The Gl@zine Blogsite

Sustainability & Materials part 2

Hi everyone, just a quick note from the moderator here: the trouble with long posts such as these is that the 'Comments' link is a long way down (ie at the bottom) - but there again, the idea is that you read it all before you comment anyway! If you want to jump straight in to comment, this will take you straight to the comments page, but you still have to scroll down to the bottom for the comment box (but newest comments get displayed on top!):

[Comment here]

MIKE RIGBY, MRA: I think Alan talked about perceptions and the need to convince. Martin's point was absolutely right, that if the Victorians did have PVC then PVC would be what we have because the material almost speaks for itself. Almost. It doesn't actually speak for itself, and I think the problem that the industry faces - again, linking back to the very low profitability - is that we end up with the question: what will we be using in the future? I think there isn't one material which does everything; it will be a mix but the mix may be different.

I think the industry is doing sterling work in correcting the in-built bias that is coming out in BREEAM, but when you look at all the materials, the timber industry I suppose had a pasting for a longer time, but having lost a lot of share the industry got its act together. They put a lot of effort into changing perceptions.

I think when we get equality so that the facts are right and PVC isn't penalised when it comes down to it, perceptions count for an enormous amount. Martin just referred to GRP being listed at 35 years, I think he said, and people are stating as a fact that GRP is much more sustainable, in fact very much everything all down the tick list, than PVC. I thought, "Blimey, I don't know where to start really. I'm not technical". I think it's a measure of the perception that the industry has been complacent, perhaps. The swing towards PVC seemed inevitable and it kept on going. But nothing's inevitable and fact doesn't carry the day always. Conviction carries the day, and perception, and I don't see much effort from the industry. I think at the top people are doing some good work at the BPF and so on, but further down the tree I don't see any effort being made to sell the material.

So, back to what we will be using in the future, unless somebody actually gets together and puts a case so that all of those untrained guys at the coalface - Kevin's and Alan's customers there - are actually making the case strongly and clearly with confidence, I think there will be a steady drift from PVC-U. I don't see anybody doing anything.

KEVIN HILL, JOHN FREDERICKS: Martin's point was intriguing that if these new values move up to the numbers that you quoted, we won't be able to sell anything or make anything to comply with those standards. So, on that basis there, what is it (the window) going to be? What is it going to look like? Is it going to be a kind of plastic composite or a wood aluminium or an --

SAM KENNEDY, SPECTUS: It's not the frame, it'll be the glass.

MARTIN ALTHORPE, BPF: No, the 0.9 and the 0.7 is a discussion document. I don't think it's going to go down that far. But the thing that people always hold up is the German Passive House system where Passive House is a whole house ethos for low energy usage. Some people call it the three-litre house; it uses three litres of fuel per square metre per year. So, it's a very, very low energy consuming designed house.

That particular design was brought about in conjunction with the German government, and BASF, I think. The windows that they use are a very particular design: very high insulation frames; triple glazing; it buries the edge inside the frame to probably a depth of about 50 mm so you don't get the edge effect; triple seals, all the rest of it. They typically achieve a u-value of about 0.85, so a considerably different design of product.

The only way I know to get down to below 0.7 is to use the Scandinavian method of having two windows: one on the outside of the building that opens outwards and one on the inside that opens inwards. So it's actually two double-glazed windows. Now, I don't think the government's suggesting in any way that it's that extreme, but as you say, the idea's there and it's not going to go away.

[Comment on this?]

DAVID RUZICKA, SASH UK: Martin, who actually wants it at the coalface, though?

MARTIN ALTHORPE: Nobody. You go to a household and --

KEVIN HILL: But that almost misses the point, doesn't it? If you have a look at the insulation lobby where in the mid-1980s I think you got away with 50 mm of insulating in your loft, which was like cobwebs, not much effect at all, the manufacturers, distributors and the trade boys were very good at convincing government and working with government that, "Yes, you need to have more thermal efficient homes" and, "Yes, there are ways of doing it with double-glazing or draft excluders" or whatever it was. Now you can't get away with more than 200 mm. That's great news if you're making insulation; fantastic news if you need two windows for every opening, ideal. Embrace it, twice the frames. Everybody's happy.

DAVID RUZICKA: But that's what happens when you've got legislation that says you've got to have that.

KEVIN HILL: Exactly, and government legislation is a fantastic pump-primer for the businesses that are on the ball for it.

MARTIN ALTHORPE: The problem with legislation at the moment is it only addresses the people that have a mind to do something anyway, so it only addresses the people that are actually going to put new windows in, for instance. It doesn't address the people that aren't going to put any windows in and don't care about how many times they want to paint the windows because they don't do it anyway.

Now, there's actually millions and millions of properties still out there. I know we talk about replace the replacement and the market's sort of peaked. There's actually millions and millions of properties out there that haven't had anything done to them and won't have anything done to them because it's not seen as any sort of issue. The only way that that's going to change is if the government introduces some kind of legislation that encourages people to actually carry out energy improving renovation to their houses.

Now, it's a very contentious thing to say but I think the government - if they've got any sense - will use the HIPs system for doing energy ratings to houses. They'll use the council tax. They'll use a combination of the energy rating on your house and your council tax banding to say, "Well, if you've got a poor energy rated house, actually you pay a bit more council tax". I don't know but it would make sense to me, something like that.

[Comment on this?]

ALEX MAIN, PROMAC: It was buried in the pre-budget report that there was £4 billion set aside for improvements in the existing housing sector as well, so whether that would contribute towards bringing that up a bit more. It's a point that David made earlier - just going back a couple of steps - again, it's a different perspective from myself and Phil, on the machinery side, but we look at it with the same concern because our markets are shrinking as well and the profitability.

