3 rd asphalt shingle recycling forum a manufacturing perspective vince brulinski gaf-elk
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3rd Asphalt Shingle Recycling Forum
A Manufacturing PerspectiveVince Brulinski
GAF-ELK
AGENDA
The GAF-ELK Story – What and Why? The Roofing Industry Shingle Recycling Past and Present Post Consumer Shingle Recycling WWIM (What’s In It For Me?)
We Read This Every Day!
Home Sales Slump at 8-Year Low
By MICHAEL M. GRYNBAUM
Published: October 25, 2007
Sales of existing homes fell 8 percent last month to the slowest rate in at least eight years…
Who Is GAF?
North America’s largest roofing manufacturer
$2.0 billion sales 27 strategically located
manufacturing facilities 3,700+ employees
GAF is the only North American manufacturer with comprehensive system solutions in both both steep and low slope roofing
2006 segment breakdown2006 segment breakdown
Steep Slope Roofing
Steep Slope Roofing
Low Slope Roofing
Low Slope Roofing
Specialty Building Products
Specialty Building Products
Who Is Elk?
Elk is a leading manufacturer of residential roofing and other building products
$896 million sales 1,400+ employees 10 manufacturing facilities
Recent investments in state-of-the-art highly efficient production
Strong market presence, especially in the Southwest and the West
LTM 12/31/2006 segment breakdownLTM 12/31/2006 segment breakdownBusiness descriptionBusiness description
Premium Roofing
Products
Premium Roofing
Products
Composite Building Products
Composite Building Products
Specialty Fabrics
Specialty Fabrics
2006 sales of $896 million
GAF-ELK Shingle Manufacturing Locations
ELK Pre-mergerELK Pre-merger BMCA Pre-mergerBMCA Pre-merger
CombinationCombination
RGM – Fresno, CA
Elk Glass Mat
Ennis, TX
Dallas, TX
Tuscaloosa, AL
Tampa, FL
Mobile, AL
Savannah, GA
Chester, SC
Goldsboro, NC
Mount Vernon, IN
Michigan City, IN Myerstown, PA Quakertown, PA
Millis, MA
Erie, PA
Fontana, CA
Shafter, CA
Minneapolis, MN
Baltimore, MD
RGM – Fresno, CA
Elk Glass Mat
Ennis, TXTuscaloosa, AL
Myerstown, PA
Shafter, CA
Dallas, TX
Tampa, FL
Mobile, AL
Savannah, GA
Goldsboro, NC
Mount Vernon, IN
Michigan City, INQuakertown, PA
Millis, MA
Erie, PA
Fontana, CA
Shafter, CA
Minneapolis, MN
Baltimore, MD
Roofing Industry Snapshot
Industry Drivers Comments
Size Of Industry * 32 Billion; $10 Billion Mfg.
* $5.5B Steep; $4.5 Low
* Laminates $3.5
* Strips $1B
Existing Housing * 142 Million and Growing
Market Stability * 80% Remodel; 20% New
Upgrading Systems * Laminates Now 70%+
* Trend Designer Shingles
* More “Systems”
Shift to Re-Roofing
Shift to re-roofing reduces the exposure to cyclical downturns in the economy and the housing sector; this trend is expected to continue
1980(1)
Re-Roofing68%
New Construction
32%
(1) BMCA estimate
America’s Housing Stock
The median age of the U.S. housing stock is 34+ years
18
711
251714
9817 16
142
124
108
91
66
4935
2618
11
0
30
60
90
120
150
Pre1920
1920's 1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's
Mill
ion
s o
f H
om
es
New home construction Existing homesSource: U.S. Commerce Dept. NHCN Projection
The growing housing stock in the U.S. continues to drive growth in the re-roofing segment On average, residential roofs are replaced every 15 years
Strong Industry Performance
Recent industry dynamics only temporary Industry shipments in 2006 vs. prior year were
negatively impacted by the lack of hurricanes Industry has reduced capacity by plant closings of
about 9 million squares.
Source: ARMA & US non-reports
(Millions of squares)
With non-discretionary re-roofing demand accounting for approximately 80% of industry demand, the asphalt roofing market is one of the most stable in the building products industry
Shingle Recycle Past Experience
Genstar Stone, Baltimore, MD, 1993
Excessive Manufacturing Scrap
Landfill Fees Doubled
Purchase Grinder and Screen – Whoopee!
High Maintenance Cost
Poor Quality
GAF-ELK Shingle Recycle Today
12 Asphalt Shingle Recycling Partners
13 Manufacturing Locations
160,000 tons of Manufacturing Waste
Recycled Annually
State Approvals = Less Uncertainty
Technology Advancements = Higher Quality
More attractive economics
Post Consumer Shingles
Challenges to Market
Contractor’s Distance from Recycling Center Segregating Roofing and Other CD Waste State Testing and DOT Approval Processes Process Variability and Asphalt Content Local Community Concerns of Shingle Piles Cost of Contamination Testing Frequency of Contamination Testing
Post Consumer Shingles Continued
Roofing Industry Faces Several Obstacles Low barriers to enter Numerous competitors with low overhead Inadequate training and high turnover Industry Image Problem
Thousands of complaints each year Consumers don’t know who to trust Consumers need help understanding who to hire
WIIFM?
Roofing Manufacturers Environmental Stewardship Value Added Service for Contractor Programs An Extension of Our Recycle Partnerships.
Contractors Environmental Stewardship Single Point Disposal Lower Cost of Disposal More Sales – Higher Margin
WIIFM CONTINUED
Recycling Industry
Maximize Return on Investment Constant Source of Raw Materials Economic Scale –Thousands of Contractors
vs. Few Manufacturers Expanding Markets and Creating Value
The Truth Is - Landfills Don’t Want Shingles!
