Q&A with Phil Ellis: We Have Doubled Our Revenue Consistently over Last Five Years
- Nov 06, 2008
Phil Ellis, president and CEO of FrameMax, invented the patented technology for turnkey framing in 1996 and founded FrameMax in 2001. A privately owned company, FrameMax is the first steel framing company in the industry to integrate patented technology, CAD design and engineering into the framing manufacturing process. The invention revolutionized the way steel framing is used and assembled in the construction phase of residential multifamily housing, mixed-used space, assisted living facilities and other property types.FrameMax does a number of multifamily projects in the U.S. and abroad and a majority of its business comes from multifamily projects. Ellis talks to MHN Online News Editor Anuradha Kher about the technology, how the financial crisis is affecting his company and where the company will find its profits in 2009.MHN: What exactly does FrameMax do?Ellis: The architects provide the outline for the structure, which is based on 3D models on the computer. Those models are then used to manufacture the steel structures through automatic machines. The pre-fabricated frames are delivered to the job site ready to assemble with easy-to-follow layout plans. Components are simply riveted or screwed together using pre-punched holes. Our biggest competitor is concrete and we are about 10 to 20 percent cheaper than that and 30-40 percent faster.MHN: From what type of construction does FrameMax derive most of its business and profits?Ellis: Most of our projects are four- to six-story multifamily projects. Wood is very popular with single-family housing. In this financial climate, affordable housing is holding its own and seniors housing is likely to stay strong as well due to the number of baby boomers coming into the market. These properties have a preference for steel due to the fire issues with wood.MHN: How is your business affected by the financial crisis?Ellis: We have doubled our revenue consistently over the last five years but this year, we aren’t expecting that kind of growth. On the other hand, developers are more concerned about price than ever and since we are cheaper than concrete, we might get some clients who may not have thought about steel before.MHN: How is the company dealing with it? Ellis: Sixty percent of our revenue comes from international markets and in 2009, we think this will go up to 80 percent. We are focusing on international markets now more than ever. We are launching our business in the Middle East with an $8 million investment. The UAE, Kuwait, Saudi Arabia, Bahrain, Algeria and Turkey are all countries where there is tremendous construction going on.MHN: Will Framemax have fabrication facilities in the Middle East as well or transport material?Ellis: We will have an operational plant in Dubai by early next year to cater to our clients in that region. MHN: What are the challenges working in the multifamily sector in the U.S. as well as abroad?Ellis: Multifamily is far more complex than single-family housing. There are environmental as well as cultural differences. In the international markets, there is a preference for concrete in many places. They are comfortable with something that’s more stable so we have to make sure that we provide them the structures they want but at the same time, they are automated. MHN: What is FrameMax’s market share currently?Ellis: It’s hard to say nationally or internationally, but in California, we have 90 percent of the steel multifamily projects. In recent months, two small steel framing companies in California have shut down.