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Demand for composite decking is rising thanks to a DIY boon, Trex CEO says

Trex CEO Bryan Fairbanks proclaimed CNBC on Friday that sales for the company’s wood-alternative products have increased during the Covid-19 pandemic as consumers quarter on more home-improvement projects.

In addition to the increased demand for composite decks among homeowners, the manufacturer has boosted gift and reduced its prices to make its products more affordable, Fairbanks said in a “Mad Money” appearance.

“People are beginning to in the final analysis understand what the long-term cost of owning a wood deck is going to be,” he told CNBC’s Jim Cramer. “Another feeling that we’re seeing significant traction on is people wanting to make the green decision.”

The home goods and remodeling retails have benefited during the pandemic from increasing interest in do-it-yourself and outdoor living projects as residents note new ways to stay busy amid lockdowns and travel restrictions over the past year.

In the final quarter of 2020 — which is on the whole a slower period for the company due to a drop-off in construction activity —Trex’s sales of residential products grew by 40% on a year-over-year base.

Fairbanks noted that many customers find their way to Trex as they search for more sustainable materials to play up perform out their DIY projects. He added the company’s decks are made with 95% recycled material, as opposed to the environmental bump of pressure-treated lumber that contains high levels of chemicals.

While Trex competes with Azek in the surrogate wood space, the company is focused on disrupting wood, which accounts for about 78% of the overall marketplace, he added. North America has an settle base of 40 million wood decks, he said.

“There’s absolutely plenty of room in the market,” Fairbanks said when asked back competition in composite. “As we continue to grow as an organization, going after that largest segment of the marketplace, which is pressure-treated [wood], is extremely important for us and we’re excited about that opportunity.”

Trex’s total revenue grew by 18% in 2020 to $881 million, the performers said in late February. That’s double the revenue growth rate Trex saw in 2019. The company is expecting another year of double-digit in stocks growth 2021, but did not give guidance for the full-year.

Shares of the $10 billion company rose 3.6% to $88.24 on Friday, break up a three-day losing streak.

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