A recent report titled “The Green Outlook 2011: Green Trends Driving Growth through 2015,” by Harvey M. Bernstein, paints a very rosy picture for green building growth in the coming years. Green market growth is described as “dramatic” and predicts that by the year 2015, green building will represent nearly half of all non-residential building construction, in dollars. From 2008 through 2010, the report shows that percentage of green market share increased by 21, 20 and 27 percent for education, health care, and office construction sectors, respectively, despite a large overall reduction of construction in those sectors over the same time period.
If these numbers and predictions are correct, it stands to reason that the green building materials market would run on a parallel track. But there has been some very troubling news published lately that seems to contradict the report. A growing list of green building product manufacturers are closing operations due to flat sales. Companies making products that just a few years ago were being touted as the greenest products on the market, making the top ten lists put out by several organizations, are going bust. Several manufacturers’ claims of newly invented green products coming to market shortly, mass produced and widely distributed, have gone unfulfilled.
Greener Gypsum Board and Drywall
Gypsum board is a material used in just about every building. Since its development and introduction into the U.S. building industry in the early 1900s, its use in buildings has become as widespread as it is varied. Originally designed as an interior wall finish, gypsum board products have been developed for use as exterior wall sheathing, roof substrate and insulation cover boards, shaftwall liner, and tile backer board. There is a great likelihood that in every planar surface of a commercial building today, a gypsum board product is in there somewhere.At the beginning of the millennium, two companies came up with greener gypsum board products and began aggressively marketing them to the design and construction industry. Cleanboard, a San Francisco-based company, promised gypsum board made with a combination of synthetic gypsum and recycled gypsum using only the power from the sun at its energy source for production. The company had estimated that it would be able to produce two million square feet of product in 2010, 10 million square feet in 2011, and 100 million square feet at top volume. To date, not one square foot of Cleanboard has ever been produced. In fact, Cleanboard changed its name to GlassPoint Solar and also changed its mission from producing gypsum board to providing solar energy equipment for sale to gypsum board manufacturers.
Another company, Serious Materials, began promoting its greener, alternative gypsum board product, Ecorock, a few years ago. Also located in the Bay Area, Ecorock is a drywall product made without gypsum that is touted as using far less energy to manufacture than standard gypsum board. In early 2007, the company hoped to be in commercial production in the first quarter of 2008 but because of the downturn in the economy this never materialized. Planned factories were never built and Ecorock never entered mainstream production. The only information about Ecorock’s availability on the company’s Web site is a short note that reads: “Ecorock is currently sold out in select beta projects in California only.”
In an April 2010 Global Gypsum magazine article “The Market for Green Wallboard,” the author opens with a summary of the green outlook report data and makes what seems to be an obvious conclusion: demand for green building materials will rise as dramatically as the predictions in the report for green construction. According to John O’Donnell, CEO of GlassPoint Solar, the report does not translate to an automatic increase in demand for green building products-at least not gypsum board and drywall. During a telephone conversation I had with O’Donnell, he explained that the poor economy makes spending money to build new or retrofit existing factories for greener products a financial impossibility for many manufacturers. Companies are in survival mode, holding on to what small share of the market they still have and trying to keep factories operating and people working. Even if there were a demand for greener gypsum and drywall products that paralleled the report, it would not be nearly enough to justify the huge capital outlay required to bring these products to market, according to O’Donnell.
Greener Building Blocks
In 2008, a company called Integrity Block received $2.7 million in funding to produce the “first green replacement for concrete block.” Made from an engineered soil composite, the block was designed to be cost competitive with concrete masonry units. The blocks contained up to 60 percent pre-consumer recycled content and about half as much Portland cement as standard concrete masonry. It was estimated Integrity Block used 40 percent less energy to produce. By all accounts this was a product that lived up to its green claims, performed well and was widely distributed and gaining a foothold in the market. But suddenly and mysteriously sometime within the last year, Integrity Block simply disappeared.Think "Pozzotive"
Kingston Block and Masonry Supply LLC, a New York state manufacturing company, developed a patented process to create top quality concrete masonry products using finely ground post-consumer recycled glass as a replacement for Portland cement and recycled aggregates. The company has been in business making concrete unit masonry for 10 years and made a complete switch to the newly developed sustainable blocks in 2009.Shortly after switching over to the newly developed product line, Kingston Block experienced the same economic slowdown as every other company, and sales plummeted by 50 percent. But unlike other manufacturers that found themselves closing shop, Louis Grasso, inventor of the new product and president of the company insists that Kingston is in business today only because he made the switch to sustainable products.
“I was fortunate to have my products specified for use in some large, municipal projects in New York that demanded the most sustainable building products possible” he says. Grasso has just completed construction of a new manufacturing facility that will make the ground glass Portland cement replacement, called Pozzotive, which is now producing product for his growing business.
Green Stock Market-NASDAQ OMX
A better way to track the green building market might be with the newly created NASDAQ Green Economy Indexes, which cover the entire green economic landscape. The index acts as a benchmark for green stock performance of advanced materials, biofuels, energy efficiency, green building, healthy living, natural resources, pollution mitigation, recycling, renewable energy generation, transportation and water. The family of green indexes covers green stocks with a market cap of $50 million or higher.In looking at the performance for green buildings at the NASDAQ Web site (https://indexes.nasdaqomx.com/green.aspx), growth is flat from September 2010 (when the site was launched) to the end of January 2011. When asked to comment on the discrepancy between this and the report, Rona Fried, CEO of Sustainablebusiness.com and co-creator of the indexes said, in an email response to me:
“The ... report looks into the future for green building which, when the real estate market comes back, certainly will be one of the major trends in construction. The Green Economy index simply tracks the current performance of stocks within each sector-so it’s based on real time, not future predictions. As I’m sure you know, although green building has fared much better than the overall construction industry, the companies have still had a very hard time during this recession.”
