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UFP Industries, Inc.’s UFPI brand, Deckorators, has announced its market presence expansion in New York by acquiring a 30-acre site in Lackawanna, a suburb of Buffalo.
The total investment in this strategic move sums up to $77 million, a part of UFP Industries’ $250 million capital expenditure plan over the next five years, targeted to grow and expand the Deckorators product line.
UFPI stock inched up 0.7% during Monday’s trading hours, after the announcement of the market expansion initiative.
What Does UFPI’s Deckorators Strategic Move Offer?
With the acquisition of the new site, Deckorators aims to increase the production capacity for its industry-leading Surestone composite-decking product. The 30-acre site is expected to be transformed into a top-tier facility with approximately 240,000 square feet of manufacturing and warehousing space.
The construction of the facility is expected to begin in April 2025 and be fully operational by the end of 2025. The facility will create around 60 jobs, including production support, logistics and administrative roles.
Notably, in the latter half of 2025, the Deckorators brand will be introducing new products at DeckExpo.
UFP Industries’ Deckorators Brand Bodes Well
UFPI has been actively investing in its highly valued Deckorators brand, prioritizing product innovation and production capacity expansion as well as fostering awareness in the market. The launch of the new Summit Decking board, designed and engineered utilizing its Surestone technology, under the Deckorators brand, is an example of product innovation.
To foster production capacity and market awareness, UFP Industries aims to invest in a marketing campaign designed to help drive Deckorators’ brand awareness and the value behind this proprietary technology.
During the fourth quarter of 2024, within the Deckorators brand, the decking sales increased 20% year over year, driven mainly by the Surestone decking product, which increased 43%. Surestone is expected to benefit from the company’s efforts, including expanding distribution, adding new capacity and increasing marketing efforts.
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Shares of this holding company have lost 5% in the year-to-date period compared with the Zacks Building Products - Wood industry’s 0.7% decline. Although housing market uncertainties and the lingering inflationary environment are posing concerns to prospects, accretive buyout strategies and prioritizing product innovation and diversification are expected to bode well in the upcoming period.