Building materials maker Simpson Manufacturing Co. is investing in additional capacity in its components manufacturing business after seeing double-digit year-over-year volume growth in its North American segment, CEO Mike Olosky said in an April 22 Q1 earnings call.
The manufacturer is increasing capacity through new product development, software improvements, equipment solutions and improved manufacturing processes, Olosky told analysts.
Simpson is also expanding its facilities to further boost capacity and improve operational efficiencies, the CEO said.
In October, subsidiary Simpson Strong-Tie announced plans for a $105 million plant expansion in Columbus, Ohio, as well as to build a new fastener facility in Gallatin, Tennessee.
North America sales volumes were up 8% year over year overall in Q1, thanks to new customers in the national retail and OEM markets, including manufacturers for modular buildings, metal buildings, sheds, off-site construction and material handling.
“The OEM market is one of the areas we're providing additional focus on to accelerate growth,” Olosky said in the call.
As for its national retail sector, which sells to large home centers including Lowe’s and The Home Depot, Simpson is seeing a bump in revenue after a plateau in fiscal year 2023.
Since last year, the company has been expanding its offerings at home centers and improving merchandising efforts to help drive brand recognition and promote product sales. Simpson has since seen a “good sell-through” of its products, including its fasteners.
“Fourth quarter, we were down in the low-single digits volume, revenue was down mid-single digits for the fourth quarter. The businesses significantly picked up from there,” Olosky said.
Meanwhile, the manufacturing company also aims to accelerate its growth initiatives through M&A opportunities while hoping for an expected housing market recovery in 2025, according to the CEO.
“Concurrent with this strategy, we are making significant investments in people, engineering, equipment and other capabilities to drive organic growth in the business,” he added.
In April 2022, Simpson completed its acquisition of Etanco, a Europe-based manufacturer of fixing and fastening solutions.
