International Markets

Drawing Layout

If you use plan, elevation, and section drawings to illustrate your products, I recommend you organize them using "third angle projection".
Each surface on the shaded 3D object is projected onto the surface of an imaginary box.
Visualize the box unfolding to display each of the 2D projections.
Each of the projections is laid out on a sheet of drawings in a particular arrangement.

The top shows a a plan.

The central image is the front or main elevation.

Immediately to the side of the front elevation are the left and right elevations.

The far right shows the rear elevation and the bottom is a view of the object from below.

Sectional views are laid out in the same relative positions as elevations.

I recently worked with a manufacturer which has product literature with inconsistent drawing layouts. This added confusion to an already complex product presentation. A previous client had difficulty because its inconsistent detailing practices caused costly screw-ups on the production floor. My friend, Vladimir Paperny, has told me about a highrise project in Russia where the structural steel was fabricated backwards because the engineer and architect used different projection systems.

Most architects are not familiar with the term "third angle projection". But most have internalized the method (at least those who began their careers drafting with T-square and triangle).

This advice is particularly important to manufacturers based outside of the US since "first angle projection" prevails some parts of the world. As you make plans to enter the US, revising your drawings is an appropriate part of your technology transfer.

Drawing: CC BY-SA 3.0

Innovations at International Builders Show - Day 2

Observations today relate to environmental impacts of building products

1. Only a few exhibitors had booth signage proclaiming, "sustainable" or "green". This is not to say they are not promoting green products -- energy and water conserving products were there in abundance. But the market, at least the home builder market, is no longer painting itself green. Few booths had signage tauting recycled material content, VOCs, LEED, or other green buzz words. It is just a part of regular business now.

2. Not withstanding the above, IBS and the co-located Kitchen and Bath Industry Show are full of signs of conspicuous consumption. 12-tall doors. Shower drains that automatically light-up with colored LEDs when wet. Ironing boards and irons with digital controls -- for $3000. And more. Or, in the spirit of excess, more and more and more...

3. Many foreign manufactures were at the show testing the market or introducing products. I was shocked, however, that several of them would not disclose ingredients in even general ways. A Polish company, for example, has an innovative dry-stack masonry system made from perlite and binders. Other than saying that it did not contain portland cement, they would not disclose anything about the binder. There reluctance to disclose will hinder their introduction at a time when the US construction industry is increasingly asking for transparency.

Cruise Ships: a Building Product Market

It could be time for you to put to sea as the cruise ship industry continues to grow. From 2015 to 2016, 17 more new cruise ships will come online, with more to follow.
Many of these are gigantic vessels capable of carrying thousands of passengers plus crew, dwarfing existing craft.
It is probable that vessels will grow in size until they are better compared to small cities or at-sea resort towns that do not put into port but will be tended by smaller ships and aircraft landing on the top deck.

The cost of the structural, motive, and infrastructure systems of these vessels is enormous, and require innovative construction techniques such as this covered dry dock.

The investment in facades, furnishings, lighting, decor, equipment, elevators, and other "building products" will be similarly titanic. Many are replete with shopping, theaters, dining, fitness facilities, and accommodations that would make a Las Vegas hotel seem modest in comparison.

More, older ships will be refurbished to compete.

While there will always be cramped interior cabins and crew quarters, there is also a focus is on elegant suites for those with the resources.

One reason for this tread is that rising sea levels make investment in coastal resorts a risky proposition.  This accounts for the interest in floating platforms that are not necessarily designed for cruising. As population distributions shift in response to global warming, the platform can be towed to more attractive locations.

Beyond the recreational market, plans -- both serious and theoretical -- are underway for floating cities. Part of the appeal is the perception that these private islands are havens from social unrest, regulations, ecological apocalypse, and taxation.

At the (somewhat) smaller end of the spectrum, many personal yachts are now being supersized, as this recent design by Zaha Hadid suggests.

Her's is not the only A/E/C firms have entered the market. They also are active in the development of ports and landside facilities in emerging markets and to accommodate larger ships.

Some terminals will become destinations in their own right with profound implications for the future of travel, conventions, business meetings, and more.


Contrary to the maxim, a rising tide does not float all ships, only the businesses that are prepared.

This is a competitive global market. Many existing architectural products will require modification (or at least additional testing) to prove seaworthy. The decision making process, buyer behavior, contractual and legal implications, and many other business factors are different than land based construction.

Call me to discuss your strategy launching into this growth market. 

Michael Chusid
+1 818 219 4937

5 Observations about Prefabrication

Why is Australia so far behind other nations 
when it comes to prefab or offsite site modular?

That's the question someone posted at Australian Construction Innovation, a LinkedIn group. Curiously, I hear the same question about prefabricated construction in the United States. So the question is one of perspective.

My sense is that prefabrication is at exactly the right level. Here are five reasons:

1. Prefabrication is very common.

Consider: Prefabricated trusses, metal buildings, precast concrete structures, HUD Code (mobile) housing, prefabricated classrooms, panelized wall systems, and more. Cutting and bending concrete reinforcing used to be done on site; now its prefabricated. I can cite many similar examples.

2. Large Scale Integration are Vulnerable to Economic Cycles. 
I was a consultant to a firm that built a highly automated factory to prefab panels for complete building structures. The high-performance, semi-finished panels assembled quickly in the field to enclose entire buildings in a single day. Then the Great Recession of 2008 hit. While it hurt all of us, capital intensive companies were hit harder. When work fell away the firm had to idle the factory and then went bankrupt due to financing costs.

3.  Site Work Can't be Prefabricated.
Next time you hear about how quickly the Chinese can erect a prefabricated building, note that the days until completion does not include the time it takes to run utilities to the site, place foundations, and attend to other sitework. When projects are built on site, above ground construction overlaps the sitework.

