have dominated the woodworking industry. But out of the thicket of negative PR, buds of optimistic new construction projects are blooming toward a brighter day.

Wood & Wood Products has gathered Leads on new plant construction and expansions through press releases, Internet searches and tips from industry leaders throughout the last year. Though by no means all-inclusive, this report of expansions completed in 2004, or scheduled to be completed in 2005, represents a comprehensive overview of expansions happening in cabinetry, flooring, components and even furniture plants.

As reported by W&WP, the cabinetry industry hit its 108th consecutive month of growth in March and is clearly reaping the benefits of the ongoing boom in new home construction. Such buoyancy has allowed several cabinetry companies to build new facilities, leading the way in new construction and expansions. Several laminate flooring manufacturers, another segment of the woodworking industry benefiting from home construction and remodeling, are building new plants.

Meanwhile, report after report has shown furniture companies Looking overseas in order to stay afloat financially. Yet, a handful of companies are looking to expand here in the United States. Though small in scope, the significance of these projects begs the question: Is this the tip of the iceberg?

Cabinetry Leads the Way

Stan Bandur, the president of Elkay Cabinet Group, explains his theory on why cabinetry prospers while furniture falls by the foreign wayside. "There's a long track record of cabinet companies domestically building new plants in the U.S.," he says. "Our cabinet group is focused on domestic sales. [That's because] we build kitchens or orders one at a time, and we have lead times, depending on which company and which cabinets you're ordering, that range from three weeks to six weeks. To get a unique, semi-custom kitchen in six weeks' time is something that would be very difficult for an overseas producer to match competitively."

The Elkay group includes three cabinetry companies, two of which are undergoing major expansions.

The first, Yorktowne Cabinetry, which has had two operations in Pennsylvania, is investing $19 million in the construction of a 256,000-square-foot wood finishing and cabinetry assembly plant in Danville, VA. Meanwhile, its 93-year-old facility in Mifflinburg, PA, which provides the same functions, will close. Bandur notes that the new facility will provide additional capacity and more state-of-the-art technology. The project, which is scheduled to be complete by the end of 2005, should provide about 500 jobs over the next five years and 300 upon initial start-up.

A Yorktowne press release says the "strategic move" to Virginia will improve the company's service in the Southeast and allow the company more "flexibility to better compete in today's ever-changing dynamic marketplace." Bandur adds that the region offers the training and educational system necessary to provide skilled employees. "They also had an office of economic development ... and the State of Virginia actually put together a team that was very aggressive as it relates to enticing new business ventures there," Bandur says.

The second project, started and completed in December 2004, is a component plant for Medallion Cabinetry in New Ulm, MN. This is an additional plant for Medallion, which has plants in Independence, OR, and Waconia, MN. The 60,000-square-foot facility, expected to employ 45 people in the first year of operation, is dedicated to producing cabinet doors, drawer fronts, face-frame components and linear mouldings in oak, maple, cherry and adler. Its components will feed the production facility in neighboring Waconia.

"This additional facility is a step toward vertical integration, which is something Medallion had not been doing," Bandur says. "But this does not replace the outsourcing of doors, it just supplements the outsourcing of doors.

"The whole theme for both of these projects, sort of the umbrella theme, is--We are capacity constrained in the Elkay Cabinet Group because we've been fortunate that our sales growth has been good and continues to be good," Bandur says. At this time, the third peg of Elkay--AKA MasterCraft--is not planning any expansions, but is "also doing well," according to Bandur.

While Elkay, the fourth largest U.S. cabinetry company, completes its expansions, America's third largest cabinetry company is making a similar investment.

American Woodmark Corp. completed construction of a $12 million, 250,000-square-foot assembly plant in Allegany County, MD, in early January. The company's additional facility will employ about 500 people once the plant becomes fully operational, though only 88 employees were hired initially.

American Woodmark's CEO, Jake Gosa, agrees with Bandur regarding the possibility of overseas cabinetry operations. "It makes no economic sense to attempt to manufacture the required depth and breadth of product necessary to pursue a full-service kitchen cabinet business in China," he says. "The cost savings would be offset by the substantial logistics requirements necessary to serve the business. Add that to long lead times and the decision is rather straight forward."

