LP's value proposition statement
NASHVILLE, Tennessee — LP Building Solutions has a value proposition for home builders while continuing to improve its sustainability efforts.
Those were some of the building product manufacturer’s messages shared during a virtual media tour held with HBSDealer this morning.
The Nashville, Tennessee-based company is holding the line at being a responsible corporate citizen while producing products that meet the needs of homebuilders, including ease of installation, durability, and cost-effectiveness.
“When you look at the total picture, our products can be less expensive,” said Casey Smyth, brand manager at LP with a focus on OSB products.
Remember, “Solutions” is the company's name for a reason.
“The reality of our portfolio is specialty solutions and they have an increased price tag over commodities,” Smyth explained. “But we believe the price tag is a small part when taking other cost factors into account such as energy savings.”
For example, LP’s WeatherLogic sheathing provides ease of installation — saving labor costs on the job site — while removing other building envelope products from the equation such as housewrap. The product is also carbon negative.
“We are able to create additional value that can help combat the initial price tag,” Smyth says.
The housing climate
Aaron Howald, vice president of investor relations and business development at LP, says, “2023 is finishing at a much stronger than it started and what was expected.”
The vice president places housing starts to reach a pace of 1.4 million starts this year in comparison to previous expectations of 1.2 million.
“Single-family starts have been richer in the last 90 days and performing at their strongest rate since the end of 2021 and beginning of 2022,” Howald notes.
Interest rates are beginning to pull back, which could result in many homeowners and remodelers waiting on the sidelines to enter the picture. Rates well above 7% held back potential home buyers as home prices continue to rise. And those sitting on a 3% mortgage rate certainly weren’t willing to trade for a rate of 7% or greater.
The same can be said for remodeling as big projects, and homeowners borrowing against home equity, took a back seat due to interest rates and inflation. Speaking of inflation, that was also a catalyst, which forced home improvement spending and home buyers to divert their funds to other household matters.
Howald made the point that a housing shortage remains, particularly among existing homes. And the average home in the United States has reached an age of 40 years old. That’s a lot of vinyl siding ending its lifecycle.
Coincidentally, this afternoon the National Association of Realtors released revised projections and now forecasts existing-home sales to reach 4.71 million in 2024 from 4.1 million anticipated in 2023.
“We may be at peak, we may be coming down,” Howald said regarding interest rates. “But housing is a fundamental need. We’re going to build those homes.”
Sustainable practices
“LP SmartSide is carbon negative on the whole. That’s an exciting value proposition for us. That’s the right thing to do,” says Cameron Bailey, senior product manager at LP.
Bailey points to a study that shows 500 homes built with LP products offset carbon emissions from 155 automobiles on an annual basis. That’s an important sustainability feature for Millenials and Gen Z with both gaining more purchasing power.
The timber used in LP products is managed through the Sustainable Forestry Initiative (SFI) with diligent forestry practices involved. Most of the products derived from the process stem from Aspen trees, which can regenerate shoots and suckers arising along its long lateral roots.
Bailey uses a paper drinking straw comparison. While a paper straw meets its purpose, its performance and durability is nowhere as solid as the traditional plastic straw.
The senior product manager says the same of LP products. While they might be sustainable and carbon negative, LP SmartSide lap siding is able to withstand up to 200-mile-per-hour wind gusts.
“There is no trade-off in durability. That’s a big advantage for us,” Bailey says.