4.  Prefabrication Imposes Design Restraints.
While fabrication automation continues to improve, no prefabricated whole-building system can provide as much design flexibility as a project assembled from open sourced components. Designers and developers like flexibility. They also require it to deal with unique site conditions.

5. Site Assembly Is Amazingly Efficient.
This is my favorite explanation. Today's construction systems can be really efficient. Consider what the screw gun and pneumatic fasteners mean to the time required for framing. Concrete masonry units may take more time to set than precast, but they are in inventory and can can be installed in the time it takes to engineer, get approvals, fabricate and ship prefab components.

Looking ahead, the whole discussion about prefab will change when we start using onsite systems to print structures, assemble them with robots, or using other emerging technologies.

prefabAUS, an Aussie trade association that promotes prefabrication says, on its website, "Prefab has often been referred to as ‘architecture’s oldest new idea’." They chronology begins with the Romans in 43 AD. I push the beginning of prefabrication back to even earlier to the tents of nomads.

Animation from Wikimedia Commons 

Website Review: Paidon Atlas of recent architecture

To succeed in building product marketing, it is helpful to stay in touch with trends in the industry. If your product is specified by architects, that requires you to read or scan architectural websites or blogs. A new website,, may be helpful in this regards. It claims a database of over 130,000 images of more than 3000 buildings from 115 countries and more than 1500+ architects.  All the projects were completed in the 21st Century, and the numbers above suggest the complexity of the contemporary global market for architecture.
Southern California? Nope, Angola.
Any database or collection reflects the interests of its editor or curator, and the editor of this website is clearly looking at a very narrow range of buildings. The website says it presents "architecture for architects". This means, apparently, that it is about buildings designed so that other architects will look at them as say, "My, isn't that interesting. I wonder how he gets away with doing something outlandish like that? Maybe I should copy this and I will be considered a great architect as well."

The database comes with filters to help you search the site; interestingly, there are not filters for "style" - so don't look for "traditional" designs - nor for "cost per square foot or square meter" criteria. There is almost no discussion of building performance, and discussion of building materials and performance are given short shrift. In other words, the database is for architecture as still life.
Tessellated Facade.
The editor also fails in accuracy and consistency. The filters allow you to search for "concrete" and "cement", apparently unaware that cement is a component of concrete.  And while a photo featured on the home page has a tessellated facade, it is not listed under the "tessellation" filter.

Building Product Marketing
Still, the site may be helpful to some building product companies or reps. If, for example, you are preparing to call on an architect to discuss the use of your material on their new airport terminal project, you can look at other recent examples of airport terminals or bring up an example or two of the firm's work. If the project happens to be in Kazakhstan, you can see photos of two recent projects in that country. By studying these and other projects, you may be able to ferret design trends that can influence your product development targets or marketing messages. This will help you keep up with the buzz, at least with the buzz of the designers on the team.
Of course, you can probably do all of this just as quickly and perhaps more thoroughly with Google, if you are willing to forgo the editor's taste making sensibilities. The website is published by Phaidon, a major publisher of high-quality books about art and architecture, and costs $240 per annum. Maybe your local university library has a subscription, or Phaidon's 30 day free trial will meet your needs.. Then you can save enough money to purchase one of Phaidon's coffee table book so you can put it in your office, browse the pictures at your ease, and impress your boss, coworkers, and visitors.

Construction Chart Book, 5th Ed.

The Construction Chart Book: The US Construction Industry and Its Workers 5th Edition, (2013), a free download, is a valuable resource for building product executives. Published by The Center for Construction Research and Training*, it is a trove of information about construction industry employment demographics and trends. While most useful, perhaps, for economists, insurance companies, safety officers, and policy makers, it contains nuggets that can help you digest new product opportunities and paths to market.

Consider the following from the Main Findings of the report, with my comments:

About 80% of construction payroll establishments had 1 to 9 employees.
You surely don't have time to send sales reps to these small firms, so your marketing communication or distributors better find a way to reach them.

About 12% of construction firms used day laborers; 22% of employer firms had no full-time employees on their payroll, and 8% hired temporary workers through temporary agencies.
With a transient work force, you better support your customer by offering products that are simple to use and hard to screw up, and training programs that can be given quickly on the job site.

Construction employment is expected to grow by 1.84 million wage-and-salary jobs, or 33%, between 2010 and 2020, more than double the 14% growth rate projected for the overall economy.
Where will all those new employees come from? Beyond normal efforts to build brand awareness among newcomers to the industry, manufacturers should also consider ways to recruit the new work force by training them and creating networks to connect trained installers to potential employers among your customer base. I wonder, however, what effect robotics and construction automation will have on this trend; perhaps not much within 5 years... but after that?

About 2 million construction workers in 2010 were born in foreign countries.
What can you do to transfer brand loyalty across borders?

More than 75% of Hispanic construction workers were born outside the United States.
Your product labels, installation instructions, advertising, and field representatives may need to be bilingual.

Between 1985 and 2010, the average age of construction workers jumped from 36.0 to 41.5 years old.
At some point, the trend will reverse. Are you able to communicate with digital natives?

Union members in construction have advantages in educational attainment, wage and fringe benefits, training, and longer employment tenures, compared with non-union workers.

Look for opportunities to partner with unions for training, etc.

The number of fatal injuries in construction dropped to 802 in 2010 from the peak of 1,297 in 2006. The decrease in recent years was mainly due to the decline in construction employment during the economic downturn.
In other words, fatalities haven't significantly decreased. Everyone in our industry has a moral obligation to improve safety.  How can your product, its packaging, the tools required to install it, etc, create a safer workplace? Make the contractor's chief safety officer your ally.