AWC, which operates 14 other manufacturing facilities throughout the United States, chose the Allegany location "because the community offers an economically competitive environment, will provide a high-quality way of life for our employees and is strategically located," Gosa says. "The new site is purposely Located near our existing manufacturing network, affording AWC the ability to maximize synergies with its existing operations in Virginia and West Virginia, and to more easily supply to the growing Northeast and Midwest new construction and remodeling markets."

Speaking of the Midwest, Middlefield, OH-based semi-custom cabinetry manufacturer KraftMaid, a Masco Corp. company, completed a $25 million capacity increase to each of its three Northeast Ohio facilities. Not content on staying in the Midwest, though, KraftMaid is slated to break ground on a 700,O00-square-foot, $106 million manufacturing facility in West Jordan, UT.

KraftMaid does not mind investing so much because, as Kim Boos, public relations and marketing manager, says, demand for KraftMaid products remains very strong.

"We need to continue to increase capacity and expanding west allows us to increase capacity as well as better service those customers in the west and central United States," Boos adds.

Groundbreaking for the Utah facility is expected to take place in the second quarter of this year, and production will begin in summer of 2006. When the plant opens, KraftMaid expects to employ 1,300 people, who will eventually produce 6,000 cabinets a day when operations are at full capacity.

Drawing KraftMaid to the Beehive State was the state's Board of Business and Economic Development's approval of $2.25 million in incentives. Included in the incentives, if the company stays in business there for at least five years, are: $200,000 for breaking ground, up to $150,000 for pre-startup job training and up to $706,000 for post-startup job training.

As for KraftMaid's plants in Ohio, the company expanded its three facilities there, including its headquarters in Middlefield, and 500 to 700 more jobs are expected to be added in the next three to five years, Boos says. Since the completion of the expansions was announced in April 2004, KraftMaid has hired 500 new workers.

"We had to add equipment and finishing lines, and obviously, to make more cabinets, we needed more personnel so we needed to make that investment," Boos says.

Combined, the three Northeast Ohio plants now total about 1.5 million square feet.

Also on the West Coast, Tim Hunt, president of Spokane, WA-based Huntwood Industries, wants to see his company continue growing by at least 20 percent each year. From 2002 to 2003 alone, the company's sales grew 39 percent.

For these reasons, the high-end cabinetry manufacturer broke ground more than a year ago on its 577,000-square-foot factory that ties on 87 acres in Liberty Lake, WA, about 5 mites from the current building. As a part of the expected growth, Hunt hopes to be able to hire 50 workers a year to help keep up with that demand.

Hunt says the company has researched, including taking seven trips to Europe, Green technologies, and what it has learned--and purchased--will go toward making the factory as Green as possible.

Hunt adds that several states were vying for the new factory, especially those states in the Pacific Northwest. Washington won out, with a sales tax exemption on new building or plants and equipment, he says.

"We researched several states, and many states were vying aggressively for us to move in," Hunt says. "After looking at all the details and our team, we opted to stay because if you don't have your key people and your whole crew, it pretty much makes life more difficult. The degree of difficulty, and the skit that's taken to build [our cabinets], is very important."

Back east, Merillat Industries, manufacturer of kitchen and bath cabinetry, announced late last year that it would invest $13.4 million to expand its manufacturing plant in Culpeper County, VA.

Already employing 1,150 people, the new expansion would add 140 new jobs to Merillat's payroll.

According to a press release from Merillat, "This expansion is necessary to support our sales growth, and the decision to add to our Virginia facilities was an easy one," says Keith Allman, executive vice president of Merillat.

With Florida and Ohio competing to land the expansion, Merillat, also a Masco company, decided to stay where it already has four facilities. A nice incentive package did not hurt matters either.

The Virginia Economic Development Partnership assisted Merillat in securing the incentives, which included a $150,000 from the state's governor. Also, the state's Department of Business Assistance will provide training with its Workforce Services Program.

