Scherer Building Corporation
4825 West Lane, Minnetonka, Minnesota 55345 
Office: 952.470.8000   Fax: 952.474.1982   Toll Free: 1.888.422.6991

SBC IN THE NEWS

Honeywell looks to air-quality trend for healthier profits
Dee DePass, Star Tribune
Published October 16, 2003

Looking to ride what it hopes will be a movement toward designing "healthier" houses, Honeywell's homes division in Golden Valley has signed an exclusive three-year partnership with the American Lung Association to educate 2,200 home builders and heating contractors about devices that can zap mold, kill bacteria and filter pollutants from indoor air.

The national initiative links Honeywell to the Lung Association's Health House program, a 10-year-old effort that promotes techniques to improve indoor air quality and benefit asthma and allergy sufferers. If it's successful, the program should boost sales for some of Honeywell's higher-margin home products.

Honeywell and the Lung Association will host air-quality workshops for home builders in 50 cities nationwide, including sessions in St. Paul set for Dec. 8-9. Lung Association officials hope to see 1,000 association-approved houses built next year in Minnesota, the equivalent of 8 percent of the new home market. Working by itself, the Lung Association has overseen the creation of 30 such houses in Minnesota so far, but Honeywell's participation means the initiative can reach a broader audience, since Honeywell is underwriting the entire cost and covering the Lung Association's expenses.

Honeywell's round thermostats
Glen Stubbe
Star Tribune

Health House technical director Steve Klossner is convinced the market is ready, despite the extra cost -- generally $3,000 to $6,000 -- to make a home comply with the Lung Association standards.

"Honeywell offers us a great opportunity to get there because of their training. They are really big on training, and not just about their products. . . . That's the reason we chose them," he said.

The workshops teach building methods that help prevent dust mites, mold, leaky windows and wet basements, and warn against using certain paints, carpets and furnishings that release potentially harmful fumes. Contractors also learn how health problems can develop when indoor air is not properly ventilated, humidified or filtered, said Honeywell Health Solutions business development leader Tim Kensok.

Officials would not disclose exact sales for Honeywell's line of "whole house" air-quality products but said industrywide sales of portable and installed systems is about $800 million when builders costs are factored in.

Last year, Freedonia Group Research estimated that Honeywell controls 36 percent of a wider category of various home controls and products. If Honeywell controlled about a third of the whole-house indoor air-quality market, then its sales could be near $260 million, analysts said. Other major players are Venmar Ventilation, Research Products, Broan and Carrier United Technologies.

If Honeywell can ignite more sales, it would boost the company's home-and building-control products and services, which has estimated sales of $4.1 billion, down from $4.3 billion in 2002, analysts said.

Mark Winston, vice president of Honeywell's North American Homes operation, expects a "significant" increase in demand for homes certified to meet the Lung Association's air-quality standards.

Including temperature control and zoning products, "Right now it's a $2.8 billion [industry]. And we think that . . . the potential available market could be double for residential consumers," Winston said. "We already know that 50 percent of all family homes are directly impacted with allergies and asthma."

The products most likely to benefit from the Lung Association partnership include Honeywell's whole-house air filtration and ventilation systems, built-in humidifiers, zoned temperature controls and ultraviolet lights that kill bacteria in furnace ducts.

Sales of Honeywell's indoor air-quality products have grown roughly 11 percent for each of the past three years, Kensok said. The Morris Township, N.J.-based company, which formerly was based in Minneapolis and is best known for its home thermostats, recently began co-branding its products with the Lung Association to capitalize on the connection.

Inside Honeywell's Golden Valley plant, more than 800 filtration systems designed to remove 30 percent of all harmful particles in the air roll off the conveyor belts each day. The plant also is producing advanced systems that use layers of electrically charged plates to attract 70 percent of the particles from the air, Winston said. Both systems now sell at the same rate, but sales of the more advanced filters should pick up if more buyers insist on Lung Association-standard homes.

Jeff Schoenwetter, owner of JMS Homes and treasurer of the Builders Association of Minnesota, is a skeptic about Honeywell's decision to try to spur demand through contractors rather than going directly to home buyers.

"I am not in Las Vegas making odds, but I've got to tell you my money didn't bet that way. . . . It's not the builders and contractors that drive the consumers' decisions. It's the consumers who tell us what they want."

Randy Imke, president of Flare Heating and Air Conditioning in Golden Valley, agreed, saying that only homeowners with certain medical conditions or a bad experience in a previous home will spend the extra money to address indoor air quality.

Paul Nisbet, an analyst with JSA Research, a Newport, R.I.-based firm that tracks Honeywell and other manufacturers with defense divisions, views Honeywell's goals as "pretty ambitious," adding that "they will do well to meet them."

Klossner said the Lung Association was impressed by Honeywell's preparations for the Health House program.

"Honeywell came to the table with the most awesome training schedules," he said. "They offer training to builders not just on their equipment. They don't just try to sell it to builders. They train on window installation, foundations, durability and energy and bring them up to speed on what is called good building science.

"Minnesota has such strong and good codes that they are as close to a Health House as any other program. But the things we miss in Minnesota code that we think are absolutely necessary is air filtration and water proofing."

Scott Scherer of Scherer Building Corp. in Minnetonka built one Lung Association-approved house two years ago and plans to build two others next year. He believes that all builders could benefit from the new program and complained that some who don't use proper building methods pay for it later with repair time or attorneys fees.

"Building the house correctly in the first place is extremely important . . . so it doesn't rot out. It has to be ventilated properly," Scherer said.

Dee DePass is atddepass@startribune.com 

 

 

Scherer Building Corporation
4825 West Lane, Minnetonka, Minnesota 55345
Office: 952.470.8000 Fax: 952.474.1982
Toll Free: 1.888.422.6991

Minnesota Builders Lic.#20062933