In 2010, overexertion in lifting caused 38% of the work-related musculoskeletal disorders among construction workers.
Lighter weight material? Improved packaging? Simplified lifting and installation procedures? These are important product enhancements.

* Published by CPWR – The Center for Construction Research and Training, produced with support from the National Institute for Occupational Safety and Health grant number OH009762.

Learning from Lighting

Even if you do not make lighting products, any building product manufacturer can learn something from these excerpts from this article:
Lighting industry business leaders reflect on
market evolutions and product innovation.

In 1986, lighting designers and specifiers working on a job reached over their drawing boards and pulled a manufacturer's 4-inch binder off the shelf, filled with a thousand cut sheets of product details. If the date on the page was more than a year old, the designer would have to call their local rep to verify the technical data. The rep would then call the factory to check the information. It could be days before the lighting designer received the information that they were looking for, a process that could be repated multiple times until the job was complete.

...there was often little time available to explore different design options and alternative product selections. Today, the situation is somewhat reversed and while the design/buid process is faster and more integrated, which provides more access to product information, there is still a lot of pressure to make timely product selections that maintain the projects integrity.

I am struck by the fact that many younger lighting designers have never laid a hand on a pencil or a piece of paper in their design work. Their world is on of electronic design and calculation tools.

It used to take lighting manufacturers three to four years to develop new products. It wasn't urgent to speed to market because products were around for 20 to 30 ears. Today, if you took the same amount of time, you would miss the entire product life cycle.

Since light sources can now last upwards of 50,000 to 60,000 hours... there is an extreme amount of pressure on winning bids because it could very well be four times as long until a building owner considers lighting renovations.

...few borders remain. Solid-state technology is the primary force behind a new cycle of global industry consolidation, and this is opening up world markets to small and large companies alike. Voltage differences, country to country, are no longer an issue.

New lighting companies are being formed, and grown, often with the intent of being primed for acquisition to a larger conglomerate.  ...As companies consolidate around the world, it will actually result in innovation and new lighting technologies reaching [the] market even faster.

You must have an international perspective on product development and the supply chain to be competitive.

Douglass Baillie
Architectural Lighting MagazinePublication date: December 1, 2011

Metrication Update

Two examples of metrication crossed my desk recently, demonstrating opposing approaches to implementing metric units in the building products industry.

1. One of my clients is converting its sales literature from inch-pound to metric (with inch-pound units also shown in parentheses).

#11 1-3/8" dia.
2. The Concrete Reinforcing Steel Institute (CRSI), reversing its decade-old endorsement of a soft-conversion to metric, now urges its members to use inch-denominated size markings.

The various approaches represent the different market conditions confronting each organization.

In the first instance, the US-based firm is aggressively moving into international markets and needs to speak the lingua franca used for most of the world's construction. The change will not harm domestic sales, since the company uses digital-fabrication to make bespoke parts without regard for the designer's system of measurement.

CRSI, on the other hand, focuses on regional and national promotion. As a commodity product, little quantities of rebar is exported. The industry began marking its product in nominal metric sizes when it looked like the Federal government was serious about enforcing a 1991 Presidential Executive Order mandating metrication. However, the Federal Highway Administration (FWA) retracted the requirement in 2008, and most building construction in the US remains firmly inch-pound. (The primary exceptions Government agencies such as the Department of Defense.)

Traditional rebar diameters are stated in 1/8 inch increments; #3 = 3/8 in. diameter, #12 = 12/8 in. = 1.5 in. These units just make sense when constructing a 1 ft. thick wall with 3/4 inch concrete coverage over rebar that must be spaced to allow passage of 1-1/2 in. dia. coarse aggregate. In CRSI's soft conversion, these correspond to #10 (9.525 mm) and #40 (38.1 mm) respectively. Soft conversion reduce the cost of producers, but frustrated everyone else. Builders using inch-pound had to convert sizes to traditional nomenclature to calculate positioning. And fractions of a millimeter confounded those used to using real metric sizes, where #30 bars have 30 mm dia.

Many US industry sectors are now firmly metricated. (When was the last time you bought a fifth of whiskey?) Yet it is unlikely that there will be a comprehensive countrywide construction conversion anytime in the foreseeable future.

Until then, each building product manufacturer will have to "weigh and measure" whether and when to embrace metric based on their unique marketing "metrics."

By the way:

"Metrication" is term for adopting metric measurements.
"Metrification" is term for using poetic meter.

Don't use trade show to evaluate US market.

It is easy to get lost among the other exhibitors
at a trade show unless you know what
you want to achieve and have a plan.
Foreign manufacturers sometimes exhibit at North American tradeshows, "to see what are our prospects in the US?" This is seldom an effective type of market research.

There is a classic parable about two sales reps sent to a distant country to peddle shoes. After a day, one sent a message to company headquarters, "Coming home on next boat; no one wears shoes here." The other cabled, "Send lots of shoes; no one wears shoes here." But neither would have a valid impression of the true market if they formed their opinions while visiting the beach.

A company from the Netherlands, for example, exhibited at a recent World of Concrete. Not only is their brand unfamiliar in the US, their product category and technology are also foreign to US contractors without international experience.  The staff working the booth were unable to address technology transfer issues such as US building codes. Even their booth and sales skills reflected a European aesthetic and approach to business that does not communicate effectively to North Americans. Yet they were trying to judge the attitudes of American customers.

The Dutch exhibitors were frustrated since they did not know how to explain their product to American contractors. They were trying to "sell" instead of trying to "learn". Their mission may have been more successful if their effort was designed as a real market research opportunity.

For example, they could have conducted "aisle intercept" survey, asking people passing their booth to stop and answer a few questions. A drawing for a trip to Holland would have caught attendees interest and begun the process of building goodwill.

