US Market Update

Posted by Dave Farley
August 8th, 2012

A few quick thoughts on two markets that are providing members with opportunities but truly are at opposite ends of the spectrum.

As most members know, BC Wood has been active in the Hawaiian Islands for the last decade. Hawaii has proven to be a solid market for companies that manufacture high quality products for the resort, light commercial, and high-end residential construction sectors. In particular, companies in the timber frame, millwork, and Western Red Cedar sectors have all developed sales and market share in Hawaii.

Since all construction materials need to be shipped into Hawaii, BC manufacturers are on an equal playing field with both domestic suppliers and manufacturers from the continental US. For BC companies wanting to develop a market in Hawaii, you can sell contractor direct or to established building product distributors.

One such company who has had considerable success supplying high quality building products to contractors throughout the islands is Seattle based Pacific Source www.pacsource.com

Pacific Source was founded in 1992 by five partners who had the idea to become the top supplier of building materials to general contractors in Hawaii. Their business model was different from Hawaii based building yards in that they believed that Hawaiian builders are best served by having allied with a mainland facility near a major port (Tacoma) with easy access to shipping, mills, and manufacturers. Their model proved to be correct, as since being founded, Pacific Source has grown to having over seventy employees and annual sales of $45 million.

Pacific Source has a six acre yard and distribution facility in Snohomish, Washington and has smaller yards and showrooms on a number of the islands including Kauai, Maui, and Kailulu Kona.

If you’re looking to develop a foothold in the Hawaiian market, it may be worth¬†your while to contact Pacific Source. The key is having a product that is both well suited to the Hawaiian market and is priced well enough that all parties can make a margin. Mark Mason, one of the original partners of the company is expected to be at the GBM next month in Whistler.

Now for the other opportunity, which by all accounts is a far cry from the exotic local of the Hawaiian Islands, is North Dakota. A while back I wrote about the building boom that is currently underway in the northwest corner of the State. Towns such as Williston, Minot, and Watford city are all experiencing extreme housing shortages as thousands of new oil field workers are flocking to the state to work in the booming oil and gas industry.

Today, North Dakota is the US’s number 2 oil producing state, having leapfrogged over Alaska and California. The discovery of vast reserves of natural gas and oil in the northern part of the state have led to a huge influx of oil industry workers moving to the region who require housing. Oil companies have tried to address the shortfall of housing by building temporary housing units known as man camps (picture below), but there remains a serious need for quality residential homes for this well paid workforce.

I will be travelling to the region over the next week to meet with builders, developers, and distributors to gauge the market opportunity for BC suppliers of prebuilt and panelized housing and related products. I will report my findings in an upcoming Wood Connections Newsletter.

For more information on either of these markets, please contact me at  dfarley@bcwood.com or on my cell at 604-728-8786.

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