CanWel expands engineered wood products

VANCOUVER—CanWel Building Materials Income Fund, through its subsidiary, CanWel Building Materials Ltd., has cut a deal with Alpa Lumber's flooring division, Alpa Floor Systems Inc., to start distributing AlpaJoist engineered floor systems. AlpaJoist is a trademarked engineered wood product that, until now, had been distributed only in the Greater Toronto Area through Alpa's own network. CanWel will add the AlpaJoist line to its existing Engineered Wood Products Program and distribute it nationally. The Engineered Wood Program is a new one for CanWel, created with the addition, only weeks ago, of Boise's engineered wood trusses. That line competes head on with CanWel's main competitor, Weyerhaeuser, and its popular Trus Joist product. It's a market that is brand new for CanWel, but one it considers ripe for development. Used primarily in the construction of floor and roofing systems in the new home construction and renovation segment, AlpaJoist is popular with the home building industry in the GTA because of a unique ’Äúwindow’Äù system in the joist's panel, which allows for fast and efficient installation of plumbing, heating and electrical systems. Renovation spending totalled $8.6 billion in the second quarter, up 8.1% from the same quarter in 2005. Acquisition costs rose 3.4% to $1.8 billion.

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Goodfellow provides mast for Blue Nose II schooner

Delson, Que.—Goodfellow, the lumber products distributor, has recently completed a 100-foot long glue-laminated wood beam that will be used to make the new mast for the famous Blue Nose II schooner. The beam was fabricated at Goodfellow's head office facility here and shipped to the home of Canada's most famous sailing vessel, Blue Nose II, in Lunenburg, N.S. The square beam is 22 inches wide and made of 250 pieces of Douglas fir that were glued together in Goodfellow's Goodlam glue-laminated wood factory. Comprising more than 4,000 board feet, it weighs six tons. A glue-laminated mast was preferred to a single timber for its increased durability and because the curing process of a tree trunk can take up to seven years. Transporting the giant beam required securing it on a special trailer that measured more than 121 feet in length. Special permits and equipment were required and the truck had to be escorted by police cars all the way to Nova Scotia. Upon reaching Snyder's Shipyard, it was shaped’Äïby hand’Äïinto a ship's mast. The Bluenose II was built to commemorate its predecessor, the Bluenose, Canada's most famous ship. Launched at Lunenburg in 1921, it was, for a time, the world's fastest sailboat. It won the International Fisherman's Trophy in 1921, 1922 and 1923. It wrecked off Haiti in 1946. The new mast will be installed on the Bluenose II in summer of 2007.

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Lowe's gears up for Canadian launch

TORONTO—Plans for Lowe's foray into Canada have been kept, for the most part, under wraps since being announced almost a year ago. Lowe's plans to open between six and 10 stores in 2007, but has, to date, admitted to securing only one property (in Hamilton, Ont.). In addition, the Canadian buying team has been assembled and has been performing line reviews with suppliers for the past several weeks. Now, however, Lowe's is getting ready to make its presence in Canada felt more strongly. On Sept. 21, from its new corporate headquarters in Toronto's north end, Lowe's will make some announcements about its operations here, both to the media and among some government types. HARDLINES expects the world's second-largest home improvement retailer to announce the groundbreaking of at least two sites, with Hamilton being one likely contender.

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SPECIAL REPORT: U.S. homebuilders waiting out the market's slide

NEW YORK—America's largest production home builders, stunned by how quickly buyer demand has eroded this year, are assuming a defensive posture that includes reducing overhead, cutting back production and all but halting land purchases. For many large builders, the current market downturn has become a waiting game, where they hope to strengthen their balance sheets and build their liquidity in preparation for a rebound, which will happen, they say, only when consumers are convinced that home values and prices won't deteriorate further. That was the consensus opinion among 14 builders’Äîincluding 12 of the largest 15 in the country’Äîwhose senior-level executives spoke last week at the Homebuilders' Symposium, co-sponsored here by Credit Suisse First Boston and Hanley Wood Market Intelligence. Several builders also insisted that they are trying to hold the line on their pricing and margins, even as those margins have been diluted by incentives, such as option upgrades and lower mortgage rates. These incentives have run rampant in many hot markets, as companies try desperately to move unsold inventory. "This cycle is happening faster and going deeper than a lot of us thought it would," said Tim Eller, CEO of Centex Homes, the industry's fourth-largest builder, which has been among the most aggressive in using incentives to entice reluctant buyers. The industry's sales in the second quarter of this year were down 21%, and cancellation rates have skyrocketed in many markets. Every builder at the symposium, to a greater or lesser degree, agreed that the current downturn is the result of prices rising too high (often driven by the presence of speculators in hot markets) and too many homes being built. Consequently, many of the builders have scaled back their production for this year. Most of the builders thought that business would be bad through next year, but there was less agreement about when demand might return. Chad Dreier, CEO of The Ryland Group, the industry's eighth-largest builder, thinks the market has "plateaued" and that "2008 would be better than 2007." But Tony Mon, CEO of Technical Olympic Homes, the 12th-largest builder, was far more pessimistic in his comment that the turnaround might not happen until 2009 or even later.

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Kingfisher posts 2Q results, anticipates return to profitability

LONDON—Retail profits in the first half of the year may have been down by 20% for Kingfisher plc, the giant U.K. holding company that owns B&Q, but the drop was less than expected, and actually flat for the second quarter. Not only that, but CEO Gerry Murphy expects profits to grow in the next quarter. Sales for the first six months were up 6.6% to ¬£4.35 billion ($9.17 billion), while retail profit dropped 19.6% to ¬£231.5 million ($487.86 million). "The continuing weakness of the U.K. home improvement market has again impacted B&Q's overall sales and margin performance," said Murphy in a prepared release. "However, management's action program is now showing encouraging signs of progress." Despite what Murphy called "signs of stabilization" at home, he expects the company's best growth to continue coming from international markets, where sales were up 16% and retail profits were up 9%. Kingfisher has opened 19 new stores in seven countries in Europe and Asia during the past six months, including its first two stores in Russia. Kingfisher now operates 339 stores outside the U.K., which account for half of total sales.

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Chicago mayor's veto topples big-box "living wage" bill

CHICAGO—Mayor Richard M. Daley has vetoed an ordinance this city's Council passed in July by a vote of 35-14 that requires large-format retailers like Wal-Mart and Home Depot to pay their workers higher wages and benefits. Daley used his veto authority for the first time in his 17 years in office to block a law that would have made big box dealers’Äîthose with at least $1 billion in annual sales and stores 90,000 square feet or larger’Äîpay their workers at least $10 per hour and the equivalent of $3 in fringe benefits by the year 2010. Daley appears to have responded to threats by several dealers that this ordinance would keep them from opening stores within the city's limits. Target, the department-store chain, called the ordinance the result of "an extreme agenda being promoted by special-interest groups." Other dealers said Daley's veto would make Chicago "business-friendly" again. The mayor stated that he did not think the law would achieve its desired effect of ensuring that everyone in the city is working for a "decent wage". He also wasn't too thrilled when an alderman who supports the ordinance brought in the mayor of Santa Fe, N.M., and a supervisor from San Francisco to testify at a City Council meeting last week about similar laws their local governments have passed. Two days later, with the way already paved by Daley, city councilors could not muster enough votes to override the mayoral veto and the big-box ordinance failed to pass.

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