An Italian exhibitor had invested in a 400 sq. ft. island booth in which they had assembled a structure built with their building system - a material costing more than domestic products. Their system may have had benefits that justified the costs, but we will never know. That's because none of the eight executives working the booth spoke fluent English. While they had employed a translator, the individual struggled with the technical jargon of construction.  More, the firm built their demonstration project around the perimeter of their island, then sat inside the display as if they were hiding behind walls. One hopes that, at least, they enjoyed their junket to Vegas.

What are the alternatives
Before investing in the expense of exhibiting at a trade show, do some due diligence. It can be helpful, for example, to attend the trade show as a participant before deciding to exhibit. This gives you the chance to see your potential competitors. And informal discussions with people attending the show can also help you understand the market. Some of Chusid Associates' clients go further, hiring us to "walk the show" with them, so we can point out trends and identify key players.

You can also use a show for private presentations. One of our clients had us recruit targeted prospects to private demonstrations where our client could hold brief but highly informative interviews. Similarly, trade shows are a great opportunity for focus groups, since you can recruit a panel that reflects regional diversity.

One final suggestion: If you are exhibiting at a trade show to "stick a finger in the wind" as a way to judge a market, have your signage and literature translated into English. And avoid using idioms like "sticking a finger in the wind," an expression that might not translate well.

Made in Canada

The FTA will provide the U.S. construction industry with greater access to a dynamic and growing budding market. Canada has a population of about 10 percent of that in the US., but a construction industry that is 17 percent of ours. This greater per capita expenditure on construction probably stems from two factors. First, Canada's population is distributed over a greater area and has a lower density, requiring a greater commitment of funds to the construction of highways and other services to link its population. Second, the northern climate of Canada typically requires more substantial, weather-resistant buildings.

This is an encore of an article Michael Chusid wrote two decades ago. In retrospect, the tone of the article sounds like it was written by a Chamber of Commerce. While the two countries do have extensive trade with each other, and ideas and finances move across the border with ease, digging in the dirt remains closely linked with a particular region, and cultural and trade patterns remain obstinate. Updates are shown below in blue.

The construction industry is becoming part of an international marketplace. To stimulate the flow of building materials, ideas, and capital across borders, barriers to free trade are being dismantled around the world. In Western Europe, all tariffs and barriers to Common Market trade will be eliminated by 1992. Closer to home. the recently ratified Free Trade Agreement (FTA) will eliminate, over the next decade, virtually all tariffs between the US and Canada and will liberalize regulation of cross-border investments. This will affect the availability, distribution, and competitiveness of building materials and services on both sides of the 49th Parallel.  [The Canada - US Free Trade Agreement has been broadened into the tri-lateral North American Free Trade Agreement.]

Because most of Canada's population lives within 200 miles of the US. border, Canadian cities are often closer to major U.S. cities than they are to other Canadian population centers. Toronto, for example, is closer to both Detroit and Cleveland than it is to Montreal. This should make the distribution of building products move more in a north-south than in the east-west direction of current Canadian commerce. Also, many of the building-product manufacturers who currently maintain separate companies on both sides of the border may now find it economical to consolidate their operations. In the building industry, such multinational operations could make it increasingly difficult to specify products on those publicly financed jobs with a "Buy American" clause.
Boral is one company that divides it trade regions by longitude, not latitude.
But overall, U.S, architects and builders will have an increased range of brands and products from which to choose, better access to Canada's significant building research and. through Canada's traditional links with Great Britain and linguistic ties with France, a bridgehead to European construction technology. Consumers in the U.S. also will benefit from lower prices on imported Canadian products, timber, and construction materials such as gypsum, steel and aluminum. [Lafarge North America is an example of a French firm that entered the US through Canada.]

Differences in industry standards between the two countries may remain a disguised barrier to trade. For example, U.S. and Canadian building authorities have different requirements for fire resistance, which frequently requires expensive duplication of testing and classification by both Underwriters Laboratories (UL) and Underwriters Laboratories of Canada (ULC). The Treaty commits both countries to work towards resolving such conflicting standards and actually establishes procedures to unify lumber standards. [Canada is fully metric, the US remains primarily on the inch-pound system.]

The FTA also seeks to encourage the movement of design and construction services across the border. It calls upon the American Institute of Architects and the Royal Architectural Institute of Canada to develop mutually acceptable standards for the licensing of architects. Upon review of the recommendations of the professional societies, the parties to the Treaty are required to encourage their respective states and provinces to extend reciprocal recognition to each others qualified architects. Other provisions of the FTA encourage the bilateral practice of engineering, building, developing, general contracting, and special trade contracting. [While all Canadian provinces accept US architectural licenses, most US states still do not grant reciprocity to Canadian architects.]

Canada and the U.S. are already each others' best trading partners. But now, with the FTA, companies can plan integrated North American marketing strategies with less fear of trade skirmishes. Canadian brands like Domtar and MacMillian Bloedel have already found an active niche in U.S. markets. and progressive U.S. companies continue to strengthen, their position in Canada. [MacMillan Bloedel was acquired by US-based Weyerhauser in 1999, and Domtar has most of its operations in the US.]

While some companies will undoubtedly face painful new competition due to the FTA, the U.S. building industry will benefit from the agreement. Abroad, we will have greater access to Canadian markets for goods and services. And at home we will enjoy an expanded choice of materials and reduced prices on imported products as we see "Made in Canada" on more building materials.