Merillat operates another facility in Mt. Jackson and two others in Atkins.

Flooring Spreads Out

The growth of laminate flooring sales has been one of the success stories among wood products the last several years, with U.S. sales cracking $1 billion last year. Three European-based companies with substantial North American sales are either establishing or expanding manufacturing plants in the United States, to be close to their distributors and customers. Here, their U.S. executives talk about their companies' reasons for investing and what they hope to accomplish.

Realizing it needed a North American manufacturing base shortly after it began sales of its Quick-Step laminate flooring here in 2001, Belgium-based Unilin bought a small plant in Thomasville, NC. The plant meets only 25 percent of Unilin's North American needs, says Quick-Step NC President Piet Huyghe of Thomasville, "which is the reason, of course, for us to build the new facility."

The new $80 million, 1.1-million-square-foot complex is being built in two phases at another Thomasville Location. The first 700,000 square feet will be ready for startup of one line in late summer, and the rest of the space will be added to accommodate a second line to be built in the 12 to 18 months after that. Once the two phases are complete, the plant should employ 330 new workers.

With the new lines' 500-million-square-foot annual capacity added to the existing 40 million, Quick-Step will be able to meet 80 percent of its North American needs from Thomasville, Huyghe estimates. It will be the only company to perform all the steps involved in making Laminate flooring in the United States, he says. The company, which has an HDF plant in Mount Gilead, NC, will impregnate the paper, press it using the DPL (Direct Pressure Laminate) method, tongue-and-groove the flooring, package and sell it to distributors across the country.

Unilin was encouraged by sales growth to make the investment, Huyghe says. "Laminate flooring is still basically a very young product in the U.S. People like it for the stylish, realistic look, and because it requires very little maintenance." Even though other wood products companies, notably furniture, turn to inexpensive overseas labor for their manufacturing, it still makes sense for Unilin to build near its 17 North American distributors, he says. "We believe service is very important."

Meanwhile, Sweden-based Pergo Inc. is installing a $15 million new direct laminating press at its Garner, NC, manufacturing plant that will add 75 million square feet to annual capacity and will enable the company to produce more value-added products, says David Small, Pergo's marketing director. He notes that sales of both the Pergo brand and laminate flooring continue to experience strong growth in the United States, and that new designs and performance technologies are helping drive the growth. "The addition of the new press will allow us to accelerate our new product program and bring exciting new products to the market faster than ever before," he says.

Pergo introduced new value-added programs at Lowe's and within its Specialty Retail business in 2004. They helped drive overall sales figures up 4 percent, excluding currency considerations. The growth of the home-improvement business is an important factor in the success of laminate flooring in the United States, Small adds.

Twenty new employees will be added to the 250 already employed. The new facility that will house the press started construction in November 2004, and production will start in August 2005.

Switzerland-based KronoGroup realized several years ago that, for its subsidiary to grow in the North American market, it would need to start manufacturing its principal products, particleboard and laminate flooring, in the United States. It originally planned to start with a particleboard plant to serve U.S. furniture manufacturers, but that industry's tilt toward imports convinced it to switch to laminate flooring, where sales were growing rapidly.

A new plant was built in Barnwell, SC, looking toward a March 2005 startup of one lamination line and one flooring profiling line. A second set of lines is expected to start production in June and July. A second construction phase, to be finished 2007-2008, will include space for making MDF/HDF for both internal use and external sale, as well as additional melamine lamination and flooring profiting lines. In total the expansions will add 760,000 square feet, costing the company $135 million.

"We hope to get started on that next year," says Norman Voss, president and CEO of Kronotex USA, a division of KronoGroup.

Laminated flooring has an established presence in Europe, he says, but in North America, "We're still on the early part of the product growth curve." The laminated flooring category has grown about 15 percent a year in the United States and Canada the last five to seven years, Voss says, more than doubling in size.

