Mobile home companies jumping to meet demand - Posted by The55+Guy
Posted by The55+Guy on September 11, 2005 at 13:51:03:
Mobile home companies jumping to meet demand
By Martin Burkey
DAILY Staff Writer
Decatur’s Keith Holdbrooks found it hard at first to reconcile the devastation of Hurricane Katrina with the windfall it dropped on the front door of his Addison mobile home business.
“It’s very devastating,” he said Wednesday. “I was not very motivated last week. On the front side of this, you watch it, and it’s a very sad situation. Then when opportunities start coming and you can see you’re putting people back into homes, you’re fulfilling a tremendous need. It’s a very important position for us to be able to fulfill.”
Holdbrooks, 44, is chief executive of Southern Energy Homes, Inc., founded in 1982. After lean years for the industry, it’s suddenly flooded with demand for mobile homes to shelter the hundreds of thousands of people left homeless. Companies are fielding calls from private industry trying to operate again amid the receding waters as well as government agencies trying to respond to the disaster.
“I haven’t seen anything like this in the 20 years I’ve been in this industry,” he said. “This storm is more devastating than any of the others we’ve ever had.”
Southern sold a few units in 1992 to the Federal Emergency Management Agency. It sold 1,500 after Hurricane Andrew. It built 450 homes last year after hurricanes in Florida. But this is the first time he’s seen big companies buying temporary homes for their employees in the affected areas, he said.
“It’s unbelievable what’s happened since the start of last Thursday,” he said. “We’ve basically worked all through the weekend. We are working with the government on contracts for FEMA. We have not received one yet. Our backlogs are increasing every day.”
The company’s stock has gone from 81 cents in 2001 to $5.40 just before the hurricane to upwards of $7.50 now. Holdbrooks has a 35-minute drive to work from his Indian Hills Road Southeast home, but he’s at work by the time he leaves his driveway.
“It’s been nonstop with the cell phone and electronic mail,” he said. “We meet here Monday at 6 a.m. and we’ll go to 8 o’clock and check in one more time before you go to bed.”
Southern was making about 35 singlewide units daily, Holdbrooks said. He won’t say how much he’s looking to increase production or whether it’s enough to justify building a new factory. He will say he’s planning a 10 percent to 15 percent increase in his work force of 1,350 among four plants in Winston County and one in Fort Worth, Texas. He plans to stick, though, with a single shift operation.
“We have said in the past we’re operating at 65 percent capacity,” he said. “Our ultimate goal is to get to 100 percent capacity by adding people and materials. This is not a three-month problem. This is a 12-month to two-year problem. People don’t realize how big and how devastating this thing was.”
About 20 percent of Southern’s production is singlewide homes. In the next few months, that will rise to 80 percent, with both government and private customers preferring simpler and practical floor plans, Holdbrooks said. He also expects to sell them outfitted with a complete list of appliances and basic furniture.
Southern is already facing skyrocketing costs for both building materials and transportation. Plywood and other lumber products, PVC pipe, carpet and the price of gas are making it difficult to quote a price to his callers, Holdbrooks said. Southern is putting people on a waiting list and when it’s ready to start production it calls the buyers back and quotes a price.
Manufactured Housing Institute spokesman Thayer Long said the entire industry was beginning to recover from a mid-1990s period when it was offering loans to people who couldn’t afford them. It doesn’t know fully yet the extent of the impact of the hurricane recovery effort.
“We haven’t really seen any firm number of what FEMA or the Department of Homeland Security anticipated the housing needs are,” he said. “However, we have seen estimates of a million rendered homeless. We could only see that translate into a tremendous production of homes. It’s certainly going to have an impact on local manufacturers like Southern Energy. We also see it having a broader impact in the industry as well.”
The mobile home industry produces about 135,000 to 140,000 homes a year, considerably fewer than the 373,000 that shipped in 1998. Officials note that investor Warren Buffet’s investment in Clayton Homes Inc. is giving new luster to the industry.