Have a question you'd like us to answer?
Send an email to 

By Michael Chusid
Originally published in Progressive Architecture, Copyright ©1989

Globalized Construction Branding

April 5, 2011 CEMEX, S.A.B. de C.V. (NYSE: CX), announced today the launch of its first global brand of ready-mix concrete, Promptis®. The
rapid-hardening, fast-formwork removal concrete technology is already being sold in France, UK, Ireland, Israel, Spain, and Croatia and will be made available in Austria, Poland, Latvia, UAE, and Hungary starting in the second half of 2011.  Click here for full release.
CEMEXSo far, the CEMEX "global" brand appears to be available only in parts of Europe and Southwest Asia. But the vision is impressive:
  • While cements are branded, I am not aware of previous attempts to create branded ready mix concrete. (Cement is just one ingredient in concrete.)
  • Further, there are still many strong local, independent ready mix producers serving an area with a radius of fifty miles from their batch plants. But the industry is in the midst of a massive roll-up.
This new initiative is another indication of the growing globalization of construction markets.

G'day, USA: Australia's James Hardie is making a splash in the U.S. market

This is an encore of an article Michael Chusid wrote almost 20 years ago. Since then, the construction industry has been increasingly globalized. However, most of their observations about the North American market remain the same.

Hardie saw a previous recession as a great time to invest in a new market -- a potential that also exists in our current economic malaise. The firm has sold off its gypsum board and irrigation interests, but has established a solid brand and market leadership in the fiberboard category.  

There is good news about the U.S. construction products industry: We enjoy a productive and flexible work force and an excellent safety record. Our designers are open to new products and techniques. We are adventurous, ambitious, and independent. And, despite the recession, our economic prospects are robust enough to merit substantial investment.

That is the decidedly upbeat view as seen from  Australia, home of James Hardie Industries Ltd., whose U.S. subsidiary is rapidly becoming a major  player in the North American construction products industry. In just five years, Hardie has become a significant supplier here of gypsum board and a range of fiber-cement products. The company has quickly earned a reputation for quality products and efficient production. Sales at its U.S. unit, which also markets irrigation products and sprinkler fittings grew 21% to $145 million (US) in the fiscal year ending in March.

Hardie's trek into the U. S, market has not been without a few bumps, however. Hurt by the construction downturn and severe price-cutting in the gypsum market, the U.S. unit lost $14.5 million last year. The company has had a tough time, especially at first, getting U.S. contractors to try its high-cost fiber-cement products. And it took a few missteps to make Hardie realize it had to Americanize its marketing operations to be successful here.

Things are just now beginning to shape up. Don Manson, president of the Mission Viejo, CA-headquartered unit, says both sales and profits improved "significantly" in the first half of this year, thanks mostly to growth in the fiber-cement business. "I'll be very surprised if we're not profitable in fiscal 1994," Manson says.

If so, the U.S. unit will be on its way to following in the rather large footsteps of its Sydney-based parent, one of Australia's leading industrial manufacturers and a dominant producer of cladding there. For most of James Hardie's 100-year history, the company's chief product had been asbestos-cement board, popular in Australia's hot, humid coastal cities. But when health concerns about asbestos surfaced, Hardie switched in 1980 to a wood-fiber cement board. It retains most of asbestos' desirable properties, but it is stronger and easier to work with.

Coming to America
About that same time, the company began to diversify through a series of acquisitions and product developments. It grew into a billion-dollar company, but its development was limited by the size of its home markets of Australia aid New Zealand, whose combined population of 20 million is less than California's.

"The question then was, do we expand into other activities or do we take our knowledge to other parts of the world? We chose to do the latter," says Manson, formerly head of Hardie's New Zealand unit. "We had extremely good products and technology, so it was a question of how to capitalize on it. We looked to the United States because we saw somewhat similar building practices, an extremely large population, and a relatively common language."

Another factor was the mid-1980s collapse of Johns Manville, a leading U.S. supplier of asbestos-cement products. "We saw a vacuum here for [non-asbestos] cement panels," says Pat Collins, technical services manager for Hardie's U.S. building products division. Also, the U.S. market was not entirely new to Hardie. The company had already made inroads by bringing in its irrigation and sprinkler products in the 1970s.

Hardie's expansion into the United States began in earnest in 1987. That year Hardie bought a gypsum quarry and a gypsum board plant in Las Vegas and another plant in Seattle. It also began exporting some fiber-cement products to the United States, though by 1990, it was making those products at its Fontana, CA plant.

At first, the company combined the gypsum and fiber-cement operations, but it later reorganized them into two divisions. "They are separate businesses," Manson explains. While gypsum board is a price-sensitive commodity product, the high cost fiber-cement products are more proprietary and require missionary work to sell. And while Hardie's gypsum boards are marketed on the West Coast and exported to countries such as Korea, the fiber cement products are sold in the Sun Belt.

The company makes three types of fiber-cement products: siding, backer hoard, and roofing shingles. They are sold mostly in niche residential markets where their unique properties can be marketed at a higher cost. The backer board has shown the most market growth and potential. It can command a small premium because it provides the smooth finish necessary with vinyl flooring, and its water impermeability makes it ideal behind ceramic tiles in wet areas.

The roofing shingle has had a relatively high penetration in California, but Hardie won't be able to expand the market North until it perfects the shingle's freeze/thaw properties. The siding, which has had slow growth, has faced tough competition from other cladding, mostly wood, because of cost and aesthetic reasons. Its main selling point is its long life, and that's not as much of a concern in the United States as in Australia.

Though the Fontana plant is now running at only half its 100,000 tons per-year capacity, Hardie sees  enough market potential to warrant buying land near Tampa, FL for a second fiber cement plant.

Hardie has met with some frustrations, though. It has had difficulty getting U.S. contractors to get past their low-cost mentality and try Hardie's fiber-cement products. "The acceptance has taken a little longer than we anticipated," Manson says. "Even though our product may be clearly superior, if the tradesman has been used to doing things a certain way for 20 to 30 years, he's not going to change quickly.

