Construc)on*Materials*in*the* United*States

Construc)on Materials in the United States Proexport Colombia Tony L. Callahan MBA, CPSM, CSCP, CGP CIRM, CPIM, C.P.M., A.P.P., MCIPS This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Agenda • 
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Introduc)on Market Overview Key Players Trends & New Products Value Proposi)on Market Entry Strategies Wrap Up This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. My Background • 
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Relevant experience in manufacturing, distribu)on and homebuilding NVR (NV, Ryan, Fox Ridge Homes) Beazer Homes – 
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Chief Procurement Officer Licensed Residen)al/Light Commercial Contractor Registered Appraiser Served on Pro Dealer Conference Board Served on Big Builder Conference Board Home Improvement Industry Presidents Council advisory board Speaker (Housing Leadership Summit, Big Builder, Pro Dealer Conference, Builder Exchange Residen)al, etc.) • 
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Masters degree in Business Administra)on Cer)fied Professional in Supply Management (CPSM) Cer)fied Supply Chain Professional (CSCP) Cer)fied Purchasing Manager (C.P.M.) Cer)fied Green Professional (CGP) Cer)fied in Integrated Resource Management (CIRM) Cer)fied Produc)on and Inventory Management (CPIM) Accredited Purchasing Prac)oner (A.P.P.) Member of the Chartered Ins)tute of Purchasing and Supply(MCIPS) This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Size & Market Poten)al •  2014: –  1,108,000 New home starts –  11,487,955 Remodel projects •  United States popula)on is projected to grow 1% annually for the next 10 years This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Market Growth Metric 2013 2014 Growth in Total Starts 18% 20% % of MSA’s with Growth in Starts 67% 80% Growth in New Home Sales 16% 20% % of MSA’s with Growth New Home Sales 79% 85% Growth in Remodeling & Replacement 8% 4% % of MSA’s with Growth in Remodeling 99% 97% Source: Metrostudy MSA = Metropolitan Sta)s)cal Area 0 Source: Commerce Department; Metrostudy Forecast 2016 2014 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 Forecast Single Family
1988 1986 1984 1982 1980 1978 1976 1974 1972 1970 1968 1966 1964 1962 1960 Starts History & Forecast Mul)-­‐family 2,500 1,500 1,000 500 2014 Market Outlook •  The Portland Cement Associa)on predicts an 8% increase in construc)on this year •  FMI's forecast calls for –  Office market to go up 4% –  School building up 4% –  Health-­‐care up 6%. Key Players This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Understanding Your Target Customer •  Who drives the specifica)on of products in your category: –  Track builders and custom builders –  Remodelers –  Distributors –  Retailers –  Designers and architects –  Trades (installers) –  Homeowner This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Homebuilders 2012 Rank Company Closings Sales in millions 1 D.R. Horton 19,954 $4,722 2 Pulte 16,505 $4,820 3 Lennar 13,802 $4,105 4 NVR 9,843 $3,193 5 KB Homes 6,282 $1,560 6 Hovnanian 5,356 $1,806 7 Ryland 4,809 $1,308 8 Beazer 4,428 $1,006 9 Meritage 4,238 $1,194 10 MDC 3,740 $1,203 Source: 2012 Hanley Wood This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Remodelers Rank Company Sales in millions 1 Belfor $1,260 2 DKI $1,219 3 Window World $413 4 Champion Window $209 5 Power Home Remodeling $167 6 Four Season’s Home Services $110 7 American Technologies $109 8 Bath FiDer $77 9 ABC Seamless $63 10 1-­‐800-­‐HANSONS $57 Source: 2012 ForResiden)alPros.com This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Building Product Distributors Company Headquartered In Sales in millions LocaCons ABC Supply Beloit, WI $4,651 455 ProBuild Denver, CO $3,600 423 Beacon Roofing Supply Peabody, MA $2,040 228 Allied Building Products East Rutherford, NJ $2,000 195 84 Lumber Eighty Four, PA $1,620 255 L&W Supply Chicago, IL $1,145 155 Builders FirstSource Dallas, TX $1,070 97 Roofing Supply Group Dallas, TX $950 60 Stock Building Products Raleigh, NC $942 59 BMC Boise, ID $880 85 Source: 2012 ProSales This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Building Product Retailers Company Headquartered In Sales in millions LocaCons Home Depot Atlanta, GA $66,022 1,965 Lowe’s Mooresville, NC $49,366 1,715 True Value Chicago, IL $16,603 4,569 Ace Hardware Oak Brook, IL $10,008 4,104 Menard Eau Claire, WI $8,441 273 Tractor Supply Brentwood, TN $4,664 1,176 Source:2012 Kantar Retail This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Plumbing/HVAC Distributors Company Headquartered In Sales in millions LocaCons Wolseley Newport News, VA $11,400 1,274 Watsco Miami, FL $3,430 573 Hajoca/EMCO Ardmore, PA/London, ON N/A 32 states WinWholesale Dayton, OH $1,940 548 Johnstone Supply Portland, OR $1,400 375 F.W. Webb Bedford, MA $765 78 R.E. Michel Glen Burnie, MD N/A 240 Morrison Supply Fort Worth, TX $605 93 W.W. Grainger Lake Forest, IL $540 582 Interline Brands Jacksonville, FL $468 91 Source: 2012 MDM.com This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Key Players -­‐ Associa)ons Every industry in the U.S. has at least one trade associa)on. Some of the more relevant are: •  NAHB – Na)onal Associa)on of Homebuilders •  NKBA – Na)onal Kitchen & Bath Associa)on •  NARI -­‐ Na)onal Associa)on Remodeling Industry •  AIA – American Ins)tute of Architects •  PCA -­‐ Portland Cement Associa)on •  ABC -­‐ Associated Builders and Contractors This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Compe))on Countries • 
