July 21, 2008

Deer Park Construction Family Adds Wall-Panel Venture

By McLean, Mike

When family-owned Knight Construction & Supply Inc. began looking to diversify its revenues a couple of years ago, little did the owners know that the manufacturing business they would launch could eventually overshadow their longtime Deer Park-based construction company.

That, says company President Doug Knight, now appears likely.

Last year, the family formed a separate company named Knight Wall Systems Inc., which has acquired the rights to manufacture an innovative exterior wall-panel system. The system, developed in the early 1990s by a Finnish company called Stonel Oy, typically consists of thin brick veneers that are attached to a proprietary fastening system and ultimately installed atop aging or worn building exteriors.

Knight says the Deer Park company established a small manufacturing operation in a building- it shares with. 40-year-old Knight Construction, and now has its eye on opening several more plants elsewhere in North America in the coming years.

"My plan is to have eight plants in the U.S. and Canada in the next five years," he says.

The panels primarily are marketed by the Finnish company's U.S. arm, Woodinville, Wash.-based Stonel Inc., which granted Knight Wall Systems exclusive rights to make the product in the northwestern U.S. and most of Canada until 2018.

Knight says the accountant at Knight Construction knew Stonel was looking to expand into North America and recommended that the family check into it.

"We flew to Finland two years ago to look at the factory, the evolution of the product, and completed projects," Knight says.

Knight, his father, Ken, and brothers, Dave and Jim, who are the principals in both Knight Construction and the new company, decided the Stonel system was the vehicle they wanted to use to diversify into the building-products market, he says.

They formed Knight Wall Systems, developed its plant, and started operations over the past year. The plant occupies about half of the space in a 20,000-square-foot shop building at Knight, Construction's headquarters in Deer Park.

The manufacturing operation uses an automated system that places 3/4-inch-thick bricks on a template, fills the spaces between them with grout, and attaches a metal backing that connects the bricks and grout to a proprietary fastening system that contractors install on the outside of a building before attaching the panels.

During installation, joints between the eight-square-foot panels are filled with a flexible sealant, which is then spray coated with the same sand that's mixed in the panel grout, to make a seamless match of color and texture.

Knight says the company manufactures the panels to order and can ship them directly to contractors on five weeks' notice. In addition to brick, the panels also can be made with tile, manufactured stone, and metal, he says.

Knight Wall Systems currently employs seven people and-can manufacture one of the panels in about 5 minutes.

As demand for the product increases, the company plans to build more pants that will each employ up to 15 people and operate 24 hours a day, Knight says.

He says he expects Knight Wall Systems eventually to grow larger than Knight Construction, which employs about 60 workers and had $12 million in revenues last year. Knight Construction specializes in government and industrial jobs, including work on dams, fish hatcheries, and bridges, he says.

"We're backlogged through October, Knight says of the construction business.

Knight Wall Systems currently imports Stonel's fastening system, which involves galvanized steel framing and adjustable brackets, for the panels it makes, but Knight says he intends eventually to have those metal parts made by contract manufacturers in the Spokane area.

Harley Simonson, who was one of Stonel's founders in Finland, has returned to the U.S. as a sales representative for Stonel Inc. Simonson says Stonel's plan is to work with Knight Wall Systems to establish markets for the products in the Pacific Northwest and then expand throughout the rest of the country and Canada.

Simonson says the Stonel system should sell well in allowing economy, because it's used to improve buildings at costs that are much lower than building new structures.

The system provides more than just a cosmetic makeover, he asserts.

"It can be backed with insulation up to & inches thick and it has a passive ventilation system that allows heat and-moisture to escape without entering the building," he says.

During installation, the adjustable frame and brackets can correct structural imperfections in the outside plumb of the building, he adds.

Knight says the wall-panel system is designed to give aging and weathered buildings a fresh look and new life at a fraction of the cost of new construction. The system can save on renovation costs because it is installed over older surfaces, so old siding doesn't have to be torn off and taken to a disposal site, Simonson says.

The Stonel system can be installed in a fraction of the time that conventional masonry requires, and the system doesn't require modifications to foundations, he says.

Knight Wall Systems trains contractors in the installation of the systems.

"Contractors and developers are coming in from California and Atlanta," to learn more about the system, Simonson says. "It's easy enough that young carpenters can install it on a building, and it turns out perfect."

Key Way Construction Inc., of Deer Park, currently is installing about 6,000 square feet of the thin-brick paneling over aging wooden siding on the 23-year old Inland Insurance Inc. building, at 9016 E. Indiana, in Spokane Valley.

Jim Dinneen, owner of t he Inland Insurance brokerage, says he's impressed with the look and function of the new exterior.

"It's taking an existing building and improving its efficiency and visual integrity," he says.

Copyright Northwest Business Press Inc. Jun 26, 2008

(c) 2008 Journal of Business; Spokane. Provided by ProQuest Information and Learning. All rights Reserved.