"It has taken until this year. But now it's really coming on." U.S. sales of Hardie's fiber-cement products grew 14% in fiscal 1992 and that division cut its losses 15%. "And that's being achieved against a depressed economy," Manson says.

Fitting in
Hardie's initial projections underestimated the U.S. demand for fiber cement shingles, mainly because shingles are not popular in Australia. Such predisposed outlooks are one of the hazards of transporting a business from one country to another. Despite their similarities, Australia and the United States have much different marketing environments.

"It's taken five years to come to terms with and fit into American culture," Collin says. "The slowness in getting to that stage was due to Australian attitudes and traditions trying to be imposed onto American culture. It doesn't work. We had to become an American company run by Americans."

And that is exactly what Hardie became. The building products division, for example, is now run by an American, vice president and general manager Louis Gries, and a management team recruited from U.S. firms. Collins is one of the few Australian expatriates still in the United States. Both he and Manson, a New Zealander, see their roles as transitional and temporary.

One adjustment Hardie made after a few years in the U.S. market was to decentralize its marketing organization by putting senior staff in regional offices, rather than have them manage from afar. "That's made a powerful difference," Manson says.

As Collins explains it, a decentralized structure is not a necessity in the smaller Australia. But in the United States, it's a must. "This country is so large that we can't talk about just one country from a marketing or manufacturing point of view," he says. "In each place it has to be carefully done to fit the local requirements and culture. It's 50 different countries really."

Another difference Manson has observed in the U.S. market is its cavalier attitude towards quality. Australians, by contrast, are a less mobile people and tend to use higher quality building materials to build homes for a lifetime. "It surprised me that the expectations of consumers are not great here," he says. "I see enormous homes with high prices, but the quality is not dramatic.

"Our backer board is an excellent product, but it gets covered by tile and is out of sight. It's hard for the builder to justify an additional cost. How do you [charge a premium] when it's coming out of the builder's profits?'

The answer, says Mike Going, Hardie's U.S. marketing manager until his recent return to the New Zealand unit, is aggressive marketing that will convince contractors and home buyers that quality is worth the extra cost. "Hardie must foster an aggressive and creative marketing vision while at the same time doing all the small things that have to be done to carry out a successful marketing program."

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By Michael Chusid, Originally published in Construction Marketing Today, ©1992

Mega-Sized A/E/C Firms

AECOM has redefined what it means to be a large A/E/C consulting firm. It is now a Fortune 500 company with clients in more than 100 countries and annual revenue of $6.3 billion.  URS Corporation, a global provider of engineering, construction and technical services, has revenue of almost $9 billion.

Can building product sales and marketing techniques that work in other parts of the construction industry scale-up to deal with such behemoths?

A new white paper from SMPS Foundation, offers insight:

Supersized Competition: What You Need to Know About the Creation of A/E/C Megafirms by Alexandra S. Brown, and Scott E. Mickle, CPSM, BD & Marketing Director, LandDesign

SMPS Foundation is affiliated with the Society for Marketing Professional Services, a group focusing on marketing of design and construction. So while the report focuses on on marketing professional services, you will be able to glean tips applicable to marketing bricks and sticks.

Other recent white papers from SMPS Foudation include:
A summary of these reports, and links to previous SMPS reports, is available.

If You Want to Sell Internationally, Look International

Here’s a tip for any US business seeking to sell on an international scale: revise your phone number.

At World of Concrete, I offered my client’s press kit to an Australian journalist.  He said, “Oh, I saw that on the table, but I didn’t bother because they’re not international.” 

I asked how he figured that out (since my client was adamant that he would sell anywhere in the world).  The journalist pointed to the telephone contact number at the bottom of every page of the press kit.  “They only have an 800-number.  Those don't work internationally.  If this company ever got or wanted international customers, they’d show the international calling code.”

An 800-number is great for your North American customers, prospects, etc., However, if it’s your only contact number, it’s a quick tip-off that you don’t have foreign customers and don't have experience doing business overseas.  An international caller to the US would expect the international calling prefix “1” to dial North America, sometimes referred to as a “plus code.” 

Thus, the international-friendly number for Chusid Associates would be shown as +1 818 774 0003. 

Go over your sales literature, press materials, website, letterhead, etc, and see if you’re projecting the international image you desire.

Are Toll-Free Phone Numbers Obsolete?

A toll-free phone number used to be vital for most building product businesses. Long distance charges were high, so the free call made it easier for out-of-town prospects to dial in. Having an 800 number was also perceived as a red carpet that made customers feel welcome.

But times have changed. Competition among long distance providers have caused prices to tumble. Many callers have unlimited service plans that do not charge extra for long distance. Voice Over Internet Protocols (VOIP), Skype, and other internet-based telephones are virtually free. An increasing number of sales inquiries come via e-mail rather than by phone. And toll-free numbers aren't useful in for calls from international clients - an increasingly important part of the construction business.

With this in mind, one of my clients just eliminated their toll-free number from their website.

What do you think? Is it still important for a building product company to publish a toll-free number?

I would love to hear from readers with thoughts about this.