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China India Mexico Canada Sweden Indonesia Brazil Malaysia South Korea Portugal • 
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Germany Italy Switzerland Turkey New Zealand England France Poland Japan Spain Etc., Etc., Etc. Brands •  Varies by product category but Private Label brands are a big push by many distributors and retailers. This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Faucet Compe))on Example Faucets • 
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China Germany Mexico Italy Portugal Switzerland Turkey New Zealand England France Poland Private Label •  Pegasus (Home Depot) •  Glacier Bay (Home Depot) •  Ikea (Ikea) •  AquaSource (Lowes) •  Mirabelle (Ferguson) •  Tuscany (Menards) This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Faucet Compe))on Example cont. •  Faucet companies that manufacturer in U.S. •  U.S. faucet companies that own manufacturing facili)es over seas •  U.S. faucet companies that purchase abroad •  Retailers that purchase faucets and private label them •  Compe))on is significant This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Trends This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Trends •  Universal design -­‐ more Americans want to “age in place” rather than move to a new house. I.e. main floor masters, low maintenance exteriors, etc. •  Energy Efficiency and water conserva)on – beDer sealed, more insula)on, LowE windows, smartlow faucets, shower heads and washing machines •  Healthier homes –  indoor air quality: zero VOC paint and stain, hardwood/
laminate/)le flooring instead of carpet, MERV and media filters –  Germ spread minimiza)on: touchless faucets, microbial quartz surfaces, etc. •  Smaller homes with open concept floor plans and more ameni)es This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Trends •  Convenience Technology -­‐ smarter refrigerators, powered window shades, central audio, etc. •  Remote home monitoring -­‐ close garage door, lock/unlock doors, turn lights on/off, adjust HVAC temperature, adjust water heater, security alarm on/off, camera surveillance This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Trends •  Greater emphasis on durability and aDrac)ve design. –  Example: high end appliances are becoming more like furniture that is to be seen than appliances that are to be hidden. •  Pet friendly products –  Example: High end laminate flooring that looks like hand scraped wide plank distressed wood but will not scratch. This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Recycled Material Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Slate shingles Made from 100% recycled Plas)c This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Composite Decking Made From Rice Husks This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Bricks & Pavers •  37% post-­‐industrial recycled material •  up to 81% less energy to manufacture This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Transparent Materials Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Transparency Glass Shower Walls, Clear Faucets This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Using Glass Walls to Bring the Outdoors In This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Labor Saving Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Stone Veneer •  Saves Labor •  Installed by Lower Skill Level Team Member •  Add “R” Value This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Flashing Products •  Saves labor •  Eliminates caulk •  Provides excellent air sealing This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Deck Bolts Does Not Require Drilling This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Home Comfort Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Sound Reducing Paint This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Doorbell with Built-­‐in Facial Recogni)on This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Germ Spread Minimiza)on Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Touchless Technology Flushing Toilets, Faucets This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Energy Conserva)on Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Smart LED Light Bulbs with Mobile Control Mo)on Sensor Switches This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Fireplace that Heats Water This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Indoor Air Quality Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. System Lets Owners Know When to Let In Fresh Air This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Smart Hardwood Flooring Improves indoor air quality up to 85%. This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Design Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Tile made from Concrete and Tile This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. 4 Door Refrigerator This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Appliances Showed Off Like Furniture This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Bathtubs New shape Comfortable & Conserves Water This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Remote Access Innova)ve Products This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Smart Phone Ac)va)on Fireplaces, Ranges, Door Locks This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Value Proposi)on This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Value Proposi)on •  What can Colombian companies do to be successful in the market? •  Differen)ate This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Areas of Differen)a)on Quality is not a differen)ator. It is the cost to admission. You must have it. Innovation