Labor will be a small part of the costs in Kronotex's highly automated plant. "There are two very fast robots in each of those lines. The speed of the lines is very high compared to what was capable five years ago. The through-output of each employee has tripled in the last five years," Moss says. The short-cycle melamine lamination Lines are made by Wemhoner, the profiling lines are from eight different German companies, with the primary one being Homag. Despite the machines' efficiencies, however, an additional 140 employees will be added to the workforce.

"The biggest emphasis is to get a wide variety of products, which is one of our strengths, to our North American customers on a much faster scale," Moss says. "I would hope we would be able to deliver routinely in two to three weeks, four weeks maximum." There have been periods in the last few years when high worldwide demand for product, plus shipping distances, have made that 15 to 18 weeks, he adds.

Who's Who in Other Expansions

Though cabinetry and Laminate flooring companies predominate when it comes to the "who's who" of woodworking expansions this year, a number of other woodworking companies in components, mouldings, furniture and other venues are also hitting the construction scene.

* Lowe's opened a door manufacturing plant in Janesville, WI, in the fall of 2004. The Mooresville, NC-based retailer invested $7.5 million in the project, which took over the 210,000-square-foot facility that once housed General Motors. The renovated facility produces interior and exterior doors made from steel, fiberglass and wood and sold under the company's Reliabilt label. Annually, the facility is expected to produce 200,000 interior doors and 130,000 exterior doors.

Wisconsin Governor Jim Doyle announced a $500,000 Department of Commerce low-interest loan to assist Lowe's with the expansion.

* High-end furniture maker Stickley invested $6 million on capital improvements that would help create 30 new jobs in Manlius, NY. Plans included construction of a high-bay warehouse, reconfiguration of the finish room and rough mill, and the addition of new equipment. The company was also applying for a capital grant from Empire State Development to help fund the project.

* Window and door manufacturer Andersen Corp. expanded its activities in Minnesota by building a new production facility in North Branch in Spring 2004. While the company closed its facility in White Bear, MN, the former plant's 40 employees joined 95 additional workers in the new 150,000-square-foot facility. Company CEO Jim Humphrey told the St. Paul Business Journal that Minnesota was chosen for the new site because of the quality of the workforce, location, training opportunities and incentives from the state.

* Covolam Inc. was scheduled to complete a $3 million expansion project in January 2005. According to a press release, at least half of the investment was to be used for new equipment in the 50,000-square-foot area, which would allow the laminated wood products company to double its current production capacity. New machines with membrane press technology, digitally controlled cutting and specialized sanding will allow the business to meet demand for veneered raised panels for furniture, cabinet door inserts and interior/exterior door inserts.

* Canada's Flakeboard Co. Ltd. announced that its new lamination plant is completed. The 53,000-square-foot plant will be built adjacent to the joint venture G-P Flakeboard MDF plant in Sault Ste. Marie, Ontario. Flakeboard has brought in its press equipment and expects it to be erected by the end of this month. At full capacity, which is expected by the end of August, the new press will be capable of laminating 100 million surface feet per year of thermally fused melamine films.

* Eggers Industries, manufacturer of custom architectural wood doors and plywood, announced the opening of a new facility in Two Rivers, WI, in September 2004. According to a press release, the new plant boasts more than 250,000 square feet, an "innovative" finishing Line and a complete conversion to water-based finishes. Eggers' president, Jay Streu, says the new finishing operation will last 90 minutes, while the old operation took three days. The new water-based process will also reduce the company's emissions by 90 percent.

DON'T SEE YOUR COMPANY LISTED HERE?

If your company is planning a major expansion in the near future, W&WP would like to know about it. Send press announcements to Katie Coleman at kcoleman@vancepublishing. com or J.D. Piland at [e-mail].

Images of blueprints, architectural renderings, groundbreaking ceremonies, construction in progress or finished plants are also welcome.

TOP DOLLAR EXPANSION INVESTMENTS

                      Million $

Roy O'Martin            $185
Kronotex                $135
KraftMaid               $131
Temblec                  $86
Unilin                   $80
Pergo                    $36
Blum                     $30
Interprint               $23
Suddekor                 $20
Yorktowne Cabinetry      $19
Merillat                 $13.4
American Woodmark        $12

Note: Table made from bar graph.