We feel that over the next 12 to 18 months there's going to be a big shake-down anyway; the cake's going to get slightly smaller but there'll be a hell of a lot less fabricators out there. Most of the guys round the table who do fabricate are at a professional level in terms of the people at the top end of the company and also the level of machinery that they use. If we could take the profitability out of it, there is an increase in the improvement across the business which would lead to more money being generated. If the rubbish is going to filter out, surely that gives the businesses more ability to generate the profit to contribute towards sustainability as well because if it doesn't, it's going to be difficult.

SAM KENNEDY: We've been talking very much about frames, PVC, aluminium, etc, but, Ron, on glass itself, the glass industry's gone through quite a dramatic time as well, hasn't it?

RON HAMILTON, PILKINGTON & GGF: Yes, it's interesting the whole issue of sustainability because certainly it's a major issue within our own organisation and within the GGF. It goes through from sustainability of organisations to survive, the personnel and certainly the cost of waste, which was factored in before.

The glass is re-used within sustainable buildings. Obviously triple-glazing isn't bad news for everybody, I've got to say, but we're actually driven by markets and some of the happy coincidences that we've made in developing products to satisfy consumer demands moves into completely new products for the industry: photo-voltaics, water heating systems which use glass.

Actually, I'd agree with you, Sam, when you said we're actually embarking upon a very, very exciting time for the industry if we decide to embrace the changes and actually be at the forefront of the changes in legislation, which I would agree with you needs to be in. We saw that with double-glazing units, didn't we? Until Part L came in nobody really changed and Part L brought value into our industry, without doubt.

So, influencing legislation, how we do this now and get the right level of legislation so that the industry is sustainable and can grow and develop with the legislation is quite interesting. In terms of glass products, I feel confident that the industry can actually supply the products that are required, ranging from coated products to different base glass compositions.

[Comment on this?]

SAM KENNEDY: Going back to your earlier comment as well, David, right at the very beginning of the industry about salesmen and installers coming in and starting companies, etc, we all know that over the years the product they're producing now as an industry - whether it be glass, hardware, machinery or even the frame itself - it is much more sophisticated now, isn't it, as a product?

DAVID RUZICKA: Yes.

SAM KENNEDY: But you're not getting the return on it. One of the questions I was just going to ask to finish off this section is you've got Brent crude hitting $84 a barrel yesterday, you've got all the problems with regard to energy costs, etc. Can we get a reasonable return on our investment in this industry now?

DAVID RUZICKA: We can get a reasonable return on it, yes, but unfortunately we have to have a major cull first before we start to get any profit at all, and that starts right at the top. It's a conversation I had with you yesterday evening, that some of the system companies have got to look at each other and seriously start to talk to each other. You look at some of the big electronic companies out there like Panasonic who have their own Panasonic brand but manufacture for other people, if you look at the capacity in the UK of the extrusion companies probably realistically they're only running at maybe half capacity, all of them if they tell the truth.

Now, to me, unless it starts right at the top, we're never going to be able to filter down that profitability back to fabricators, back to installers; we're never going to be able to do it. So, it's really got to start right from the top. For me, we're lucky, I suppose, because we have two extrusion companies that we deal with, extremely good companies, but you know what, none of them have got money for investment. That's a worry and concern for me when I'm looking at putting another £2 or £3 million investment in and my key suppliers are not profitable themselves. So, it really does start from right at the top and until we do that we're not going to be able deliver a price.

I looked at a window the other day - I was going to bring the details here - and it was a fabricator that's been in business probably about 20 years. He'd produced a quotation for a trade guy to go and fit these for a consumer. There were five windows and a French door or two, residential doors. He was selling that - bearing in mind that this is one of the most technically advanced secure products that you can buy today - at £729 plus VAT. The guy said to me, "If you can beat that price, you can have the deal" and I said, "I don't want the deal, there's nothing to do a deal on". So, when I got back I took my costs; took all labour out of it and I just looked at material costs. There was £96 between my material costs and what he sold it for. That's the industry. We can all talk about sustainability, u-values and what have you: it's a load of bollocks because I'm telling you out on that coalface, for me, unfortunately, that's our industry. £96 and he's got to manufacture that, make profit out of it and invest? That's the sad thing about it.

MICHAEL NAGLE, PROFITMAKER: Yes, but it's ease of entry and low intelligence; that's what you're up against.

DAVID RUZICKA: You know what, this guy has been in business probably 15 to 20 years and I would have probably said it was a reasonably well-structured company, but unfortunately even the well-structured companies are getting forced now to cut and do things that they wouldn't necessarily do. We've had a terrible year last year for the first time in 20-odd years, and some of it is possibly down to us but a lot of it is down to the fact that the industry is cutting each other's throats because there's too many people there. As I say, it starts off right at the top.

ALAN BURGESS, MASTERFRAME: I have to take the opposite view; I think it starts at the other end. I think it starts on the street. Frankly, people, we are reaping the reward of high-pressure sales that we've had for the last 35 years. If you have been pressurising people to buy a product and you've also educated them to say, "By the way, do make sure you get three quotes", all the television programmes, Watchdog, etc, "Make sure you get three quotes", all you're doing is educating someone to say, "If you can do the deal cheaper than the next guy, you can have it". They have been educated that way for so many years; now it's just about price. If you cannot differentiate your product from somebody else's product, if the only thing that's going to differentiate it is the price, that's a really simple equation to do. That one's cheaper than that one and because it's the same I'll have that. That is fundamental.

Okay, my part of the industry may be different but I've got the big nationals probably putting in sash windows for £600 a time. I have a network of installers and some of the best ones are getting £1,600, £1,700, £1,800 a window. It's the same customer but they understand what the buying needs are and they are convincing somebody that it's not about price, it's about the value of your property.

