Hicksville, N.Y.—In the wake of rising lumber costs, several wood producers have announced they have raised their prices or will do so soon, with several coming as early as the second quarter. Others meanwhile, have chosen to take a wait-and-see approach to gauge market happenings over the next few months before deciding if they will join their competitors. “A price increase affects everybody in the supply chain,” said Robert Belisle, sales and marketing director for Tembec. “We are announcing a price increase for June 1 for a number of reasons. We have an annual price increase we [enact] every year, so this is the time to do it for us. But we’re also doing this now because the price of lumber is going through the roof, primarily cherry and red oak. “Many of the other species we utilize are going up too,” he added.

“Because of the red oak situation everywhere in North America, it puts a lot of pressure on the other species. “Even though we are vertically integrated and control our own lumber,” explained Belisle, “we have to respect market conditions and market dynamics, and we are also affected by that.” Unlike many of the other companies, Tembec will not be raising its prices by 7% to 10%, but rather below 5%. “Overall, we’re looking at only about a 4.7% increase, so it’s not as much as some of the other companies out there,” he said. “The increase varies. There are higher increases on red oak than cherry, for example, and much lower on other species. There are some species that won’t have any increases at all.” “So far, this year has been fantastic for us,” Belisle continued. “We had a very good first four months of the year. We predict a very strong year end. We have been affected the price of lumber, obviously, like everybody else lately, especially in the past month where the price of lumber has gone up so rapidly especially in red oak and cherry. But we predict double digit growth.”

“I’m not sure if we’ll be raising prices now,” said Don Finkell, chairman and CEO of Anderson Hardwood Floors. “We haven't so far and, if we do, it would not be an across the board price increase. When we start looking at our costs, there has been a pretty significant increase in raw materials and we were hoping it would go back down when the weather got better, and we’ve seen it come down some but it hasn’t gone back to where it was. “So I do think that we are probably going to have to have some targeted adjustments on specific products,” he continued. “I don’t know what percentage yet. Basically, red oak is affected more than other species and a lot of that has to do with where it grows. A lot has to do with the competition for it as well, but red oak specifically. I don’t think hickory or pecan will be affected, so we won’t raise prices on those. “We are in the middle of doing our budget for the upcoming year,” he added, “and we haven’t completed that yet. But I have seen some areas higher than they were to the point where we can’t ignore it anymore.”

As of Jan. 1, Lauzon Distinctive Hardwood Flooring put a price increase into effect on its solid products which averages out to about 3.5%, noted Robert Coveney, vice president of sales and marketing. “At the present time, we are monitoring the situation very closely. Right now, we are still in the analysis part of it and there will probably be a review of that for the fall, but not prior to the summer. It may be in the end of the summer period. “What we are trying to do now is,” he explained, “secure our long-term availability with our suppliers. We do have an advantage in that 60% of our production comes from sawmills so, that does give us a little flexibility there. But there is certainly a big strain there.” Overall, noted Coveney, the year “has had a good start for us. The differences that we might have versus many other manufacturers is that we have a number of new players in regard to distribution. About 18 months ago, we started working with FlorStar. We have Elias Wilf as a new distributor as well. We are starting to get some momentum with these wholesalers. Pretty much every single one of our territories has shown an increase this year on top of last, so we are having a good run so far.”

“We are anticipating a 7% price increase effective the first of July,” said Brian Greenwell, vice president of sales and marketing for Mullican Flooring. “This is happening now because our lumber costs continue to go up. We absorbed all those costs that we could as a manufacturer so we’re having to pass these increases along. This is the last increase we are anticipating for 2004 but then we’ll see what happens with lumber in the latter part of the year to see what happens in 2005. “We’re having a strong year,” he continued. “We had a great first quarter. We’re up a considerable amount over last year and we hope to keep that trend going for the rest of the year.

While Columbia has thus far enjoyed sales that are 50% ahead of last year’s pace, “the biggest disappointment so far in 2004 has been the continuing increases in lumber prices,” said David Wootton, president ( FCNews, April 12/ 19). “This has forced us to announce price increases on our 3/4-in. solid products effective May 1.” Columbia’s price increase will be approximately 7% to 10%. Other companies which have either recently raised their prices on solid products or will do so soon include Tarkett, 5% to 8%, effective early second quarter, and Medallion, 8%, effective April 30. “For the rest of 2004 we anticipate sales to continue to grow for Columbia and the hardwood segment,” concluded Wootton. “We continue to be concerned about escalating lumber prices but, given continued strong growth in the housing market generating demand for our products, we expect the market to be able to absorb the recent price increases.” —Louis Iannaco