There are several limitations in
assessing the window and door fabrication market – differences in
product definition, residential and commercial sector variations, market
volatility, level of vertical integration in fabrication and
installation, glazed / unglazed supply etc.
However, given
these limitations, we estimate that, at trade prices, the windows and
doors fabrication market was worth around £2.65 billion in 2005. This
represents a substantial reduction in comparison with our estimate for
2004 and reflects the challenging market conditions that fabricators are
facing, particularly in the domestic home improvement sector.
The non-domestic market has been
relatively buoyant in the 2000’s, underpinned by high levels of
construction output in the commercial office, education and health
sectors. However, the domestic replacement and housebuilding sectors
were less positive during the early years of 2000, with the domestic
window replacement market reaching saturation.
In 2005, the residential windows
and doors replacement market has seen notable declines and it is widely
accepted that the market is now mature. Prices and margins continue to
be under pressure throughout the distribution chain, particularly for
PVC-U, underpinned by intense levels of competition and over-capacity,
especially within the direct sell market.
The mature replacement sector is expected to
continue to decline in 2006-2009. The decline may be mitigated to some
degree in the public sector by work undertaken as part of the Decent
Homes initiative but the private home improvement market is likely
to continue to decline certainly in the short-medium term, though it is
difficult to assess where the market will settle.
Conservatories continue to offer
relatively good prospects in the domestic sector as market penetration
levels are low and the product remains high on homeowners preferences
for home improvements. However, much
depends in this sector on general economic developments and in the
difficult market of 2005, this sector has suffered along with windows.
The newbuild market, though
relatively small by comparison with the replacement market, and despite
a slow and relatively flat market in
2001-03, has become more
buoyant in recent years. Early signs
for 2006 show positive growth and this market will continue to be
supported, at least in the short term, by government initiatives such as
those for affordable homes and keyworker homes. However, volume growth
in housing completions will be offset to some extent by the rapid switch
to flats, which is resulting in a lower average number of windows per
new dwelling.
The commercial sector is expected to continue to
be relatively buoyant with both new build and refurbishment projects
anticipated in the office and leisure sectors. In the public
non-housing sector, the long-term commitment by the Government to
publicly funded and PFI schemes suggests that demand for windows and
other glazing products will continue to grow, particularly in the
education and health sectors.
The supply sector remains very
fragmented as it comprises vertically integrated retail glazing
companies, PVC-U trade fabricators and fabricator/installers, aluminium
systems fabricator/installers, bespoke glazing contractors, composite
door manufacturers, commercial glazed door manufacturers, roof light
manufacturers, steel window manufacturers and major joinery companies.
The structure of the industry has always been
volatile with a high turnover of retail companies. As margins have
become more depressed in the saturated market and the pressure on
companies to survive a downturn in sales alongside rapidly rising costs
becomes more acute, it is expected that there will be further
significant rationalization in the supply chain.
The retail glazing sector is
itself very fragmented, the leading 6 suppliers only having a combined
market share of around 25%, led by Anglian.
Other national retail companies include the
following: Bowater Zenith, Everest,
Staybrite
(also owned by Bowater), Weatherseal,
Safestyle
etc.
PVC-U trade fabrication is also
highly fragmented, with leading players such as Shepley,
Speedframe, Griffin Windows, Sash UK and CWG
typically having shares of 1-3% of the domestic doors and windows
market. The growing number of 'super-fabricators' is leading to gradual
consolidation, as is the fact that a number of smaller fabricators are
withdrawing from manufacture to focus on installation.
The aluminium fabrication industry
is largely focused on the non-domestic market, as the use of aluminium
in the domestic sector has lost share to PVC-U alternatives. In recent
years, this sector has been marked by a large loss of capacity with a
number of once major players no longer in operation. There are no
dominant companies in this sector, but key players include: Solaglas,
AC Yule, Parry Bowen, Dane Architectural Systems and Charles
Henshaw.
The other key supplier sector is
the joinery industry, largely selling timber windows and doors to the
builders merchants and DIY markets, although the leading players have
diversified into PVC-U and composite materials as demand for timber
products has declined. Key suppliers are Magnet,
Jeld-Wen UK,
Premdor, Howarth, etc.
In terms of materials, PVC-U is
considered to have reached its peak in many markets, particularly the
domestic market. Aluminium has a particularly strong share of the
commercial market, however, where its strength makes it suitable for
structural glazing projects. It has also gained some share in the
domestic sector as a result of it popularity among specifiers for
riverside/luxury flat developments. Timber, whilst losing share in the
past, has retained a share of the market, helped by Social Housing
sector specification of timber for doors and windows, environmental
factors, advances in timber treatments and the traditional appeal of
wood.
Composite materials are gaining share in the
entrance door sector, particularly rapidly in the public and new housing
sectors, but while there are new composite materials in the window
market, they have not achieved any significant share gains to date.
There has been some restructuring in the sector. In particular,
two groups with notable
interests in the door and window market,
Laird Group PLC and
Epwin,
are represented in
the composite door market by more than one company. In addition, US
door manufacturer,
Therma-tru, already
an importer into the UK, has acquired UK company
Sentinel.