For years we've been saying to people, "Has your house gone up in value last year?" "Well, yes, it's gone up 10%" or whatever. "Well, are you relating the price of your window replacement to the value of your property because it's an investment?" "It is a cost because I've got to do it because the damn windows are falling out because they're rotten and I haven't painted them for 10 years", that's a knee-jerk purchase.

DAVID RUZICKA: But nobody sees the value in a PVC window any more. Twenty years ago you were sold the idea of what PVC would bring to you thermally, no maintenance, secure. Today, I don't think anybody sells that product any more. We don't sell it. You walk into a brand new house today and the consumer will look at bathrooms, kitchens, the flooring, timber floors that they have now because most of them don't bother putting carpets down any more. Who looks at the windows? Nobody. Because it's got no value to it; as an industry it's got no value.

MARTIN ALTHORPE: You're absolutely right.

ALEX MAIN: It is the perceived value of the customer that is the biggest single issue as far as I'm concerned.

MARTIN ALTHORPE: I went to look at a house a few months ago and the salesperson that was showing me around spent more time telling me about the alarm system than they did about the windows. I said, "Yes, PVC double-glazing" and they said, "This is the bathroom". I said, "Are they internally beaded?" and they said, "Well, it's PVC and it's double-glazed" and that was it. That was it. But what I was saying earlier about it coming down from the top in these purchasing organisations, new build buys down to a price, not up to a standard.

SAM KENNEDY: Correct.

MARTIN ALTHORPE: We know they build down to a price, not up to a standard as well. We shouldn't be surprised.

MIKE RIGBY: I think it's both at the front end and at the top end, but we've all agreed that it's not being sold; it's not being communicated; the case isn't being made for it; the benefits aren't being pushed at the front line. Martin's experience in going round a new build house pretty well mirrors the discussion going on in the industry.

Where are the discussions going on in the trade press about the benefits of PVC-U? It's taken for granted that we all speak the same language, we all accept that's the case and the guys who are at the front line, if they read the trade press, that's what they'll pick up as well. So, the whole thing creeps down.

When I got into the industry, page 1 of any salesman's brochure started off making the case for what you were selling, but if you look at what people are actually taking out on a pitch now there's hardly any of that. It's just disappeared because that's how windows come. If you want a window, for the most part, PVC-U is what you get offered.

I think that that's what happened to timber 30 years ago. You want a window, it's timber. It's crap, so what? That's what it is. Well, these aren't crap; these are highly engineered but nobody's making that case.

I talked to a guy who was quite a big direct seller who kept his records very, very tightly and wanted to educate me and he just showed me his records since he began. He got in in secondary glazing and he said, "If you adjust this for inflation, I'm selling at exactly the same price now that I sold secondary glazing. Then I got into aluminium and then I got into thermal break aluminium, then I got into PVC and then I added shoot bolts and K glass", all the way through. He had this all beautifully done and he was making no more money than when he was in a garage with some crimpers to pull his secondary glazing together.

Maybe this is getting into the next question - but if you don't make the case at the front end, that's where your profit goes and gradually it pulls it down. As Giles started off by saying, this multi-billion pound industry, there's no profit being made.

[Comment on this?]

GORONWY JONES, WINDOWMAKER: I think one way one sees that the case is not being made is when we're supplying software to all our customers in Germany, France and so on, the first question they ask is, "What do your quotations look like?" In the UK, hardly anybody uses quotations, they use order forms, and on those quotations the Germans and French have about 20 lines of text describing what the customer is getting and it has got the u-values and decibel values and so on, on it.

MIKE RIGBY: If you look at the timber guys who are doing well in retail, if you look at some of their quotations they will blow your socks off. Talk about making the case. It reminds me of how upmarket conservatories are sold. You are getting a nice drawing and good presentation and you think, "Blimey, this has got value", instead of which the old joke about salesmen being order takers actually has come to pass. You place the order, bang, bang, scribble it down with little tick boxes here and a tiny little diagram there and sign here. It is a price thing.

MICHAEL NAGLE: Do you not think just as an observation that the package conservatory has done more damage to this industry than anything else, that you can see them in B&Q for £4,000? That is mind-blowing stuff. To think that when somebody will put it in, you cannot even get one chair inside it, that has done more damage to the industry than anything else because you have a low intelligence guy selling it, who is organising building work, moving drains, incredible, and we allowed it to happen.

KEVIN HILL: Isn't it almost uncharted territory? Again, being a newcomer into the industry and looking at it both from within and without, the industry started, what, 25 years or so ago. There are a lot of companies that were early adopters and a lot of people over a period of time made a lot of money, whether they were installing, selling, manufacturing, fabricating or supporting the industry, and over that period of time prices and margins had the normal lifecycle effect. I guess a lot of people have aspirations today for hankering back to those high margin, profitable days. But in many respects we are seeing for the first time, as I see it, the slowing or falling off of demand for the products, or stabilising of price or share, so in some instances prices might be falling, demand might be falling, and at the same time everything that we buy, including labour, to make a window has gone up. I don't see a concerted effort from the industry to seek to pass those on, with the exception of the glass people and to some extent the profile people, and that is fine. If you are a distributor in any business you like price rises because you just pass those on straight away. We have an inability it seems as an industry through the value chain to pass those very observable, very, very real cost of material increases on to our customer base. A couple of profile people have said to me in the past that they fear for the liquidity of some of their customers throughout the next six months. I think it's a big deal. But your point about easy entry; it is easy to go down, but it is very easy to come back again because the barriers to entry are very --

MICHAEL NAGLE: If you look at the price of wooden windows now coming in from Scandinavia, from the continent, they're three times the price of PVC windows and people are buying them.

DAVID RUZICKA: Yes, I agree. You have only got to look at aluminium. Again, I went to buy some product for a customer of ours and I went to buy two sets of double doors for industrial use. They were not big, maybe 1800 or 1900 wide. They cost me £2,300 to buy two sets of double doors.

