Crossing borders: for Causeway Lumber, thinking outside the box means selling abroad and moving beyond the traditional boundaries of single-family construction

Prosales, June, 2003 by Pat Curry

For about $44,000 a night, you and 23 of your closets friends can rent out Musha Cay, 85 miles south of Nassau, Bahamas. Billed as the most luxurious private island in the world, it comes with a staff of more that 30 to cater to your every whim; Fortune magazine calls it the "ne plus ultra of private island retreats." Much of the material needed to build this tropical paradise was purchased from Causeway Lumber, about 270 miles away in Fort Lauderdale, Fla., where every month for more than three years tens of thousands of dollars in building supplies were shipped out. The smallest month brought in $25,000 in revenue; the largest topped out at $65,000. "They just kept coming in to buy," says Causeway Lumber president Scott Whiddon. The nice part, he says, is that it didn't cost him anything to get that account, or any of the other $800,000 worth of business the company does each year in exporting to the Caribbean islands. "The business comes to us," he says.

Cash and Carry

From his perspective, perhaps that's true because Causeway doesn't have a sales rep with the responsibility of building up business in the islands. The dealer does no advertising beyond an ad in the Caribbean Yellow Pages. On the other hand, builders don't come back a second time if a dealer doesn't meet their needs--and Causeway has built a reputation for quality, service, and understanding the local codes in the Caribbean, which can be quite different from those in the States.

Shingles are a good example, says Mark Parham, Causeway's export manager. In South Florida, the building code requires that shingles have a 25-year warranty and be fungus-resistant. The islands don't need products that meet this requirement, so he's invested time in finding vendors to provide less costly alternatives that typically aren't available in Causeway's market.

Welcoming export business has reaped numerous benefits, Parham says. Not only are there few competitors in the islands, the deals are strictly cash-in-advance, which helps Causeway's cash flow. But that doesn't mean that service can be secondary, he points out. As with U.S.-based builders, the primary relationship drivers offshore are quality products, price, complete orders, and on-time delivery. "You have to make sure everything is pulled correctly," Parham says. "Back orders are a nightmare. If someone sends them junk, they don't get another boat for a month."

A freight forwarder handles delivery, including picking up the trailer at the yard and covering the liability. To ensure the orders arrive in good condition, Causeway builds crates out of 3/4-inch plywood for all the windows and doors it exports. While they charge for the plywood, labor to put together the crates is free. As a result, the cost is minimal for customers--and they get undamaged windows and doors, and a nice stock of plywood, too.

It's now an extremely successful business, but Whiddon admits he didn't pay much attention to the export market until 1993, although he had a couple of people on board who were pushing it for several years. "They were former [export] agents who traveled the islands and told us about the opportunities we were missing," Whiddon says. "At first I said, 'Yeah, yeah.'"

The company finally sent a manager offshore for a short time during a downturn. Soon thereafter sales began to flow because Causeway's name began gathering recognition through word-of-mouth referrals from builders, craftsmen, and shipping agents--and from a customs requirement to have the company's name on the outside of containers carrying their products.

Then Musha Cay came calling in 1994 and Causeway knew it had something. "There's a whole different strata of people building homes in the islands," Whiddon says. "There is interest from Europeans to locate there, and we're ready to go to the next level. Mark might [even start] knocking on some doors."

Family Ties

Being flexible and adapting to changing market opportunities have been a part of the Causeway Lumber story since the company was founded by Col. O.R. Whiddon, Scott Whiddon's grandfather, after he moved to South Florida from Georgia in 1933 to become a farmer. During the off-season he worked at a local lumberyard. In 1939, O.R. and a partner founded their own business on Sunrise Boulevard in Fort Lauderdale, then known as the 10th Street Causeway, hence the name of the business.

A year later, he bought out his partner and moved the business to its current location on the south side of Fort Lauderdale. Not only was it adjacent to the railroad tracks and close to the port, it was just up the road from the Naval Air Station, which was being used to train pilots for World War II. Causeway got a contract in 1943 to provide materials for the construction of the living quarters of the Avenger Torpedo Bomber Squadron; one of the squad's pilots would later become President George Bush.

After leaving the Air Force in 1949, O.R.'s son, Gene, joined the company. A visionary with an eye for new opportunities, it was Gene who suggested that the company get into the reinforcing steel market. Beachfront development was in full swing, and all the high-rises needed the material. "It was the right time and the right thing to do," Scott Whiddon says.