Summary
• The slowdown in housing is impacting on mouldings sales.
• MDF mouldings are popular with the new build and refurbishment sectors.
• Palgrave Brown has invested heavily in equipment and technology.
• Simple, square mouldings are popular.

You could be forgiven for thinking that the country was on the verge of economic meltdown. With the amount of column inches dedicated to the ‘credit crunch’ and an increasing number of banks cutting their mortgage products, it doesn’t take a genius to work out that, while the housing market’s bubble has not burst completely, it is steadily leaking air.

Unsurprisingly, this has impacted on the mouldings market, which is intrinsically linked to the new house build market. “In the present challenging climate, private sector new build has slowed and we are seeing this reflected in MDF mouldings sales,” said Alan Fillingham, manufacturing director at Palgrave Brown.

Others in the industry echo his views. “As mouldings are finishing trims, their sales reflect the fortunes of the builders’ merchant and DIY sectors, both of which are heavily influenced by the housing market,” said Steve Woodhouse, director of marketing at Richard Burbidge Ltd. “Hence, the credit crunch and slowdown in housing transactions is impacting on mouldings sales.”

But there are signs that the market could be returning to form. “We have had a slow start to the year as everybody else has done, but the market has picked up,” said Neil Farnworth, machine sales manager at Smee Timber. “Reflecting on last year’s sales, we are still 10% up. But, with the kind of orders we get – principally bespoke – we can never predict too far in front.” However, he believes the company will continue to push sales on.

Jonathan Grant, managing director at W Howard is also convinced that there will be an upturn in the market later this year. “We can only see this reduced building rate for so long,” he explained. “The whole infrastructure of the country demands that new houses are built and it is purely the doing of the banks that’s causing this temporary blip.”

Meanwhile, SAM Mouldings has been aggressive in expanding its sales force to counter the possible negative effects of the market. “We are wary of the market problems, but are doing things to protect ourselves against them,” said Gerard Wilson, key accounts manager. “The cake might be getting smaller, but if we want to increase our slice of it, then we need to go against the grain in terms of the normal reaction. It’s always been the way here.”

With the falling margins in new build construction, developers are looking to save costs where they can. This has certainly helped the MDF market, where its defect-free and consistent qualities, coupled with time savings, have made it popular with the new build and refurbishment sectors.

Time savings

“Time is a precious commodity now and both budgets and build programmes are tight,” said Palgrave Brown’s Alan Fillingham. “Not only that, the time allowed for the final fixings gets squeezed and that’s where MDF mouldings come in as the fast-fix, hassle-free solution. Each piece is like every other piece – it doesn’t need careful selection or remedial work, reducing the amount of time and waste.”

Palgrave Brown has invested heavily in new equipment and technology to enable it to create a profile template for bespoke designs. In particular, it has a CNC computer, which allows it to generate templates within a computer programme, and a semi-automatic template maker to then create the profiles in the MDF.

“Additionally, we have invested more than £250,000 to dispose of MDF waste as it is cut,” said Mr Fillingham. “Previously all waste went to landfill, which was unacceptable to Palgrave Brown and its environmental policy so we invested in a combusting machine that also generates heat for the factory floor. We hope in time to take this to the next step by generating our own electricity through the use of these machines.”

Gerard Wilson agrees there is still evidence that MDF mouldings are eating into the market share of softwoods, although the company has seen “major success” with its hardwood veneers. “It’s still relatively early days, we are selling the benefits of veneers over solid hardwood mouldings, and the message is getting through. We have also seen a reasonable amount of success after our entry into the DIY market. If the residential market is reducing, people can’t afford to move house and are staying where they are and improving their properties.”

Richard Burbidge’s Steve Woodhouse agrees that time-saving products are doing well and that MDF fits into this category. “However, we are finding that part or fully finished softwood and hardwood products perform better, as end-users still tend to prefer solid timber,” he said.

“Pine remains the ‘bread and butter’ choice for mouldings but research has shown that many consumers regard it as a more traditional, budget option. End-users are increasingly asking for greater timber choice, often to co-ordinate with flooring or furniture. Consequently, there are opportunities to trade customers up to higher value timbers, such as white oak, that reflect wider interior trends.”

He believes that, to stimulate sales in tough conditions, it is vital that suppliers can offer customers new ideas that will attract new users and help to grow the market. “We have recently received the findings of our latest research project and will be continuing to develop products that reflect our changing demographics,” explained Mr Woodhouse. “‘Done for me’ products that save time meet the needs of the ‘silver surfers’ generation as well as busy working professionals and our latest designs reflect this trend. We are already working on three possible new concepts for 2009, which have been developed based on consumer demand.”

When it comes to designs, it’s no surprise that, given the vast numbers of new build flats still on the market, ‘simplicity’ is playing a key role. “Simple and square is the order of the day when it comes to mouldings designs, and these are mainly going into the newer apartment blocks – where they are still being built,” said Jonathan Grant. “However, the traditional torus and ogee are still going into new houses because they are, and have been, popular for decades.”

Still confident

Despite the future of the economy still being uncertain, mouldings manufacturers are confident they can trade through the tougher times. “There are areas of activity where orders are continuing to come through, including social housing and the refurbishment market,” said Alan Fillingham. “The UK is still desperately short of homes, and the public sector continues to build and refurbish, thanks to government initiatives such as Decent Homes, to meet this need. Additionally, it’s reasonable to expect private sector refurbishment to increase as people extend and renovate, rather than move house.”

Meanwhile, Steve Woodhouse thinks the trend for part or fully finished mouldings will continue. “Trade professionals are looking for time-saving products that will allow them to complete projects quickly, while still doing a professional job,” he told TTJ. “Plus, today’s time-poor consumers want DIY products that make home improvements easy and which stop DIY from encroaching into their leisure time.”