MICHAEL NAGLE: And you paid it?

DAVID RUZICKA: Yes, and the customer paid it. You would have bought four - at least - PVC ones from anybody; any manufacturer. There is something fundamentally wrong at all levels.

To me, I would love to see an extrusion company go back to the days of making not obscene profits that you made before, but to make profit, because without profit there is no investment. With no investment there is no future for the product. That is another argument that I have, that if you look at the kitchen manufacturers, you go and try and sell a kitchen to someone now that has had a kitchen in for ten years, it is quite easy because there are lots of sexy things to sell. Basically, it is still a carcass with a door on the front of it, but you have got something to sell. You go and ask somebody who put PVC windows in ten years ago to change. What are you going to sell them? Really, what are we going to sell them; the same?

[Comment on this?]

KEVIN HILL: Aluminium or wood.

DAVID RUZICKA: Sell them aluminium or wood, and that is sad, though, that we have not developed, and we have not developed because there's no money. We're an industry without it.

SAM KENNEDY: It is a different version of recycling, isn't it? I think we are moving on to the next subject

Sustainability and Materials

Hi everyone, just a quick note from the moderator here: the trouble with long posts such as these is that the 'Comments' link is a long way down (ie at the bottom) - but there again, the idea is that you read it all before you comment anyway! If you want to jump straight in to comment, this will take you straight to the comments page, but you still have to scroll down to the bottom for the comment box (but newest comments get displayed on top!):

[Comment here]

MIKE RIGBY: Thank you all very much for coming and making the effort on behalf of the industry. I say that because the debate really is for the industry rather than for individual firms, and we’ve tried to get a pretty balanced spread of people who can actually talk about the industry as a whole and the various cultures in it.

I think one of the things that struck us was that it’s obviously a measure of the importance of the topics and perhaps the topicality that so many senior people have given up their time to attend. Certainly, I thank you for all of that but, interestingly enough, it wasn’t actually that hard to persuade people to come.

The debate certainly has caught the attention of the industry; it seems to have struck a chord. I’ve had my ear bent and almost torn off by some people who really felt they should have been here. There’s obviously a difficulty; you can either have a seminar with a couple of hundred people attending and then you don’t have much of a debate, or you have a debate. Well, we’ve gone for a debate, and you’re limited in numbers then to the number who can speak. In fact, the interest has been such that we’ve already had a letter to The Fenestration News - I don’t know whether Richard has had the letter as well - but it was written by a renegade conservatory guy. He actually calls it a rant rather than a letter, and he mentioned several people who he felt should be here. Interestingly, one of them actually is here: Mike Jackson has come along. Of the other people mentioned, one of them is in the States at the moment. Some others have said, “Is there going to be another debate? How can I participate? Put me down on the shortlist, I really want to do this”. So, there’s been an enormous amount of interest.

One or two names have changed from the list you originally got. Alex Main has stepped in for Scott Haslingden of Promac. Alex McNutt of Anglian had to attend a shareholders meeting but wants to be at the next one.

David Leng of Eurocell had to attend a board meeting that was moved. Mark Buckley, the Managing Director of Shepley, is away, but he wants to be on the next one. Martin Randall of Crystal Direct had to pull, too. I’d like to welcome Peter Hunt from Millenco who stepped in for Nigel at the last minute. Other people specifically who would have liked to have been here were: John Ogilvie of Network VEKA; Andy Jones of Edgetech; Graham Bailey of Business Micros; Roger Benton of HOPPE.

So, lots and lots and lots of interest and I think you can take it that we will be holding another debate on this. It’s clearly something that the industry feels they need. I’ll just pass you over now to Sam Kennedy, Managing Director of Spectus and Richard Schwarz of The Glazine.

SAM KENNEDY: Thanks, Mike. I think this is the first debate the industry has actually carried out. We had dinner last night and David (Ruzicka) was saying, “You’re a very brave man to try and do this”. But I think we’re in a situation now in the industry where we need to talk and we need to talk as individual suppliers to the industry itself. When you’re planning industry events such as this, it is inevitable that there’s an air of uncertainty and, dare I say, even suspicion as to the motives and objectives of the forum itself. I’ve asked myself, “Is this specific to the industry or is it another peculiarity of commerce and trade in the 21st century?”

I’m known for giving quotations at presentations, but I’ve got this quotation here which I think sums it up. It says, “People in the same trade seldom meet together even socially but that the conversation eventually ends up in conspiracy against the public or, in some circumstances, to raise prices”. Now, interestingly, that quotation was taken from The Wealth of Nations written by Adam Smith in 1776. So, it’s not a new factor in industry and in commerce itself.

I think we all agree that the problems we face as an industry are far divorced from the sort of seminal philosophy of Adam Smith, but today we’re confronted with new legislation, climate change, saturation and maturity, plus consolidation and rationalisation of all the supply chains. New products and new markets have driven massive changes in recent years and more is to come. Now, is this an environment conducive to investment or is it a signal to exit? We’ve called the debate “Old Roots; New Routes” because the industry is at a turning point and we’re leaving the familiar behind and entering uncharted waters.

Many of us fear what’s happening and are gloomy about the prospects of the industry itself, but I think many others would share my view of the opportunities before us as being at least as exciting - and this may be something for debate later on - and attractive as those in the 1980s. I’ll be interested to see what your comments are. I’ll hand over to Richard now.

RICHARD SCHWARZ: I’m Richard Schwarz, Publisher and Editor of The Glazine. I was also the Editor of the Glass Age magazine for some years and I joined that in 1985.

