Building firm Syntheon sees opportunity in construction industry shifts
Tony Carper grinds the edges of a steel-reinforced thermal building panel after it was cut for a customer order at Syntheon's Leetsdale facility. The former Nova Chemicals company makes cast panels and concrete additives using polystyrene.
Steel-reinforced cast polystyrene building panels are stacked high at the Syntheon facility in Leetsdale.
Tom Miovas, front, and Dan Hilliker work on cutting cast polystyrene building panels to fill customer orders at Syntheon.
Tony Torres -- Specializes in construction and materials investments
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Inside a sprawling warehouse in Leetsdale, workers at Syntheon Inc. assemble insulated panels that have been used in the exterior walls of buildings as close as Mt. Lebanon and McKeesport, and as far away as Juneau, Alaska.
Before they are shipped from Syntheon, the lightweight panels -- made of expandable polystyrene resins -- are pre-sized for the customer, cut for window and door openings, and fitted with steel framing. When they arrive at a building site, contractors slide them into place.
The new owners of Syntheon are betting the economic recovery will bring a boom in commercial construction and continued demand for environmentally friendly products like the wall panel kits and a concrete additive also produced by the company.
"The construction industry is moving away from field-building activities to manufacturing components ... the 'green envelope,' " said Christian Echavarria, president and chief operating officer of Headwaters SC, a Sewickley investment group that bought Syntheon from Nova Chemicals Corp. late in 2012.
Nova, a Calgary, Canada-based maker of specialty chemicals and plastics which has its executive offices in Moon, used the Leetsdale facility in the Buncher Business Park along the Ohio River as a test site for several products that never got off the ground. One was a line of dolls stuffed with polystyrene beads; another was a disposable coffee cup made with polystyrene resins and designed to have better temperature control than traditional foam beverage cups.
In 2006, the company launched a highly touted venture with Dietrich Metal Framing to make energy-saving construction materials that combined Nova's polystyrene-based panels and Dietrich's steel. That was the launch of Syntheon.
"But then the economy went south and styrene as an investment material was tough," said Antonio "Tony" Torres, former president of Syntheon when it was owned by Nova and now a principal in Headwaters.
After Nova was acquired in 2009 by International Petroleum Investment Co. of the United Arab Emirates, the new owners deliberated about what to do with Syntheon and last March decided to sell it, Mr. Torres said.
Prior to that, Mr. Torres had met Mr. Echavarria at a party in Sewickley, where the pair bonded over their Latin American roots and mutual fluency in Spanish.
Intrigued by the products and Mr. Torres' vision for pre-fabricated construction products, Mr. Echavarria entered negotiations with Nova to buy Syntheon. Mr. Torres, meanwhile, left Syntheon to start his own consulting firm. Last summer, Mr. Torres joined Headwaters where he specializes in construction and materials investments.
The firm bought Syntheon in November for an undisclosed price, and kept the roughly 25 workers in Leetsdale and another 225 who work at two plants near Santiago, Chile. Nova acquired those when it bought Shell's expandable polystyrene business in 1999.
"Headwaters is not a private equity firm looking to clean up and flip companies," Mr. Echavarria said. "We look at it for the longer run ... When you look at the team that was in place, we felt the time was ripe for us to come in."
Syntheon sells its wall kits through a distributor to general contractors or subcontractors on commercial projects. Among the facilities that have used its wall panels are an aquatic center in Juneau, Alaska, that opened in 2011; the new Cornell elementary-intermediate school complex in McKeesport; and the Mt. Lebanon High School currently under going renovation.
"By coming into the factory to do the insulation and framing, you can upgrade the way things are done," Mr. Torres said. "The vision of where I want to take Syntheon is less and less erection in the field and more manufactured components."
Competitors already targeting the eco-friendly construction market include Blu Homes, a Massachusetts-based maker of pre-fabricated homes; and Project Frog, a San Francisco company that makes pre-fab components for commercial and educational structures.
Gathered at a table in the lunch room of the Leetsdale facility, company executives said they are optimistic Syntheon will add employees based on recent forecasts of a turnaround for the construction industry.
Last week, for instance, the Associated General Contractors of America said construction employment rose for the eighth consecutive month in January while December was the ninth consecutive month of increased construction spending. Construction jobs had risen by 100,000 since September, the trade group said.
While he would not disclose Syntheon sales results, Mr. Torres said he expects a 300 percent increase this year over 2012.
"We're definitely on the upside of the growth curve and positioned to create more jobs and products here."
The 89,000-square-foot facility that Syntheon currently leases in the Buncher park "can accommodate our growth in the short term," said Peter Humphrey, Syntheon president.
But since moving some employees from the Nova offices to Leetsdale, space is already getting tight, Mr. Echavarria said. "Our main conference room had to be converted to engineering and design space. So our conference room is now a kitchen."
First Published February 6, 2013 12:00 am