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Hurricane supplies pile up

A quiet hurricane season is good news for everyone except businesses that count on sales of items needed during storms.

By ALAN SNEL
Published October 9, 2006

A Tampa plywood company had to unload its 4- by 8-foot panels at cost while a Sarasota generator company laid off its Internet-surfing secretary because the phones stopped ringing.

After two chaotic stormy seasons, this year’s hurricane-free weather was a blessing to emergency workers and homeowners in Florida.

But on the flip side, it has meant lower-than-anticipated revenues for businesses that were counting on selling everything from plywood to generators during this hurricane season, which comes to an end in November.

Last week, longtime hurricane researcher William Gray and protege Philip Klotzbach again downgraded their predictions, calling for just two more named storms in October and none in November.

Some forecasters now predict no named hurricanes will strike the United States the rest of the season.

How much has the plywood business plummeted as a result? Consider Tampa-based Bay City Plywood, which sells plywood at stores in Tampa and Pinellas County.

During a week leading up to a hurricane the past two years, Bay City Plywood sold out of 2,500 panels. Stack up that number against a typical week during this year’s timid hurricane season when only 100 to 200 panels were sold, said Joe Slack, Bay City Plywood buying manager.

“We took a big hit. We sold plywood at what we paid for (it),” said Tom Poole, Bay City’s general manager.

“We did not sell it for what we normally sell it at to make our margins,” Slack added.

Prices for plywood at Bay City have been cut to between $9.99 and $18.99 per panel, depending on the quality of the wood.

A national trade association, which represents 70 percent of the country’s panel manufacturers, reported a “retreat of the prices.”

“We’ve had a slowdown and drop a bit as far as the overall prices,” said Kevin Hayes, a spokesman for the APA — The Engineered Wood Association of Tacoma, Wash.

“You don’t want to say that we can use a few hurricanes. Our members realize it’s a commodity and that it’s cyclical,” Hayes said.

The per-thousand-square-feet price of plywood has dropped to $255 for this week compared with $524 for the same week of 2005, said Shawn Church, editor of Random Lengths,  a Eugene, Ore., publication that tracks lumber market prices.

But Church believes the big decrease was driven by the drop in demand for plywood caused by a slower housing market.

“The driver has been housing, not the lighter hurricane season,” Church said.

The generator business is also sluggish this hurricane season. A coveted item the past two storm seasons, generators languish in the storage room at Generate Solutions LLC in Sarasota.

“It was so slow we let the secretary go. She was surfing the Web,” lamented Mark Jackson, the business’ owner, who has clients from Tampa to Naples.

Everything from batteries and gas cans to flashlights and generators have piled up at Florida’s 140 Home Depot stores.

But those stores will simply delay in restocking those items to compensate for the quieter-than-expected hurricane season, said Don Harrison, spokesman for the Home Depot, the Atlanta-based home-improvement retailer.

“We fortified the stores and topped them off, and we got ready. This year was no different. And lo and behold, there were no storms. But none of the stuff is perishable,” Harrison said. “We’ll just sell through the stuff that we have.”

Harrison said merchandise managers at the Atlanta headquarters will coordinate with local store managers on schedules to restock hurricane supplies.

An executive with Power to Go, a Florida company that this year began offering a package of towable generators, offseason storage and guaranteed fuel, said the slow hurricane season has “lowered the urgency factor” to buy generators.

But he hopes that projected sales and revenues will still be met this year. Power to Go, an offshoot of Discount Rental & Sales, which is a West Palm Beach company that sells and rents construction equipment, projected the sale of 300 generators and annual revenue of $10-million to $15-million at three locations in Tampa, Orlando and

West Palm Beach, said Rusty Walker, vice president of sales.

Under the Power to Go plan, customers purchase generators, keep them at the company’s storage center and then tow them to their businesses before a hurricane strikes.

“We’re long-term guys. You’re protecting yourself for the next 20 to 25 years,” Walker said.

Even tarp companies such as Tarpaflex LLC in Naples were hoping to cash in on this year’s hurricane season but now retooling, said Bob Page, Tarpaflex’s owner.

Page’s new strategy goes back to the basics: relying on sales of tarps to boat owners and haystack farmers.

[Last modified October 9, 2006, 22:19:32]