I just want to echo what Mike said about the uniqueness of this event. In the 20-odd years that I’ve been in business there’s been nothing like this that I can remember. It’s unique for a number of reasons, not least the calibre of the participants - myself excluded, obviously - and also the line-up of discussion topics we’ve got, I think, are very “of the moment” and strike the right note and hopefully we can get a good discussion going.

Also, it’s unique because we’re going to continue the discussion by publishing it on The Glazine and throwing it out to a wider audience and getting a bit more feedback in the coming weeks and months. So, hopefully you’ll log into that because you might have to defend some of your comments against other comments made in the future.

On that note, it might be worth saying that we want a frank and fearless discussion here today. Obviously nothing will be put up on The Glazine before it’s debugged for libellous or defamatory statements, so feel free to let rip, as it were, verbally anyway. I hope we’ll have a good discussion and I’ll hand it back to Sam to kick off the first topic.

SAM KENNEDY: Thanks, Richard. The first topic is PVC and sustainability. Sustainability appears everywhere, not just in our industry. It’s one of these generic words; what does it actually mean? It’s interesting, I looked it up on the internet to get what they would call the exact explanation of sustainable development. It says, “Sustainable development is development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. I think that encompasses the word itself. Giles, would you like to make some comments on that?

GILES WILLSON: Yes, sustainability is, I think, a bigger topic than just that definition, and I think one area which the industry doesn't talk about often with sustainability is profitability. That is one of the key aspects that is often forgotten because you have to be profitable to be a sustainable business. There are many elements of sustainability and I think profitability is one.

You also want to have a product which you manufacture and install - and it doesn’t matter what part of the industry you’re working in - if you’re manufacturing glass, windows, you want that product to be as good as possible to go into that house or other building, if it’s a new build or replacements. Therefore, you want to have a good lifetime and you want to make it as energy efficient as possible because windows do contribute to the energy efficiency of the building. New build, it’s the external envelope which is the energy efficiency and often windows and doors are forgotten and are now shown to be quite a vital aspect.

With the right products you actually have a thermal insulation layer. Additional products such as conservatories produce buffer zones, so it’s quite interesting that glass and our industry have a major contribution for the environment. We really have proven to both government and other parties that we have a major part to play. We just hope that they will support us a bit more in the future.

SAM KENNEDY: Does everybody agree with that or have any comments on that one? How does it affect your business? David, you were talking about some of this last night. How does it affect, shall we say, the sharp end of the business?

DAVID RUZICKA: I think in most industries today there are lots of buzz words put around, but certainly when people talk to me about sustainability it’s interesting that profit is in there and this is one of my arguments about our industry. For the majority of the people at the sharp end - certainly manufacturing-wise - there is no real profitability to create sustainability in the future for our industry. We’ve got people working for absolutely next to nothing, and if you look at some of the reports that are going out of the average profit that a manufacturer could look to make, you’re talking an average of 1.4% for an industry that’s turning over billions. It’s absolutely ridiculous.

The problem with sustainability is unless you’ve got the profitability, I don’t know how we’re going to sustain it. That’s my argument with it. Then everything else that comes along about getting into new build with it and where PVC’s going, I think a lot of this comes from right at the top. I think it comes from people like yourselves, extrusion companies and downwards from there. But as I say, my argument will come in a little bit later when we get into the nitty-gritty, so I’ll leave the rest of the comments for a little bit later if I can.

SAM KENNEDY: What about from the glass perspective, Tom? How does that affect you?

TOM RITCHIE: I think that we have made huge strides in getting the energy efficiency of buildings up to a level. I think if you look at our company sales across an international market and if you look at the standards that are given and held in Europe - even in Europe - you will find that the UK is actually at the bottom end of that. So, there’s certainly a lot of room to build.

Maybe the manufacturers of glass amongst us would confirm this. To some extent, this is technology-led in that in the old days before coatings on glass, you could only get to a certain level of U-value. Then the initial coatings, first generation, second generation, third generation coatings, and I’m not saying it’s limitless but there is a fair way to go.

Funnily enough, it comes back to the point these are technologies that cost a lot of money to develop, for manufacturers to invest in the plants to make millions and millions of pounds. Unless there is a profit return on that, people are not going to make these things just for fashion or fun.

So, the sustainability issue is one side, but, as I say, I think the standards that we have in the UK, we’ve moved from zero, let’s say, to level one and level two. Safety glass: I’ve been in the industry long enough to remember with horror that patio doors used to be in the early days 4 mm float glass and people were very happy. I can remember the breakthrough that came when the safety code was introduced as law and where that brought everybody up to a standard and now it’s absolutely common practice. The first houses that I bought in the mid-1970s were single-glazed; you just couldn’t do that now.

I think working, as I have, over many years with the GGF, the time it takes the trade associations to get government to up the standards, because as long as it’s a voluntary thing and as long as someone’s just selling a better item, there is always someone who will undercut that. To some extent the unit price of windows, many of you think it’s not high enough but it’s higher than it was because of the technology.

I think the developments in technology are one of the most interesting things that we can look forward to, and I think you’ve only got to look across to the insulation standards that are norms in Europe, where we might be going next. Certainly, one of the things that we may comment on this afternoon about EU legislation - and I think later this week the ministers are going to draw red lines - I can tell you once these European legislations begin to creep, we will find it very difficult to hold out for something individual against a standard that’s higher in Europe.

SAM KENNEDY: You mentioned the GGF then. Nigel, do you want to comment on the GGF’s line on this one?

NIGEL RICHMOND: The GGF has actually put together a Project Green which it started probably about a year ago now and we took that to the Labour Party conference literally only about three or four weeks ago. We had a pretty good reception from a representative number of MPs.