•  New •  Different •  Not available elsewhere Cost
•  Price •  Rebate •  Other incen)ves Service
•  Lead-­‐)me •  Technical assistance Product
Installation
•  Labor required •  Material u)liza)on Brand
Recognition
•  Adver)sing •  Public rela)ons •  Sales organiza)on •  Word of mouth This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Differen)a)on Your product needs to check some of these boxes otherwise a buyer has no incen)ve to change from their current source. ü  Innova)ve (nothing else like it) ü  Costs less ü  Requires less labor to install ü  Lasts longer ü  Is available in greater variety ü  More readily available This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Example -­‐ Innova)ve This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Example – Costs Less $59.95 $37.54 $48.01 $52.91 $30.33 $16.33 This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Example – Saves Labor This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Example – Greater Variety •  Coca-­‐Cola Freestyle •  Available in 125 flavors This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Example – More Readily Available Verizon 4G Network This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Market Entry Strategies This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Support strategies •  How do you get to the distribu)on channel and the final consumer? Manufacturer Distributor Installer Builder Homeowner This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Distributor • 
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High quality Price Rebates Flexible payment terms Knowledgeable factory representa)ves Short lead-­‐)me Low minimum order quan))es No hassle return policy This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Installer • 
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Good quality Easy to install Good material yield Compe))vely priced Technical support available when they need it Reasonable pack quan))es This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Builder • 
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Good quality Rebates Free or discounted model home material Marke)ng support Logical upgrade path of products Larger builders will want price transparency This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Homeowner •  Good quality •  ADrac)ve design and colors •  Brand recogni)on is a plus This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Market Entry Strategies Push Strategy •  Incen)ves to distributors who can promote your products to Builders and Trades Pull Strategy •  Incen)ves to large produc)on builders who can specify your product to the channel •  Depending on the product…
Trades do not like to use mul)ple brands (spare parts, training, etc.) This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Partnering •  Consider partnering with a company •  Someone that can provide you (and you can provide them) a compe))ve advantage This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Partnering Example Woodgrain Moldings Prefinished molding Eastman Coa)ng technology This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Acquisi)on •  Consider purchasing another manufacturer, distributor or installer who is already established in the market This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Acquisi)on Ver)cal Integra)on Example •  Milgard Windows & Doors •  Behr Paint •  Merillat Cabinet Masco Contractor Services Masco Contractor Services Masco Contractor Services Masco Contractor Services •  Liberty Hardware This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Acquisi)on of a Compe)tor Example ElemenCa Polanco México Allura Maxi)le Plycem Formerly CertainTeed James Hardie has 85% market share in fiber cement siding This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Review DifferenCate •  Innova)ve •  Costs less •  Less labor to install •  Lasts longer •  Greater variety •  More readily available Understand the Channel •  Manufacturer •  Distributor/Retailer •  Trade/Installer •  Builder/Remodeler •  Homeowner Select Strategy •  Push •  Pull This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Ques)on & Answer This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG. Tony L. Callahan MBA, CPSM, CSCP, CIRM, CPIM, C.P.M., A.P.P., MCIPS President, CEO [email protected] WWW.CALLAHANCONSULTINGGROUP.COM 770-­‐715-­‐5036 This slide and its contents are the intellectual property of the Callahan Consul)ng group, LLC, and not to be used without the wriDen permission of CCG.