Faltering housing market prompts AFG plant closure

The recent downturn in the housing market has forced many glass companies, including AFG Industries Inc. of Kingsport, Tenn., to reorganize and reevaluate their market focus. AFG officials announced in a Dec. 8 release that the company would stop production at the Cinnaminson, N.J.,  float facility on or before Feb. 5.

“Since the housing market began to fall this past summer, we have been carefully analyzing overall capacity,” says Fred Wallin, AFG’s vice president of marketing. “The largest capacity was in thin, clear glass for the residential market. Since Cinnaminson has the highest percentage of this product mix, they were the most logical candidate.”

On a year-to-date basis, single family housing during the January-October period of 2006 dropped 11 percent in dollar volume, according to a Nov. 29 release from McGraw Hill Construction.

Bob Price, director of sales for J.E. Berkowitz in Westville, N.J., says he’s not surprised by the AFG announcement.

“They were selling single- and double-strength glass for windows [for residential use] out of that plant. They had to change their course to cut and stay; they had to do it to survive,” Price says. “It’s really bleak right now for window manufacturers.”

Max Perilstein, vice president of marketing for Arch Aluminum & Glass Co. out of Tamarac, Fla., says AFG’s recent corporate restructuring may also have prompted the Cinnaminson production stop.

“AFG and their new management are trying to find their way. Yes, residential is weakening, but not to the point of this,” Perilstein says. “The new guys at AFG are trying to do whatever they can to reinvigorate themselves.”

On May 16, Brad Kitterman replaced 28-year AFG veteran John Litzinger as president and chief executive officer of the company. Kitterman warned in an exclusive e-glass weekly interview in June that “there could be changes in structure and people, but the approach will be based on the condition of the company.” Click here to read the full Kitterman article.

Wallin says no decision has been made about future production at the Cinnaminson facility. “Until the market shows some sustained growth, we will hold our current position,” he says.

Cinnaminson customers will be served from AFG’s Greenland, Tenn., and Quebec plants. There should be no delays in service or product availability, Wallin says.

All Cinnaminson employees will receive a package, with several “key employees” staying on at other operations, he says.