Sustainability goes right the way through. We’re always talking about the utilisation of valuable resources and keeping those resources available for future generations, but one of the big issues is the recycling of waste as well. The recycling of waste is an issue that’s just not being addressed, whether it’s land fill, whether it’s recycling PVC, timber or metal frames. The availability of waste recycling I think is an area that could make a significant improvement to the overall sustainability; because we can’t do everything, we’ve got to look at the whole chain.

Certainly, the GGF have put a lot of resources into it in conjunction with the BPF as well - we’ve not done this in isolation - and a lot of lobbying with government to get a sustainable industry as well. It comes back to the same thing: if we’re not making a profit in it, then nobody’s going to do it; they’re going to cut all the corners that they can. So there’s got to be a profitable industry to make that commitment to do it and to have their own sustainability as well. Sustainability covers everything.

SAM KENNEDY: From a BPF point of view, Martin, you’re putting a lot of pressure behind that.

MARTIN ALTHORPE: Yes, there are different points that have been raised so far: Giles talking about sustainability being more than just an environmental consideration. We always talk about these three pillars: the social, the economic and the environmental. Dave was saying about the profitability and, “Where’s the money?” because without that nobody can carry on doing anything forever.

I think the point made about the government changing the law and the safety glazing aspect being brought up, there is an interesting perspective on that because obviously when the government changes the law and improves things by legislation we all squeal because it means we’ve got to do something different. That’s the other unfortunate thing. While we all sit round talking about, “Wouldn’t it be nice if this happened? Wouldn’t it be nice if that happened?” the actual fact is everybody likes the idea of change but nobody actually likes change when they’re presented with it as an imposition. I think people like to lead change rather than to be led to change.

When we’re all talking to government and the various forums that we sit on, and we have government representatives there that drop hints about 0.7 u-values for windows coming up in the future and 0.9 u-values being brought in in the next couple of years - which would mean that, guess what, we actually can’t carry on making what we’re making now, we have to make something completely different - I think we should encourage people to think that way but we should be cautious with time scales because things always take longer to do than we would like and they always cost more and they’re never quite as good as we expect them to be.

Focussing back on PVC and the PVC industry because that’s what we’re here to talk about, the issue of recyclability and material availability for recyclability is something that’s going to trundle on for ages. Because at the moment it is not self-sustaining; it actually doesn’t make anybody money.

The Vinyl 2010 initiative which puts money into recycling is very shortly going to start running out of steam. The funding that goes into Vinyl 2010 is going to start to reduce. The thing is a voluntary agreement and, unfortunately, when the funding has to start coming from us, I think with the pressure on, when we’re making 1.4% and you get an invoice come through that’s got voluntary on it, you can hear the buzz of the shredder already because it’s not going to get many signatures.

So, I think there is a responsibility here to understand that unless we really focus on finding where the recycler is, finding an economic way of re-processing it, finding new products to use it that don’t require a huge amount of separation, treatment and all of those sorts of things, then it’s going to be quite difficult for us to carry on shouting about our sustainable industry because it’s very quickly going to hit a few problems.

I think we’ve got to be conscious of this. Can we recycle PVC? Yes, of course we can. The old thing about PVC isn’t recyclable is completely wrong; it is very easy to recycle PVC but it’s very difficult to get at the recycler. That’s the problem, that’s the thing that we all need to be thinking of.

NIGEL RICHMOND: You mentioned the voluntary commitment to Vinyl 2010. There are a lot of voluntary commitments we’ve all made as an industry and we’ve all made them voluntary before they’ve been enforced on us by legislation.

MARTIN ALTHORPE: Absolutely.

NIGEL RICHMOND: So, if you don’t meet Vinyl 2010 voluntarily, it will happen by legislation.

MARTIN ALTHORPE: Absolutely agree. In one way, you’ve got to encourage legislation because it is the only way that people get pulled up and into line. Because if you have a voluntary commitment a certain proportion will do that voluntarily and it’s normally the people that actually had the idea in the first place because they like that idea of change. The people it’s being imposed upon or the people that don’t want to be in it for the long term and want to make more money will not voluntarily contribute. We just need to be conscious of that; that whatever voluntary initiative we take, we’re going to get some freeloaders on that.

SAM KENNEDY: Alan Burgess, you’re a great exponent of marketing and you really push the different levels of marketing in the window industry itself. I wondered if you see sustainability as a marketing tool. Can you get that over to the public?

ALAN BURGESS: I think it’s all about changing perceptions. I think the biggest challenge that we have - although there are a number of challenges the industry has and there’s a number of challenges that the BPF specifically has - is that I’m afraid on the doorsteps the sustainability argument just isn’t coming across. Perhaps it’s because it’s more elite properties in which they’re going into - sash windows - but if it’s not wood, it’s not possible. There are huge steps forward. The A-rated sash window, we never thought a year ago that would ever be achieved but, frankly, most people aren’t interested at the moment in the energy rating. If they are interested, they find it very difficult to believe the statement that it will save all of the heat that you currently lose through your window. Doesn’t matter whether it’s 0.8, 0.7 or whatever, an A-rated – you do not lose any heat, it is energy neutral. They just do not believe that that is at all possible. When it comes to sustainability, I’m afraid I’ve been in the industry 35 years and I remember going to the GLC as a young rep. We would be turned out on our ear if you spoke about anything other than virgin PVC. If you said there was a bit of re-grind, forget that.

Frankly, today if we could manufacture PVC windows just with re-grind, brilliant, but I don’t believe that the actual marketplace takes us seriously. The general public do not believe what we say. They are terribly sceptical and you’ve got to break that down, otherwise you aren’t going to go anywhere.

DAVID RUZICKA: Yes, but I think they’ve got a genuine reason to be sceptical, don’t you? One of the problems I have with our industry is going back many years ago, when people asked me what I did, I used to say, “I’m in plastics”. You really didn’t like saying that you were in double-glazing and unfortunately, there’s some very, very powerful people sat round this table today but most of our industry has grown up from ex-sales guys leaving retail organisations and setting up on their own and that’s half the reason that people don’t actually believe any more what we say because half the people that are saying it don’t understand it anyway. That’s the problem we’ve got with it.