COMPANIES

Roy O. Martin, a Louisiana-based, third-generation family lumber company, announced construction of a $185 million OSB manufacturing facility and another $38.5 million dry veneer plant. Approximately 200 jobs will be created in Louisiana as a result.

Kronetex is building a two-phase laminate flooring plant in Barnwell, SC. When complete, the company's $135 million investment will equal 760,000 square feet, 140 new jobs and 400 million-square-foot added capacity.

KraftMaid recently completed a $25 million capacity increase with three plants in Ohio and announced a $106 million expansion in West Jordan, UT.

Tembec Inc., along with several government agencies, is investing $86 million in a Quebec-based veneer plant, expected to open later this year.

Unilin's new $80 million, 1.1-million-square-foot complex is being built in two phases in another Thomasville, NC, location.

Sweden-based Pergo is installing a new direct laminating press at its Garner, NC, manufacturing plant that will add 75 million square feet to annual capacity.

Blum Inc. announced plans in the fall of 2004 for a $30 million expansion at its North American headquarters in Stanley, NC. The project will include a warehouse addition, injection moulding expansion, two automated hinge-assembly lines and a new line for drawer-system assembly. The expansion is expected to be complete by December 2005.

Interprint Inc,, designer and printer of decorative papers used in laminates, announced plans to construct a $23 million manufacturing facility last spring. The new building will require more than 25 new employees and is the first phase in a 135,000-square-foot manufacturing plant, office and design center.

In January 2005, Suddekor broke ground on a decorative paper treating facility in East Longmeadow, MA. Construction of the new 108,000-square-foot plant, estimated at $20 million, should put the company in better position to supply the saturated paper industry in North America, which is expected to grow 34 percent in the next five years.

Yorktowne Cabinetry is investing $19 million in construction of a 256,000-square-foot wood finishing and cabinetry assembling plant in Danville, VA.

Merillat will invest $13.4 million to expand its manufacturing plant in Culpeper County, VA

American Woodmark's $12 million investment will go to a 250,000-square-foot assembly plant in Allegany County, MD.

OTHER EXPANSIONS

In addition to the 12 "Top Dollar" expansions (see chart on p. 43) and the eight other companies featured throughout the story, these 33 companies are undergoing--or recently completed--expansions throughout the United States and Canada. Visit our Web site, www.iswonline.com, to learn more about each project in our Online Extra edition of the story.

Aconcagua Timber Corp.

Birchwood Lumber & Veneer

Bishop Fixture & Millwork

C.H. Briggs

Cabinet Door Shop

Child Craft Industries

CTS&I Millwork Inc.

Decorative Specialties

Dinosaw Inc.

Distinctive Designs

Dixie Seating Company

ECMD Inc.

Geppetto Custom Kitchens

Interstate Lumber

Lozier Corp.

Mannington Mills

McConnell Cabinets

Palm City Millwork

Red Cloud Wood Products

Safety Speed Cut

Schulte Corp.

Stiles Machinery

Sunrise Wood Products

Sure-Lock Industries

TC Millwork

Texwood Furniture

Thierica Equipment Corp

Timesavers Inc.

Trio Industries Group

Vortex Tool Co.

WalzCraft Industries

Wellborn Forest Products

Western Cabinets Inc.

Meadville, PA

Birchwood, WI

Balsam Lake WI

Reading, PA

Hot Springs, AR

New Salisbury, IN

Roanoke, VA

Monroe, NC

Selinsgrove PA

Granite Falls, NC

Statesville, NC

Charleston, SC

Forest City, NC

Byram, CT

Scottsboro AL

Epes, AL

City of Industry, CA

Palm City, FL

Baker City, OR

Ham Lake, MN

Bloomington, OH

High Point, NC

Spokane, WA

Oswego, NY

Bensalem, PA

Taylor, TX

Grand Rapids, MI

Maple Grove, MN

Dallas, TX

Schofield, WI

LaCrosse, WI

Alexander City, AL

Dallas, TX