Asphalt Felts and Coatings

SIC 2952

Companies in this industry

Industry report:

This category comprises establishments that manufacture asphalt in roll or shingle form that are either smooth or faced with grit and roof cements or coatings. Examples of products include asphalt brick siding, tar coating compounds, roofing fabrics, pitch, shingles, and tarpaper. Manufacturers of asphalt paving mixtures and blocks are described in SIC 2951: Asphalt Paving Mixtures.

Asphalt is a compound made of hydrogen and carbon, with minor proportions of nitrogen, sulfur, and oxygen. It exists in forms ranging from a black liquid to a glassy solid. Most asphalt is obtained as a byproduct of the distillation of petroleum or other natural materials. Some natural asphalt, however, is extracted from organic mineral deposits in the early stages of their breakdown into petroleum.

When formed into felts and coatings, asphalt provides a reliable protectant and sealant. It is extremely water-repellent, tolerates temperature fluctuations, and resists the breakdown and decay caused by exposure to the elements. These characteristics make asphalt ideal for roofs, coatings, floor tilings, and waterproofing. Asphalt coatings and sheets are also popular soundproofing materials.

Total industry shipments were valued at over $8 billion at the end of the first decade of the 2000s. Roofing asphalts and pitches, coatings, and cements represented 14 percent of total industry shipments, and all prepared asphalt and tar roofing and siding products, including saturated felts and boards for nonbuilding use combined, made up 83 percent. Asphalt shingles and coating materials, not elsewhere classified, accounted for slightly more than 2 percent of shipments. In the middle of the first decade of the 2000s, asphalt shingles accounted for more than half of the residential roofing market.

Although asphalt was used to line reservoirs as early as 3000 B.C., it was not used as a widespread commercial application until the twentieth century. Aided by technological advancements in petroleum-based materials during World War II, the U.S. asphalt felt and coating industry mushroomed during the post-war economic expansion. Residential and commercial construction booms propelled the industry to nearly $3 billion in sales by the late 1970s.

Industry growth stalled during the 1980s as a reduction in the number of housing starts and competition from new synthetic materials cut into producer's profits. Sales rose from $3.3 billion to $3.6 billion between 1983 and 1990, lagging behind the rate of inflation. By 1996, sales were at $3.8 billion. A year later, however, the value of total shipments rose more sharply, to around $4.9 billion. Fueled by a booming U.S. economy, shipments continued to climb in the late 1990s, reaching $5.17 billion in 2000. After dipping to $4.97 billion in 2001, shipments climbed in the early years of the 2000s as housing starts reached their highest point in 25 years, thanks to historically low interest rates. Shipments increased to $5.68 billion in 2002 and to $8.3 billion in 2005.

As profitability declined during the 1980s and early 1990s, the already consolidated industry became even more concentrated. The number of industry participants decreased from 273 in 1982 to 245 in 1992 and dropped again in 1997 to just 149 total establishments. The combined revenues of the top 10 companies in 1996 comprised over half of total industry sales. Consolidation continued into the early years of the 2000s. In 2001, some 10 commercial roofing contractors merged operations to form TECTA America Corp. In 2005, the corporation comprised more than 15 companies with more than 1,800 employees and sales of $220 million.

Industry employment declined from 12,628 in 2000 to 11,684 in 2005 as manufacturers began to automate production rather than increasing their workforce to boost productivity. Production workers in 2004 totaled 9,009 who earned $427 million, with total payroll expenditures that year topping $618 million.

According to industry statistics, 610 manufacturers of asphalt in smooth or grit-faced roll or shingle form and roof cements or coatings reported a value of $4.3 billion and combined total employment of 21,925 workers in 2008. The industry leaders consolidated in the middle of the first decade of the 2000s, with one deal reportedly worth $1.12 billion.

Roofing materials manufacturers were the industry leaders with shipments of $4 billion. Roofing felts, cements, and coatings, not elsewhere classified, accounted for $135.7 million in shipped products. Asphalt, fibrous, or plastic roof cement contributed $30.5 million within the industry total, while coating compounds (tar) added $20.8 million.

Dun & Bradstreet listed 524 manufacturers of asphalt in roll or shingle form, either smooth or faced with grit, and roof cements or coatings in 2010, a decline from 610 in 2008. The industry was valued at $3.8 billion with industry-wide employment of 20,262 workers in 2010. Asphalt felts and coatings constituted 33.6 percent in market share and $81.3 million in product shipments for 2010. Texas, California, Florida, Ohio, and Illinois were home to the majority of manufacturers responsible for nearly 39 percent in industry share.

Also in 2010, roofing materials manufacturers remained the industry leaders based on shipments totaling nearly $3.5 billion, or 37.4 percent in industry share. A distant second was producers of roofing felts, cements, or coatings, not elsewhere classified valued at $207.4 million. Asphalt, fibrous or plastic roof cement accounted for $27.6 million and coating compounds (tar) generated another $22.3 million.

While asphalt roll roofing has been on the decline, elastomeric roofing was making headway. Other trends included "cold applied systems" being used instead of "multi-ply bituminous roofing systems," as well as "cold adhesives" that were being applied to high-rise buildings, such as hospital and hotel structures to eliminate.

Following two years of home and business owners delaying and cancelling construction projects, Kate Baumann, Director of Marketing, Customer Service, & Procurement for Mule-Hide Products Co. Inc., projected that "maintenance and repair work will pick up substantially in 2011," in the February 9, 2011, issue of Roofing Contractor. Sheree Bargabos, president of Owens Corning Roofing & Asphalt agreed, indicating that many homeowners were opting to invest in projects to update their homes instead of moving to a new one.

Many large corporations, such as Toledo, Ohio-based Owens Corning, participated in this industry without focusing on it exclusively. Of those companies that focused primarily on asphalt felts and coatings, however, one of the industry leaders was Carmel, Indiana-based Firestone Diversified Products, which was formed when Bridgestone Corp. acquired Firestone Building Products Co. Another leader was Vertellus Specialties Inc. of Indianapolis, Indiana, which posted $103.4 million in 2008 before dropping to $62.5 million in 2010, when it reported 512 employees. Vertellus Specialties was formed in July 2006 through the merger of Reilly Industries and Rutherford Chemicals. Carlisle, Pennsylvania-based Carlisle SynTec Inc., a unit of Carlisle Companies Inc., was another leader in the industry, posting 2008 sales of $2.9 billion before falling to $2.5 billion in 2011, when it reported 11,100 employees. Other industry leaders included GS Roofing Products Co. of Irving, Texas, with estimated sales of $300 million; GAF-ELK, formerly Dallas, Texas-based Elcor Corp., with fiscal 2005 sales of $762 million; and privately owned Tamko Roofing Products Inc. of Joplin, Missouri.

BFS Diversified Products was an industry leader in technological innovation by equipping its Contractor Services group with wearable personal computers manufactured by Xybernaut Corp., allowing on-site inspectors of roofing installations to electronically interface digital information with corporate offices. Some innovations, such as the photovoltaic modules that used combination roofing and solar energy-collecting units, worked against the industry. Another challenge to the industry was recycling as reroofing generated an estimated 6.8 million tons of waste yearly. Although recycling technologies existed, they were not fully utilized due to their complexity and cost, so research was ongoing at the beginning of the 2010s.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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