SAM KENNEDY: Is that the link? You feel that we’re talking about it here but it’s not getting across to the consumer because of that linkage?

DAVID RUZICKA: Without a doubt. For me, I look at the quality of some of the people that we deal with. We turn over about £23 to £24 million, and you’re probably looking at, I don’t know, probably the top ten of our customers I can sit down with and have a proper structured conversation. They’ll have a business plan; they’ll know exactly where they’re going. The 90% don’t. They’re basically working for a wage at the end of the day. There’s no structure to their organisations, but we have to rely on those people. It’s all being generated - unfortunately, I come back to you guys at the top - by the systems companies. Unfortunately, what you’ve sown, you’re now reaping.

MICHAEL NAGLE: You’re talking about profitability and sustainability. Like you, I’ve been in the industry a long time, but one thing that I would say about this industry is that there’s been no time or commitment spent on training staff.

DAVID RUZICKA: Totally agree.

MICHAEL NAGLE: One of the things that I would say is the loss of knowledge from old guys like me that have learned this industry. You meet young guys in it nowadays, they haven’t got a clue. Not only that, but the ability to enter the industry has been the downfall. It was much easier to enter into the PVC or aluminium industry than it was the timber industry. The guys running timber shops, joinery shops, had to have a trade, had to have the knowledge. Okay, it’s gotten worse in the last 10 or 15 years because you’ve got these large supply-only frame operators and they’re encouraging it right down along the line. So I think that unless this industry suddenly starts thinking with its head instead of its feet, then that’s the only way it’s going to change and, not only that, it will add to the bottom line.

People don’t understand that just buying a frame, that’s it. You all know exactly what I’m talking about: you can set up tomorrow, you just need a frame, but there’s absolutely no in-depth knowledge with these guys and they’re competing with companies out on the street and the price is getting lower and lower and lower because the guy doesn’t have knowledge. He has no university degree, nothing, and that’s the problem.

JAMES HURST: May I just say something to support both of those things? Seven or eight years ago we realised that if we were going to sell any locks into the PVC industry, the locks had to be designed for someone who couldn’t install a door; to have so much flexibility that even an idiot would find that they simply couldn’t shut the door if it was really badly out of line and then, once they got it shut, there was enough adjustment, even if it was terribly twisted, to still be locked securely. Until we realised that we were losing business the whole time and that’s a terrible indictment.

MICHAEL NAGLE: It is; that’s exactly what I’m talking about.

JAMES HURST: Now we often find that it’s our technicians who are helping people to set up their own production lines. That, I think, just reinforces what you’ve both said.

SAM KENNEDY: I was going to ask Alan Trevethan as well because you’re in a slightly different niche market. We’re talking mainly trade and commercial but you’re on the new build side. You still have these problems, do you?

ALAN TREVETHAN: Yes. My view is if you look at the industry, the penetration of PVC into the new build market over the last 12 years going from something like 5% to 85%, that’s starting to reverse now.

The reason it grew, in my view, was that (a) the product worked for the builder; and (b) the product worked for the householder with the low maintenance issues. I think the problem is that now you’ve got things like eco home ratings coming in and you’ve got other products now saying that they have fewer problems with maintenance with pre-finished timber windows. If you add into this the sustainability argument, I don’t think as an industry the PVC industry has done enough to make sure that their product is seen as sustainable.

For instance, on housing associations where they get paid by the government to make their homes eco rated they’re taking timber on board because they can gain points. Not necessarily because they believe in the product or certainly not for the maintenance issues because they still see it as something they’re going to have to maintain, but simply because they can get more points for using a timber window.

Until we get that argument over and actually get the PVC product rated in terms of its sustainability, then I think we’ve got a problem.

NIGEL RICHMOND: That was done recently. The BPF did a massive exercise on that and there was a danger of PVC being rated far too low. Through a lot of people in the industry they got evidence of 40-year-old windows in Germany and 30-year-old windows in this country and did a tremendous amount of effort to get the BRE Green Guide and PVC was correctly rated, I think.

ALAN TREVETHAN: Can I just jump in there, though, because I think there’s a huge difference between us, as an industry, making sure that we can get a rating and then actually convincing the people that are making the decisions, or the householder, anyway.

NIGEL RICHMOND: But if you were still rated as C in the BRE, you are on the back foot right from the start.

ALAN TREVETHAN: No, I agree that we had to do it. I’m saying we now have to convince people that it is a sustainable product.

MARTIN ALTHORPE: The reason that we did the work was because obviously the Code for Sustainable Homes which is coming - which is the points system which I’ll say a bit more about in a minute - that uses BREEAM, which is a BRE methodology for coming up with the rating. So, the Code for Sustainable Homes, which is what people will refer to to make those decisions, relies on BREEAM; BREEAM relies on the Green Guide to Specification.

The Green Guide to Specification is where - as Nigel was saying - we’ve currently got a C rating. There’s an A, B, C category in there. Timber is A, GLP is A, believe it or not, and PVC is C. One of the methods that they use is a European standard life-cycle assessment system, and one of the key things in there is that they say a building has a lifespan of 60 years.

PVC had a lifespan of 25 years; therefore, you had to install 3 windows in the lifespan of the building. The work that we did now gives PVC a 35-year lifespan, which means you only have to install it twice, even though that’s probably not the case. One interesting point here is that soft wood timber windows still only have a 25-year lifespan, so you need one extra timber window to go in. Now, bear in mind previous LCAs have actually pitched PVC and timber in a very similar category. It’s within statistical error; they’re within 5% of each other. Now if you have to install one less timber window, common sense would tell you that PVC is going to look a bit better than it used to.

