Building Products Industry Feeling Market Pressure: Principia Study Sees Bright Spot in Masonry...

EXTON, Pa. -- Although the general economic climate for the majority of building and construction products has softened over the past 18 months, the masonry veneer industry is one product that has witnessed exciting changes with plenty of growth potential yet to occur over the next several years. The $1 billion veneer category that began as a cottage industry has grown rapidly in recent years in both residential and commercial construction. A new market study by Principia Partners is the first comprehensive study to provide clarity and crucial insights on the residential and commercial markets for these products in North America.

Jim Morton, a Senior Partner at Principia explains "We are very excited about conducting this in-depth business assessment. There are many applications for these products and Principia is best positioned to analyze the numerous opportunities for this industry. Masonry veneer products are highly versatile - they have evolved into highly aesthetic and exceptionally low maintenance products with a dizzying array of choices. At nearly half the cost of quarried stone and traditional brick, this "defy-the-eye" category is growing as availability increases."

In addition to traditional exterior cladding, residential applications also include interior accent walls, chimneys, mantels and more. Other exterior uses include retaining wall facing, outdoor fireplaces, and any application where an architectural stone or brick appearance is an asset. Masonry veneer is widely used in commercial facades, foundation facings, archways, courtyards, entrance pillars and other decorative applications. Products have also penetrated lobbies and interior spaces at retail stores and a wide range of non-residential structures.

Mr. Morton continues "Two companies dominate masonry veneer, followed by a second tier of regional producers who are growing apace. As the category grows, members of the newly formed Masonry Veneer Manufacturers Association (MVMA) face competition from traditional brick and quarried thin-cut stone suppliers as well as producers of materials like polyurethane and polypropylene that also simulate the look of natural stone and brick. Leaders in vinyl, stucco, precast concrete and cementitious siding are eyeing the category as are multinational producers of aggregates and brick."

Unlike most exterior cladding materials, manufactured stone and brick veneer have flowed through a variety of one-step channels. These channels are diverse, including distributors serving masonry contractors, stucco applicators, vinyl installers and fiber cement siding contractors. Masonry veneer products are also found at brick and block yards, hardscaping centers, hearth and home stores, landscape supply yards, as well as drywall and ceiling distributors.

Principia's study will serve as an important baseline analysis for forecasting and business planning purposes by existing and new industry participants. Using 2007 as the baseline, the study will analyze the drivers and trends of the masonry veneer market by region, distribution channel, market segment and material type, and will provide forecasts covering the next five years.

The study will provide insights into current and future products and competitive positioning, and will help companies anticipate unmet customer needs. Key issues to be addressed include:

* Changing trends in product substitution

* Channels of distribution to key markets and regions

* Supplier strategies and approaches to market

Results of the report will provide subscribers with critical market data and analyses essential for planning purposes including:

* Up-to-date assessment of the masonry veneer residential and commercial markets

* Assessment of the major products

* Identified product development needs and channel opportunities

* Market share review for producers

* Profiles of over 30 companies active in the business

* Strategic insights into this dynamic industry

Principia Partners is a leading international strategy consulting firm, and has extensive experience in building products and plastics industries. In particular, the Firm has closely monitored the market for building products over the past 10 years through various research efforts. For more information, visit the Industry Reports section of the Publishing portion of the company's web site at www.PrincipiaConsulting.com. A prospectus of this study is also available by calling John Pruett at 800/378-8330, extension 247.