National Hardwood Magazine - Christmas Buyers Guide 2014

EXCLUSIVE REPORT: 2015

EXCLUSIVE REPORT: 2015 HARDWOOD PURCHASING PLANS Continued from page 20 Hardwood Purchasing Plans ERIC BOER MASON’S MILL AND LUMBER CO. HOUSTON, TX 2014 has been both a rewarding and challenging year. Business has rebounded in our market and construction starts are improving. Meanwhile, we have experienced some supply line shortages due to limited production capacity, weather events and an uptick in overall demand for certain species. Primarily we saw shortages in Red Oak, Poplar, Alder and Walnut. While we have been able to keep inventory on hand, we have endured some significant and rapid price increases and had to plan a little more strategically in our purchasing. If things continue on the path they’ve been on, I would expect to see more of the same in 2015. I foresee an increase in our purchasing in 2015 over 2014, very similar to the increase we experienced in 2014 over 2013. We have seen some developments in our market that would lend to increasing the diversity of our Hardwood purchases in 2015. These include issues from design and architectural interests embracing rustic and character grade themes, thereby enhancing the use of lower grade lumber, to the increased use of tropical Hardwoods in decking and siding applications. We welcome the changes in design and architectural trends, and have always endeavored to stay abreast of these changes. Our goal is always to offer additional Hardwood and millwork options that accommodate, complement and enhance the architect’s vision. White Oak, Walnut and Hickory are the preferred wood species of our customers. In 2015, we are looking to introduce more stain options for our UV cured pre-finished line and are starting to offer more handscraped options in addition to the wire brushing we already offer. Next year, I expect keeping lumber pricing in line will be our biggest challenge. LEROY MAST KEIM LUMBER COMPANY CHARM, OH I do not see a major change in our buying practices in 2015. The dominance of Poplar and Soft Maple has continued in 2014. Red Oak was 35 percent of our overall consumption six years ago; today it is 15 percent. During this time our overall lumber consumption has increased 35 percent, with Poplar, Soft Maple and Walnut accounting for most of the increase. Poplar, Soft Maple and Red Oak are the top three species, in that order. However Walnut and Grey Elm have been in strong demand and hardest to keep in stock. With the downsizing of our sawmill industry in the last six years, there will be some growing pains as the global appetite for wood fiber increases. With rising fuel costs, labor and trucking issues and general inflation, the long-term price trends will be up. The unstable U.S. and Chinese economies remain the wildcards in this game, and can change the picture in a hurry. JOSH KAHLE HARDWOODS OF WISCONSIN ELKHORN, WI In 2015, our lumber buying will increase. Due to various changes within our company, we will be buying more. Hardwoods of Wisconsin, a custom Hardwood flooring manufacturer, usually purchases 500,000 board feet per year of White Oak, Hickory and Walnut in No. 1 and 2 Common, Select and Better, 4/4, KD, surfaced. Our Hit & Miss products have been selling very well, which are: White Oak, Walnut and Hickory; those three have also been selling well in traditional plank flooring. We also offer UV cured pre-finishing (roll coater), wire brushing, hand scraping and edging. RUSSELL SHAMBLEN PREMIER HARDWOOD PRODUCTS JAMESVILLE, NY Here at Premier Hardwood Products we expect to continue the relationship building we have been doing the last several years with our vendors. The supply chains for the future will become even more important as the global use of Hardwoods continues to improve. There is no doubt that production of U.S. Hardwoods has recovered at a rapid pace, catching many people by surprise, but by the same token the number and variety of producers will probably never again reach the level we saw pre-recession. The surviving companies of this “trial by fire” are adding capacity at a 22 CHRISTMAS 2014 ■ NATIONAL HARDWOOD MAGAZINE

EXCLUSIVE REPORT: 2015 HARDWOOD PURCHASING PLANS Hardwood Purchasing Plans breakneck pace, installing new equipment, updating technology, or increasing operating hours. But it is important to remember; the pool of potential suppliers has contracted significantly. In the pre-recession years a normal policy for some purchasing managers or companies was, “if a supplier doesn’t work out, just find a new one.” This idea may have finally reached a “dead end” in the post-recession market. Premier feels it is important to maintain a diverse pool of suppliers and, in turn, we strive to be a stable and consistent market to as many of our supplier companies as possible. In the Hardwood flooring industry the movement seems to have been to wider widths in installed floors. An emphasis on character marks and color variation being visible in the finished floor, (providing visual interest) seems to also be growing. Red Oak was still the predominate specie being used in 2014. Still maintaining a strong market presence was Hickory, Hard Maple and White Oak followed by Black Cherry and White Ash. Premier does not see much of a change in the species consumed in 2015 compared to 2014. There may be a slight increase in Cherry usage along with Ash. It is important to remember that with the spread of the Emerald Ash Borer and the rate White Ash is dying, in the not too distant future, Ash may not even be a viable specie for use in the Hardwood industry. What will replace it? Looking toward 2015, the greatest possibility for new products at Premier would be introducing additional species in our product lines and customizing grades of flooring to create different looks. Any successful company must respond to customer needs, to the best of its ability, but at this time we are not aware of any new directions in 2015. One of the greatest challenges has always been balancing inventory with production. As Hardwood lumber is purchased to arrive on schedule, one or two months in advance, small changes in production schedules can create big changes in inventory positions. Premier rarely, if ever, cancels purchase orders so planning and forecasting is critical in maintaining vendor relations, continuity of deliveries, and reasonable inventory levels. Additionally, as the pool of potential suppliers continues to shrink due to consolidation and acquisitions in the Hardwood industry, keeping a diverse range of vendors will become more challenging in the future. Cost control is also a concern in 2015. The tremendous run-up in pricing that occurred in 2014, in some cases, out-priced Hardwood products for the average consumer. At this time there is a moderation of pricing taking place in most species where pricing escalated so sharply the last several months. While the Hardwood market does operate with supply and demand determining price, I would hope to see us reach a more stable pricing environment in 2015 (that might be healthy for all of us). The big unknown in our industry is what influence the export market will have on the domestic market in 2015. The demand from the larger importing countries in Asia or Europe for North American Hardwoods can certainly change the supply equation very abruptly. If that does occur in 2015 we could be off to the races…again!!! SCOTT UHRIG STAIRWORKS GUELPH, ONTARIO Our buying practices will continue without change into 2015, focusing on Red Oak and White Hard Maple, Poplar, and No. 1 and 2 Common pine. Products selling well for us as a stairbuilding company are stairs and railings using Red and White Oak. Sales have been steady this past year and I suspect that trend will continue into 2015. Wood species currently preferred by our clientele on average would be Red Oak. We are always looking at ways to diversify our product line, and do have one very exciting new product offering that we will be introducing early next year! For more information visit www.stairworks.ca. The ongoing challenge in our industry in 2015 is sourcing and securing clear long material. VINCENZO BONOFIGLIO THE OAK STAIR LIMITED WOODBRIDGE, ONTARIO In 2014, solid 5/4-inch Red Oak in Select and Better was our preferred wood specie for our stair products. It’s also the preferred wood specie of our customers. We’re always offering new products so each year presents new items for our customers. Looking to 2015, variation in lumber prices and availability will be our main challenges. ■ CHRISTMAS 2014 ■ NATIONAL HARDWOOD MAGAZINE 23