The frustrating thing with the revision for the Green Guide is that it should have been completed last year; we’re now told it’s not going to be completed until next year.

ALAN TREVETHAN: But that’s back to the perception thing.

MARTIN ALTHORPE: It’s back to the perception thing, yes. But there was a lot of work went into that. There was a huge amount of work for all different companies. Interestingly, Rehau put a lot of work into that particular project a little while ago, a couple of years ago, and actually didn’t get very far with BRE. He couldn’t convince them to change their lifespan assessment because it was only one company.

I think the BPF represents about 80% of the profile extruders now including Rehau. With that amalgamation of data, we were actually looking for a 40-year and got 35, but a 10 year increase is quite significant. We were quite pleased with that. Let’s just hope that it is significant enough, but hopefully that will change.

SAM KENNEDY: The second point on the agenda was can any one material be used in the future itself? As a group, we’re in PVC, we’re in timber, we’re in aluminium, etc, even steel. Is there one single material that can really take us through into the future?

MARTIN ALTHORPE: Well, no, there isn’t, but I said recently to a specifier, “If the Victorians had had PVC what do you think all those sash windows would be made of?” Because let’s face it, as an era they appeared to be real early adopters of everything, didn’t they? It was the industrial revolution. Every new thing was taken up with … We appear to be in a luddite era now where everybody harks back and wants everything to be like the past except, obviously, the amount of money they’ve got and the standard of living.

SAM KENNEDY: Kevin, again, you’re a company that looks at it differently. A lot of us have been in the industry a long time. You’ve come from a glass background into window manufacturing itself. What are your views on the sustainability side?

KEVIN HILL: I think it’s interesting listening to Dave’s point there about the customer base. We operate in the private RMI sector. We don’t get involved in new build or commercial work, and our customer base is unsophisticated to the extent that most people sitting around in their organisations would not understand or would not feel comfortable with this. So the whole issue of sustainability, window energy rating, agenda items that we’re comfortable with simply doesn’t have a resonance with that customer base.

I think equally as importantly when we talk about window energy ratings, Alan’s point was really interesting there about, “They don’t believe it”. At least you’re having the conversation; half of our customers, some of whom buy glazed product from us, don’t even want to have the discussion because they don’t see it having any resonance in their customer base, which is the home owner.

I think lobbying is a huge thing. I came from a couple of other industries in building products and a huge benefit to having a united, coherent, lobbying front with government, who only want to talk to one body at any one time, is without doubt worth its weight in gold. I think GGF, BPF, CPA - Construction Products Association - all have roles to play there but I don’t know how well those bodies come together to actually represent the window industry per se.

Training, I think, is another big deal. I look around the table here and with the exception of two companies - I think Rehau and Pilkington, forgive me if there are any omissions there - there are no PLCs, multi-national organisations involved in the UK window industry. They have a reputation for throwing money at training, education, training on the job, for having people go to external courses. Yes, we’re a private equity-backed business. Training doesn’t feature very heavily on our P&L, I’ll be the first to say that, and we’d like to think that we’re a reasonably professional organisation. It doesn’t have, again, a huge agenda in our organisation.

Coming back to reputation, I worked for Pilkington in the insulation side for awhile. Boy, the cavity wall insulation people had exactly the same problem, but you have a look at the share prices of businesses that are involved in insulation. Thanks to lobbying on a European level, insulation standards are now far higher than they ever were and the reputation of insulation being sold in direct sale and on the commercial side, it doesn’t have the same negative connotation, shall I say, that we feel we have here.

Now, I don’t know whether we’re all sat around here believing our own publicity. “What do you do?” “Well, I’m not a double-glazing salesman, I’m in engineered building products.” “Oh, really? How interesting. What are they, then?” “Double-glazing.” We almost get self-conscious about what we do. As Dave said, at last count it’s a £4 billion industry employing how many thousands of people?

Whatever happens to PVC in the next five years, people are still going to need windows. We’ve got to be at the vanguard of that and I think the purpose of this is to try and throw these things into the mix. I think it’s a fascinating period. I’ve been in it two years and even in those two years I’ve seem some significant changes and I think there’s more to come.

SAM KENNEDY: We’ll finish up with Nigel last because Nigel’s been into lobbying the government considerably with his GGF hat on. Is there a real presence from the government in pushing this through? I know we get a lot of sound bytes on it but are the government really interested in pushing this forward?

NIGEL RICHMOND: Well, we’ve had an awful lot of changes in government over the last three years, not just in ministers but also with the senior civil servants. Some people retired; we had some unfortunate deaths as well. So there’s been a tremendous change over probably the last three or four years but the message has been consistent from them. I don’t think it’s weakened. There’s now a new minister for this and we’ve had an all female cast for about a year or so and their resolve is strong. I don’t think it’s wavered at all. They will push it through. Martin, you threw away the old 0.7 and 0.9. Now, it was a discussion document but it was still there in a discussion document and they will push it through.

MARTIN ALTHORPE: Oh, it’s real. Yes, it is real.

NIGEL RICHMOND: The last change in building regulations we didn’t get any change. It will happen next time and I think this particular government, whoever the minister is, is very firm in their resolve on pushing legislation through. I’m sure they’d like to have it done in conjunction with a voluntary commitment and for us to make suggestions and discuss them and we will. I think they’re always out to consult and they will listen. I think we had the success - some people might not say success - over ventilation last year. That took an awful lot of discussion with government. Eventually, they listened and got there but that’s the first time I would say that they ever backed off a little; other than that, their resolve is very strong.

SAM KENNEDY: Just summing up this first session, would anybody else like to comment that I haven’t brought into the conversation?