International Technology Transfer

I recently had two encounters that remind me how difficult it is bringing a building product technology from one part of the world to another:
  • I had a discussion with a rep from a company that claims to be one of the leading European suppliers of accessories for planted, "green" roofs. The concept may be well established in Europe, but it is in its infancy in the US. The rep, taking clues from her European boss, had difficulty understanding that Americans want a roofing membrane manufacturer to warrant the planting accessories as part of a total roofing system. In Europe, apparently, the "waterproofing" and the "green roofing" are considered two completely separate trades, like we might consider the floor slab and carpeting to be almost completely separate. I tried to explain some of the differences, including a different legal system that assesses risk and liability differently.
  • Today, I went through the sales and technical literature of a Turkish company that has an innovative, thin ceramic sheet. While the bilingual documents were translated into "English", possibly into "American," they were still in a foreign dialect with regards to the language of American construction. I will forgive them the use of metric -- Americans should get their head out of the sand on that point. But the tools the related materials such as underlayments and sealants were unfamiliar, the types of assemblages, and even the drawing conventions used in their details were all "weird".
Fortunately, Chusid Associates has had experience with many other off-shore building product manufactures coming to North American. We have been able to assist them to understand US markets and plot their best course.

In some cases, once they understood the market conditions here, they have decided to not risk coming to the US. But when they have decided the investment was worthwhile, we have been able to act as their guide through the maze of acculturation, testing and regulatory hurdles, and start-up.

Federal Assistance for Building Product Export

Several of our clients are getting through the rough economy by expanding sales overseas, China and the Gulf States included. These programs can be helpful to novice exporters:

The Ex-Im Bank has three financing products geared especially to small and medium-sized businesses:
Working Capital Guarantees: covers 90 percent of the principal and interest on commercial lenders' working capital loans for pre-export costs.

Export Credit Insurance: protects mostly small-business exporters and their lenders against the commercial and political risks of a foreign buyer defaulting on payment.

Loan Guarantees: enables American firms to offer foreign buyers competitive credit to win a sale of equipment and services.
The Office of International Trade at the SBA has two programs to enhance the ability of small businesses to compete in the global marketplace:
Export Working Capital Loan Program (EWCP): provides short term, transaction based financing up to $2 million to assist experienced U.S. exporters to fulfill specific export contracts purchase orders, or letters of credit from overseas buyers.

Export Express: provides loans up to $250,000 to assist with working capital funds for international marketing & promotion activities and long-term financing to support an exporter's acquisition of fixed assets.
For more information, visit the Ex-Im Bank's web site at or the SBA's website at .

Anti-Microbial Treatments - Benefit or Risk?

At Chusid Associates, our first obligation is to stewardship of the environment. With that in mind, we are concerned about the possible hazard posed by "antimicrobial" treatments on building products. The following are excerpts from market research we conducted several years ago:

There is worldwide concern in the increasing use of antimicrobial-treated products. This trend is most apparent in consumer goods. In architecture, antimicrobial treatments are offered for door handles, toilet seats, HVAC equipment, countertops and some other products. Companies may feel the need to compete by adding these products to their lines but are these actually good products or could they be backfiring, resulting in severe health concerns?
U.S. pesticide regulations severely limit health-related claims that can be made about the use of an antimicrobial treatment. Under US regulations, a manufacturer can claim that an antimicrobial makes surfaces easier to clean and reduces the potential for odor. It cannot say, however, that it will reduce the spread of infections. Since many building materials are already easy to clean and do not promote odors, the benefits of an antimicrobial treatment are based on the public’s fear of “germs” and its faith in aggressive hygiene. As a point of reference, consider that millions of dollars are spent in the U.S. every year on chemicals to make toilet bowls clean enough to drink from, even though no one drinks from them.

European regulations appear to be more lenient. I am aware that of an international manufacturer that says, on its EU website, that their antimicrobial-treated products provide "antibacterial protection that helps fight the growth of micro-organisms such as mold and harmful bacteria such as E.Coli, Salmonella, Listeria, Staphlococcus and the MRSA superbug." However, they do not give data saying how effective the surfacing is against these microbes, and this type of language is absent from their US site.

There is growing concern that long term and widespread use of antimicrobials may breed antimicrobial-resistant microbes and pose an even greater danger. Some antimicrobials weaken organisms but allow resistant populations to survive and reproduce.

Market segments most likely to be interested in antimicrobial treatments include residential and healthcare. In the residential market, interest in an antimicrobial product is driven by a consumer’s generalized sense of concern for “giving their family the best protection there is”. Few consumers will be aware of concerns about the breeding of pesticide-resistant microbes.

In the specification-driven healthcare sector, the keys are regulatory approval, serviceability, demonstrated protection against contamination and the spread of disease, and cost.

It would be logical for the food service industry to be interested in antimicrobial treatments. We believe, however, that it will be years before that industry moves beyond the NSF requirement as its standard of care.

Ultimate acceptance of an antimicrobial product is dependent upon being able to demonstrate clear mission-specific benefits (lower infection rates or reduce housekeeping costs) due to the use of the treatment. Ultimately, a record of proven benefits to be derived from antimicrobials may lead to regulatory requirements or industry best practices requiring antimicrobial surfaces. The potential this type of research seems remote at present given 1) most health care construction is regulated by state agencies and could possibly require an expensive and time-consuming process of getting on the approved products list of these regulators as well as selling to facility managers and design professionals, and 2) current U.S. laws that demand costly proof and registration before claiming health-related benefits. More, the health care sector will be sensitive to concerns about breeding of pesticide-resistant microbes.

In many cases, a manufacturer's move to add an antimicrobial appears to be driven more by promotional considerations than by gains in product performance. As the first in category to introduce this product, a manufacturer would have an opportunity to get excellent press and salesmen have a new feature to discuss.

In our limited discussions with architects and other design professionals, there was limited awareness of antimicrobial treatments. Most respondents expressed interest but felt unable to make any reasonable assessments about the value of antimicrobial because of the lack of meaningful technical data presented. Healthcare architects were generally of the opinion that an antimicrobial treatment would not negate the need for stringent cleaning and sterilization, and thus were skeptical about the benefit of antimicrobials without data substantiating performance benefits.

