Insulation Maker Thrives In Down Building Market
TREXLERTOWN, Pa. (AP) – Starting a construction related business in the midst of a recession and real estate bust in 2009 may not have seemed like a smart move.
But for fiberAmerica in Upper Macungie Township, it appears to have paid off.
In its first year, the expansion minded company that makes Green Seal cellulose insulation using shredded newsprint has doubled its staff to 20 and hopes to double that number again by the end of 2012.
“We are providing jobs for 20 people and have the capability of doubling that in this facility rather easily over the next two years,’’ said company business development director George Day.
The privately held company does not report financial results, but says it has exceeded revenue and profit forecasts, nearly tripled the number of truckloads of insulation it has shipped in its first year, and added a second shift of workers to its manufacturing floor to meet rising demand.
In August, the company announced it had expanded distribution and sales into the District of Columbia, Virginia and Maryland.
It now is looking to expand its market beyond the Mid-Atlantic and Northeast, a move that might involve opening a second plant in another region of the country, Day said. In the past, it has projected employing 53 people in its first three years.
The market for the type of cellulose insulation manufactured by fiberAmerica is only expected to grow, said Lloyd Alter, senior writer for architecture and design for Discovery Publications’ Treehugger.com, a website that promotes sustainability.
For the time being, fiberglass insulation, which is less expensive than cellulose, will continue to be the choice of mass market builders, Alter said. But cellulose, which offers better performance and is more environmentally friendly, is gaining, particularly with custom builders.
And the price of cellulose insulation is getting more competitive, he said.
“It is custom builders trying to do a really good job, a customer who really insists they want a sprayed insulation because everything they read says it is doing a better job,’’ Alter said. “People who want to build green are not going to use fiberglass no matter how much they advertise.’’
Fiberglass makers dispute the superiority of cellulose insulation on a variety of points, saying fiberglass insulation is more fire-resistant and less likely to settle and lose effectiveness, for example.
Day attributes fiberAmerica’s startup success to a management team with exhaustive knowledge of, and contacts in, the construction industry. Government subsidies for weatherization and energy efficiency haven’t hurt either, he said.
“The idea on paper started probably two years before the plant even opened,’’ Day said. “We knew there was an opportunity to do this. The most gratifying thing for everyone involved in the leadership was the opportunity to say: Here’s a way to make money if we do the right thing by our customers, but here we also have the benefit of doing something that is incredibly valuable to society at large.’’
Established in the Lehigh Valley and surrounding region, the company is beginning to get inquiries from builders and contractors from farther away, Day said.
But it’s not typically costeffective to ship building products long distances, more than 350 to 400 miles, so the company may open a second location within the next year to expand its market.
“It is shipped in 53-foot trailers,’’ Day said. “That is how we ship our product. You’ve got 20,000 pounds of material. It does get costly. The construction industry is like that.’’