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Builders are much busier, but lagging behind boom Kopf Builders owner says he’s ‘cautiously optimistic’ about improving market in NE Ohio By STAN BULLARD sbullard@crain.com
It sells 70% of its sand to the oil and gas industry, up from just 20% in 1999. So far at least, falling oil prices are only affecting the company’s stock price but not its sales. Fairmount CEO Jenniffer Deckard said the company remains on track to meet expectations and to increase earnings to a new record in the fourth quarter. “Nothing about the fundamentals has changed,” Deckard said in a Nov. 28 interview. “We have no reduction in volume. We have no reduction in pricing. We’re setting records every month. This
Northeast Ohio’s home builders continue to slog out of the shadow of the housing bust, and they remain cautious as they survey slowly improving conditions for constructing single-family homes and condominiums. H.R. “Bucky” Kopf, the owner of Avon Lake-based Kopf Builders, said, “There is no celebration” even as builders continue to notch improving numbers of home sales. “All of a sudden, people are saying to me that ‘Things are booming.’ But the industry is at just 60% of what it was when it was in a good market,” Kopf said. “There are fewer builders around. We are cautiously optimistic, but we work harder than ever.” Mike Payne, vice president of operations at Chardonbased Payne & Payne Builders, said home producers are benefiting from restored consumer confidence, but the expectation is not for a lot of growth or improvement in the immediate future. “Steady is OK by us,” said Payne, who on Friday, Dec. 12, will become the 2015 president of the Home Builders Association of Greater Cleveland trade group. But make no mistake — builders are relishing renewed activity. “Everyone is more upbeat about the market and their business,” Payne said, “Virtually everyone is pretty busy. Everyone has a lot more work” than a few years ago. He said regional housing production numbers are a “good news and bad news situation.” They are up, though the market is far below the boom years that ended in 2004 — and still below normal production levels. Although the last brutal winter slowed sales and
See FAIRMOUNT, page 8
See BUILDERS, page 17
CONTRIBUTED PHOTO
Fairmount Santrol is enjoying the profits from its sand mines, such as this one in Maiden Rock, Wis.
Oil leads to stock slide Fairmount Santrol, however, is seeing its profits soar — thanks to sand By DAN SHINGLER dshingler@crain.com
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Fairmount Santrol’s sales and profits keep increasing, while its stock price keeps plummeting. What gives? The price of oil. The price of West Texas crude — the benchmark of the U.S. oil market — has fallen from more than $100 a barrel in July, to around $70 a barrel recently. Along the way, investors have bailed not only on the stocks of U.S. oil companies, but on the stocks of companies in their
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supply chain, including Chesterlandbased Fairmount. Shortly before it went public, Fairmount had valued its proposed public stock at around $22.50 per share, but by the time the offering came out on Oct. 3 investor sentiment had already turned and the new stock fetched just $16 per share. Since then, it has continued to fall, and last week it was trading at less than $9 per share. Fairmount’s stock is caught in a falling tide and, since shale drilling has become such a big business for it, Fairmount’s share price is affected by the price of oil.
SMALL BUSINESS Cleveland Clinic program endorses and hypes the benefits of healthy products ■ Pages 13-15 PLUS: ■ MARKETING PLATFORMS ■ TAX TIPS ■ & MORE
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