Certainteed Corporation and Firestone Building Products

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Certainteed Corporation

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.

External Lawsuits

  • 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.

Research Strategy

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.
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Firestone Building Products

The kinds of threats and challenges that Firestone Building Products Company is facing includes growth/expansion, demand for green technologies and improving their operational efficiency. Firestone Building Products has been challenged with making moves to improve their product offering and replace older products using innovative solutions, expanding into new markets by acquiring Gaco Western, using green technologies in their products by partnering with organizations with a similar vision and adhering to sustainable business practices.

1. Growth/Expansion

Improved products

Mergers and acquisitions

  • In 2017, Firestone Building Products acquired Gaco Western for an undisclosed amount. This move was expected to strengthen Firestone's position in the commercial roofing market as well as the "residential and commercial building products" market, in an industry that has over 50 major companies producing similar products.
  • This strategic acquisition was done to offer more products (e.g. liquid coating products), widen their customer base and reaffirm the company's commitment as a total solutions' provider. Firestone will also benefit from the more than 60 years’ experience that Gaco Western has in providing customers with high quality products.
  • In the midst of this, Firestone Building Products relocated to Nashville while its parent company, Bridgestone Americas relocated its headquarters to "the corner of Fourth Avenue South and Demonbreun Street".
  • Companies in the U.S. market, including Firestone Building Products Company, generally face other challenges such as managing costs for innovative products, and using green technologies.

2. Green technologies

  • Consumer demands for green products have been increasing as people become more aware of the environmental impact of greenhouse gas emissions. Firestone Building Products partnered with Dow and the International Olympic Committee (IOC) to create "an energy modeling tool to accurately describe reductions in cost, energy and greenhouse gas (GHG) emissions of commercial structures that use innovative polyurethane roofing insulation from Firestone Building Products".
  • The Dow-IOC Official Carbon Partnership is meant to help contractors, architects as well as building owners to be better equipped to identify energy-saving solutions. The energy tool is being funded by Dow and "developed by Oak Ridge National Laboratory (ORNL)".
  • Firestone will make the tool available on its website in 2020 and will help in the reduction of carbon emissions in the industry.
  • "Firestone’s ISOGARD roofing insulation, enabled by Dow polyurethane raw materials" retains more R-value at or below 40 degrees Fahrenheit. It will increase R-value from 5.5 to 6.3 per inch of the roofing.

3. Improving operational efficiency

  • Firestone Building Products in its commitment to consistently provide sustainable products for its customers and adhere to sustainable business practices, launched a FSBP DeForest initiative in Wisconsin which was able to improve its fuel consumption as well as its carbon dioxide emissions in the company's shipping processes.
  • Company-wide, Firestone implemented over 40 energy-efficient projects, and saw a reduction in the use of energy by 7%, since 2012.
  • At its Prescott EPDM plant, it was able to reprocess over "12,700 tons of pre-consumer scrap material" into product between 2013 and 2017.
  • It was also able to achieve positive results for its sustainable use of water with a 37% reduction in the total water used "per tonne of product" and a 50% reduction in total wastewater "per tonne of product".

Research strategy

To provide a deep dive into the challenges and threats facing Firestone Building Products Company, we searched through the company's press releases including those from its parent company, Bridgestone Americas. We also reviewed what is being said in other news sources such as Nashville Post, and Globe Newswire about what is happening in the marketing and what Firestone is doing. Additionally, we consulted industry-related publications such as Prism, Roofing Contractor and Design and Build with Metal to gather information about the company's sustainability efforts and entry into new markets.

From Part 01