We found no credible, independent source that recommended antimicrobial treatments as a prudent measure to improve health or housekeeping concerns.

For more on this topic, see

Is Architecture in Decline?

Self-styled as the "world's greatest living architectural sociologist," Dr. Garry's website offers some keen observations that should be of interest to any building product manufacturer that goes to market by trying to get architectural specification. The following essay on "Architecture in Decline" is an example:

We think that the occupation of architecture is facing a very difficult time in the English-speaking world. Why do we say 'English-speaking'? Because the architecture profession is so different in non-English-speaking countries, that there is simply no comparison; just as the village Nigerian traditional healer has no relation to a Hong Kong brain surgeon, though they may both call themselves 'doctor'. But to continue....

Changes in the occupation

The ANZAC/British/North American architecture profession is not in the best of shape. This is no mere economic hiccough: it is a fundamental structural change. There are two effects operating (oh us, this is the sociologist talking!). First, there is a replacement effect. Things that architects did thirty years ago, they no longer do. Like manage big contracts for construction. A whole bunch of new occupations have been created to do that, such as 'project managers'. True, some of these people have architecture degrees, but a lot do not.

Second, there is a substitution effect. Whenever something new has happened in the construction industry, the architects have decided 'it wasn't for them'. Here is one example: security. Thirty years ago, 'security' meant the locks that the architect said had to go on the doors. The architect was in complete charge of this, choosing appropriate items from catalogues. As you probably know, today 'security' means cameras, photo IDs, swipe cards, lift (elevator) control, and goodness knows what else. That is in the hands of specialist consultants. The specialist tells the architect what can be done, not the other way around.

The shrinkage in the architecture magazines

Here are a few indicators of the decline of the occupation. Let's take a look at the world's best weekly architectural journal, the Architects' Journal, known fondly as the AJ. This is a British journal that even the American architecture schools collect. Bristling with not only great technical stuff, but also industry gossip, plus some of the high-art fluff some like. A wonderful collection. When Dr Garry was a student, he worshipped the AJ.

We did a bit of investigating. Ten years ago (1989) it published about 6,000 (six thousand) pages each year. In 1999 (the last year we have) it only put out 3,200 (three thousand two hundred). That's a 45% drop. Holy dog-doo, Batman! Sure, a lot was advertising, but in a sense that is the point: when sellers decide you are too poor to sell to, you might as well pack your bags and migrate to Albania (no offence to all my Albanian readers, we am sure).

Second, let's take a look closer to Dr Garry's home, by seeing what Architecture Australia has been doing the past decade or so. This is the organ of the Royal Australian Institute of Architects (RAIA). Like the AJ, Architecture Australia has published less and less as time has gone on. In 1988 this journal published nine issues with a total of 1,220 pages. Ten years later, it only published six issues with a total of 558 pages. Again, a huge 54% fall.

We'll finish by noting some North American indicators. The Canadian Architect fell from printing 752 pages in 1989 to printing 597 in 1999, a more modest 20% decline, but a decline nonetheless.

The situation in the United States is a little more complicated. In the late 1980's the Big Three of architectural journalism were Progressive Architecture, Architectural Record, and Architecture. Of these, only PA had any guts. The rest were surrogates of the American Institute of Architects, and publishers who wanted to sell, sell, sell. After a series of genuinely thoughtful, critical pieces, PA folded. If we include the extinction of PA, then US architectural journalism has declined by about 30% in the past decade. You can read more about this phenomenon in this November 2006 article in, by their excellent architectural commentator Witold Rybczynski.

The decline in architectural employment

The case of California

We are in the process of examining architectural employment and incomes in the United States as a whole, but for the moment we have some interesting data from California, obtained from the Fall 2000 Newsletter of the California Architects Board.

In 1989, the figures show, 15,248 people sat for one or more portions of the Architects Registration Examination in California. In 1999, only 3,720 did. In 1989, some 1,339 initial licenses to practice were issued. Ten years later only 362 were.

The case of Australia

Now for some figures from Dr Garry's own Australia. In every country, employment in architecture depends very much on the business cycle. This has always been a leading indicator of economic health. Since architects are engaged months or years before construction takes place, measuring employment in architectural offices gives you a good way of predicting what is happening in the construction sector of the economy. Since construction is so large a part of any industrial economy, this also gives you an excellent leading indicator about what else is happening.

What has us spooked is that, since 1989, employment in Aussie architecture firms has fallen by 20%. Whoa! Full details can be found courtesy of research published on the Royal Australian Institute of Architect's website (nice to see the RAIA does at least one useful thing). If the number of architects had grown as the rest of Australia's workforce, we should have about 15% more architects, not 20% fewer.

Has anyone else noticed this?

Surely these are significant developments in the status of the architecture profession. If the data is as we interpret it, then the architects' associations should be showing some concern. We've sent a few emails asking various august bodies about their opinions on this matter, but almost no responses. Either no one else has noticed; or no one else cares.

Copyright © 2001–2010 Garry Stevens. All rights reserved. Original research on this site is commercial-in-confidence and copyright © 2001–2010 Garry Stevens. It is not public domain. Notwithstanding all this legal palaver, you may freely quote any research on this site or other material to your heart's delight; provided proper attribution to Dr Garry and this site is given. This domain name is proudly registered in the USA, and the website is maintained on servers in the USA.

China's Building Products Market

Many building product manufacturers are mesmerized by China. The land of cheap manufacturing. The largest construction market. Boundless potential.

Of course, it is also a land of boundless risks. But the more you know about China, the better you can assess the opportunities and risks. Recently published, The China Greentech Report 2009 report offers insight into the nascent but growing market for environmental products in China.

One of the industry sectors covered by the report is the nascent but growing market for green buildings. The complete report can be downloaded at