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3 rd Asphalt Shingle Recycling Forum

3 rd Asphalt Shingle Recycling Forum. A Manufacturing Perspective Vince Brulinski GAF-ELK. AGENDA. The GAF-ELK Story – What and Why? The Roofing Industry Shingle Recycling Past and Present Post Consumer Shingle Recycling WWIM (What’s In It For Me?). We Read This Every Day!.

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3 rd Asphalt Shingle Recycling Forum

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  1. 3rd Asphalt Shingle Recycling Forum A Manufacturing Perspective Vince Brulinski GAF-ELK

  2. AGENDA • The GAF-ELK Story – What and Why? • The Roofing Industry • Shingle Recycling Past and Present • Post Consumer Shingle Recycling • WWIM (What’s In It For Me?)

  3. We Read This Every Day! Home Sales Slump at 8-Year Low By MICHAEL M. GRYNBAUM Published: October 25, 2007 Sales of existing homes fell 8 percent last month to the slowest rate in at least eight years…

  4. North America’s largest roofing manufacturer $2.0 billion sales 27 strategically located manufacturing facilities 3,700+ employees GAF is the only North American manufacturer with comprehensive system solutions in both both steep and low slope roofing Who Is GAF? 2006 segment breakdown Steep Slope Roofing Low Slope Roofing Specialty Building Products

  5. Elk is a leading manufacturer of residential roofing and other building products $896 million sales 1,400+ employees 10 manufacturing facilities Recent investments in state-of-the-art highly efficient production Strong market presence, especially in the Southwest and the West Who Is Elk? Business description LTM 12/31/2006 segment breakdown 2006 sales of $896 million Premium Roofing Products Composite Building Products Specialty Fabrics

  6. GAF-ELK Shingle Manufacturing Locations ELK Pre-merger BMCA Pre-merger Minneapolis, MN Millis, MA Erie, PA Myerstown, PA RGM – Fresno, CA Quakertown, PA Michigan City, IN Baltimore, MD Shafter, CA Shafter, CA Mount Vernon, IN Goldsboro, NC Fontana, CA Elk Glass Mat Tuscaloosa, AL Ennis, TX Dallas, TX Savannah, GA Mobile, AL Tampa, FL Combination Minneapolis, MN Millis, MA Erie, PA RGM – Fresno, CA Myerstown, PA Quakertown, PA Michigan City, IN Shafter, CA Baltimore, MD Mount Vernon, IN Fontana, CA Goldsboro, NC Chester, SC Elk Glass Mat Tuscaloosa, AL Ennis, TX Savannah, GA Dallas, TX Mobile, AL Tampa, FL

  7. Roofing Industry Snapshot Industry DriversComments Size Of Industry * 32 Billion; $10 Billion Mfg. * $5.5B Steep; $4.5 Low * Laminates $3.5 * Strips $1B Existing Housing * 142 Million and Growing Market Stability * 80% Remodel; 20% New Upgrading Systems * Laminates Now 70%+ * Trend Designer Shingles * More “Systems”

  8. Shift to Re-Roofing • Shift to re-roofing reduces the exposure to cyclical downturns in the economy and the housing sector; this trend is expected to continue (1) BMCA estimate

  9. America’s Housing Stock • The median age of the U.S. housing stock is 34+ years Source: U.S. Commerce Dept. NHCN Projection • The growing housing stock in the U.S. continues to drive growth in the re-roofing segment • On average, residential roofs are replaced every 15 years

  10. Strong Industry Performance • With non-discretionary re-roofing demand accounting for approximately 80% of industry demand, the asphalt roofing market is one of the most stable in the building products industry • Recent industry dynamics only temporary • Industry shipments in 2006 vs. prior year were negatively impacted by the lack of hurricanes • Industry has reduced capacity by plant closings of about 9 million squares. (Millions of squares) Source: ARMA & US non-reports

  11. Shingle Recycle Past Experience • Genstar Stone, Baltimore, MD, 1993 • Excessive Manufacturing Scrap • Landfill Fees Doubled • Purchase Grinder and Screen – Whoopee! • High Maintenance Cost • Poor Quality

  12. GAF-ELK Shingle Recycle Today • 12 Asphalt Shingle Recycling Partners • 13 Manufacturing Locations • 160,000 tons of Manufacturing Waste Recycled Annually • State Approvals = Less Uncertainty • Technology Advancements = Higher Quality • More attractive economics

  13. Post Consumer Shingles • Challenges to Market • Contractor’s Distance from Recycling Center • Segregating Roofing and Other CD Waste • State Testing and DOT Approval Processes • Process Variability and Asphalt Content • Local Community Concerns of Shingle Piles • Cost of Contamination Testing • Frequency of Contamination Testing

  14. Post Consumer Shingles Continued • Roofing Industry Faces Several Obstacles • Low barriers to enter • Numerous competitors with low overhead • Inadequate training and high turnover • Industry Image Problem • Thousands of complaints each year • Consumers don’t know who to trust • Consumers need help understanding who to hire

  15. WIIFM? • Roofing Manufacturers • Environmental Stewardship • Value Added Service for Contractor Programs • An Extension of Our Recycle Partnerships. • Contractors • Environmental Stewardship • Single Point Disposal • Lower Cost of Disposal • More Sales – Higher Margin

  16. WIIFM CONTINUED • Recycling Industry • Maximize Return on Investment • Constant Source of Raw Materials • Economic Scale –Thousands of Contractors vs. Few Manufacturers • Expanding Markets and Creating Value The Truth Is - Landfills Don’t Want Shingles!

  17. Questions? Comments? THANK YOU! Vince Brulinski vbrulinski@gaf.com O: (410)631-1443 C: (410)935-3664

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