CertainTeed Corporation, a subsidiary of French Saint-Gobain SA, faces numerous challenges in the marketplace to continue to grow and stay financially sustainable. They are currently trying to grow in an ever-expanding solar market, growing by acquisition to expand into regional markets, and facing external lawsuits that can impact the bottom line.
The Solar Shingles Market
- CertainTeed is looking to expand in the solar market. They have spent 10 years in the solar shingles market, competing alongside Tesla and solar-specific companies.
- CertainTeed's approach to handling solar shingles differed from other companies by bringing the entire process, from creation of shingles to installation, in-house. The stated goal of this is to support better quality and keep costs down for consumers, as other models would require working with multiple subcontractors to handle different parts of the installation for a solar roof.
- The market for solar shingles is growing, but so are the number of competitors in the marketplace, ranging from startups to expansion by established construction companies.
- CertainTeed's shingles also run at a higher cost than other shingles, with a CertainTeed's shingle costing $2.82 per watt compared to $1.50 per watt, on average, for others.
- CertainTeed appears to rely on its history and reputation to mitigate some cost issues with its product, though it does face challenges in this space due to the number of competitors and pricing.
Organizational Changes: Growth and Acquisition
- In 2015, CertainTeed opened a new office to serve as the North American headquarters for its parent company, French construction conglomerate Saint-Gobain, in a bid to expand Saint-Gobain's footprint in the North American market.
- The company has been expanding via acquisition, including Continental Building Products, Norton Industries' wood-building component, and Finish Line Products in the past 18 months alone. These purchases are designed to move CertainTeed into more regional markets.
- This is likely to help maintain business in the construction market, which is expected to grow in certain areas of the country. Adapting a regional strategy could help CertainTeed maintain growth in some areas while others slow down.
- An affiliate company that CertainTeed sold products for, DBMP, filed for Chapter 11 Bankruptcy in January 2020 over the payouts for numerous asbestos complications claims. The structure of the bankruptcy takes the liability away from CertainTeed.
- There are also at least two class action lawsuits in progress against CertainTeed for defective shingles.
- In the past, CertainTeed has settled in class-action cases around their siding and may choose to do that again for the shingles cases. Settling may be a way to prevent financial and reputation losses from the lawsuits.
We began by looking into major databases to learn more about CertainTeed's product line and business history. We also dove into their press releases to learn more about the work they performed. We also reviewed news stories about CertainTeed to see if any notable news on their strategy or challenges was listed. Finally, we reviewed trade publications and trade industry sites to learn more about CertainTeed's work in certain markets.