Plumbing giant Kohler announced recently that it will close its Canac kitchen cabinetry business as a result of the deteriorating housing market, construction softness in Canada, and rising raw material and energy costs.
“We explored all possible business options with our first preference being the sale of Canac assets to an interested buyer,” Canac president Ralph Howard said in a statement. “However, that option never garnered any serious interest. The last option we considered was closing the Canac business altogether, but unfortunately that is the reality we are now facing.”
Canac, owned by the Wisconsin-based Kohler, is just one of many cabinet companies coming to grips with the new economic realties associated with the struggling housing market and spreading credit crisis.
MasterBrand Cabinets recently stopped production at its Richmond, Ind., plant, which made semi-custom kitchen and bathroom cabinets. The plant closing laid off 275 workers. Greg Stoner, president of company, told the Indianapolis Star that the company “had no choice but to reduce manufacturing capacity in order to align production with marketplace conditions.”
Similarly, Merillat has idled its plant in Ocala, Fla., and will lay off 279 workers there by month's end. This plant had previously laid off 75 workers in January, according to the Ocala Star-Banner.
“The residential cabinetry industry is definitely mirroring the housing industry and has declined,” Howard told BUILDER Online earlier this week. “Many of the plant closings and employee layoffs seen over the past 18 months are reflective of the soft demand for cabinetry and the excess capacity in the industry.”
Howard says Canac, which manufactured and installed frameless cabinetry primarily in the new construction market, had been experiencing a decline in orders for some time in “an already crowded and price-sensitive kitchen cabinetry marketplace that itself has been in decline.” The bulk of the customers, he said, were big builders in the single-family home market and developers in the multifamily market.
Approximately 807 employees will be affected by the business closure in the United States and Canada, including 552 individuals at Canac’s cabinetry manufacturing facility in Stateville, N.C. Kohler says that the decision to exit the kitchen cabinetry business is based purely on the sub-par performance of its Canac business. Its other brands will not be affected.
A full Canac business closure is anticipated by year’s end.
Nigel Maynard is senior editor, products, at BUILDER magazine.
Learn more about markets featured in this article: Indianapolis, IN.
