Glass Industry Responds to EFCO Sale

The commercial manufacturing world collided with the residential domain on August 28 with the sale of EFCO Corp.-which produces architectural aluminum window, curtainwall, storefront and entrance systems-to the primarily-residential door and window manufacturer Pella Corp. in Pella, Iowa.

With the current slump in the residential construction market, it may seem like a smart move for a residential manufacturer to expand into commercial construction.

"I know some people have tried it in the past," says Bill Carter, vice president of sales of Carter Glass Co. in Kansas City, Mo. "TRACO, I think, is one that went from more of a residential-type aluminum market … [to commercial market]."

However, Clark Folsom, national marketing manager of United States Aluminum in Waxahachie, Texas, says, "I don't think that's a trend."

Oliver Stepe, senior vice president of YKK AP America Inc. in Austell, Ga., says the benefit for Pella may lie in the variety of window fenestration systems the company will gain.

"From our perspective, there is an emerging need to increase the energy efficiency of commercial and residential fenestration systems while maintaining other necessary characteristics such as strength and aesthetics. So, from this perspective, it makes sense that a company like Pella that has interest but possibly lacks the knowledge of the commercial market would acquire a company like EFCO; hence giving them multiple window materials and types."

Stepe adds that YKK AP started a residential division nearly two years ago specializing in vinyl windows, in order to consider multiple materials in fenestration. "This addition to our portfolio has uniquely positioned our company with 'built-in' synergy in technology, corporate culture and systems to meet the needs of the future market."

Fulson does believe the sale could be a good move for EFCO, and for the commercial glass industry. "I think it will be good for the industry. I think they [Pella] have the financial backing to help EFCO succeed."

Carter agrees that there could be benefits to the commercial glass industry in this new development.

"If [Pella is] planning on entering the commercial glazing market through the aluminum systems that EFCO has … I think it would be a good impact because we need to keep the competition in the marketplace, and EFCO has definitely played a big role in major projects across the country for the last [several decades]," Carter says.

For EFCO customers, there are many questions yet to be answered about the sale, including the influence the primarily-residential manufacturer will have on its new commercial subsidiary, and how long-time EFCO customers will be affected.

"We're not on the residential side, we know [only] the name Pella," says Lee Still, warehouse manager with Walker & Laberge in Norfolk, Va. The glazing contractor has largely used EFCO products in its work.

Still says he has heard nothing yet as to how the sale will impact EFCO's customers.

"[It] came kind of as a shock to all of us," Still says. He notes that the sale has been a topic of much discussion at the company. "All of us were surprised because we didn't think Pella was that large."

Carter adds that he can't help but wonder, at this early stage, what Pella's intention might be in purchasing EFCO. He wonders if Pella will decide to "Utilize [its subsidiary] more for expanding their … insulating glass or other contributing products that you use in window making, or if they're actually going to keep everything in place that EFCO has established over the years?"

While Pella's goal with this purchase has not yet emerged, industry professionals can make predictions about the challenges the company will face in integrating its new subsidiary.

"I think that they need to keep in mind that there are distinct differences between these two markets," Carter says. "The type of … codes and compliances and things that are prevalent in the commercial market are really not there in the residential market."

"For Pella, although they have acquired EFCO, their challenge will lie in the successful integration of the two companies, strategies and corporate cultures," Stepe says. "We are looking forward to seeing how this new company will emerge and hopefully provide a positive influence and healthy competition within the commercial industry."

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