Vermont Castings flourishes in high energy economy

Vermont Business Magazine, Dec 01, 2006 by Edelstein, Art

If you haven't noticed that the price of a gallon of number two heating oil is over $2.60 a gallon, Vermont Castings has, and is doing very well as a result. The company, with an assembly plant and foundry in Bethel, wants to hire more workers to add to its 250 Vermont workforce as it tries to keep up with the demand for its wood and propane stoves and the products it makes for other companies.

Canadian Fireplace Manufacturer of Mississauga, Ontario owns. Vermont Castings. CFM has several other plants in the US Canada, Mexico and Europe as well.

Dale Trombley the Vermont plant's general manager said the market place for cast iron wood stoves, like VC makes, is at 200,000 units per year. Steel stoves sell 150,000 units but only in North America. Vermont Castings stoves sell in Japan, the UK and all of continental Europe.

Part of the sales spurt in Europe is due to the value of the dollar versus the Euro, with that currency having more buying power in the US. Thus, Vermont Castings products are desirable in Europe.

Vermont Castings' cast iron stoves compete with Jotul from Norway, Hearthstone, made in Spain but assembled in Morrisville, and Travis made in Washington State.

Trombley said his products also sell well because, "We have the cleanest burning wood stoves in the world from new technology called Everburn with lifetime warranties for customers."

While Trombley would not divulge sales figures, he said his company "owns an increasing percentage of the market."

Trombley also touts his products for their design and looks. "Our stoves are pieces of furniture not a clunky looking thing, because seven months of the year they just sit there."

'Me stoves can be enameled in a variety of colors "so it fits with the color scheme." There are 11 colors in all. A new stove retails from $1,200 to $2,500.

Design, said Trombley, is a selling point. The company sells a federal style stove, a traditional 19th century style, and a postmodem style sold primarily in Europe.

While men may be the primary woodcutters in a family, women, said Trombley "make the final decision especially on an enamel stove."

Vermont Castings products are sold through distributors but not the mass merchants like Home Depot.

The company operates two plants in Bethel. The foundry employs 110 while there are 135 workers at the assembly/enameling plant. The company makes cast iron parts for other manufacturers at the foundry, which pours about 100 tons of iron a day. The metal is scrap iron from New England bought from major scrap brokers who operate Junkyards.

In essence, said Trembley, "we are recycling automotive brake drums, and use about 25 percent pure pig iron imported from Brazil."

The price of scrap iron has stayed stable for the last nine months. The metal arrives on tractor-trailers.

The foundry currently makes hand dryer covers used in rest rooms, as many as 20,000 skillets a week for Lodge Cookware of Tennessee, parts for barbecue gas grills, and parts for competitors needing cast iron parts.

The company is hiring for both entrylevel foundry and enameling positions. Trombley said he needs 20 people and the average pay is $10 to $12 hour. This has been a problem. "There are no people in this area, and as fuel prices rise it's harder to find workers outside the area," he admitted.

What's fueling the growth here is not stove sales but the outside work for other companies. "It's the portion of the business we are expanding," said Trombley.

He said he sees a softening in the wood stove business as a result of the softening of the cost of fuel, and a warm fall to start with. But sales could rise dramatically in a day or two "if there was a huge catastrophe where power was out across New England. Then we would sell hundreds of stoves the next day."

"This market is driven by yesterday's news," Trombley acknowledged.

Trombley said his company and others have been able to stave off a stove onslaught from China because the weight of a typical cast iron stove is 550 pounds and only 75 to 85 will fit in a shipping container, which makes transportation costs prohibitive. Some brands are made in China, but he said, they are not yet a competitive factor as a complete stove. Some of the castings for gas stoves sold in the US are made overseas but not assembled there and are thus easier to ship.

The future looks rosy for the cast iron stove industry. "We see gas prices continuing to climb and that will mean sustained operating security and growth," said Trembley.