BIDDEFORD — A 10-year-old local company that makes composite decking and other products has entered a sales agreement with a New Jersey-based company that produces a variety of building products.

Correct Building Products, LLC, located in the Biddeford Industrial Park, will sell substantially all of its assets to a subsidiary of Building Materials Corporation of America, based in Wayne, N.J., according to a press statement by Correct.

In order to carry out the transaction, on July 2, Correct filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court in Portland. It is pursuing the sale under section 363 of the U.S. bankruptcy code.

Correct co-founder Martin Grohman classified the court filings as “good news that sounds bad.” It will allow the company to be sold “free and clear of obligations,” he said.

The economy, which has had a particularly dire effect on the building industry, said Grohman, is a major reason for the decision to sell.

The trend extends across the industry. “Being in the (building) trades I can see the effects of the economy, said Charlie Huntington, president of the Board of Directors of the Maine Contractors & Builders Alliance.

“There are extremely low levels of activity,” he said.

Huntington said his company, which installs insulation hasn’t been as negatively effected as other companies. One reason for that is he works on renovations, another is that he is one of the last of the contractors that is involved in a new construction, and one of the last to feel the effects of a business slow down.

Contractors who install foundations, one of the first groups to feel the effects of a shrinking new construction market, have seen their work dry up for a much longer period, said Huntington. That, he said, is a sign that few buildings will be going up in the foreseeable future.

“Business for most everyone is way off,” said Mark Patterson of PatCo Construction, Inc. in Sanford.

Although his company is fortunate and still doing well, said Patterson, he noted that some contractors that were building several homes a year have no work now.

Patterson said he uses Correct’s products because “it’s a good product made locally.”

But the challenge for Correct Building in particular, said Patterson, is “they’re in a market that has a lot of competition.”

He noted in addition to companies like Correct that make composite decking, there are other companies making hardwood and vinyl decking.

All are “shooting for a piece of the pie and the pie is shrinking,” said Patterson.

Because of a slowdown in business, Grohman said, the company had to lay off 25 employees in October.

That was another factor in the decision to sell, he said.

Although many of those employees have been hired back, the current number of workers is approximately 50, Grohman said he didn’t want to be in a position of again having to lay off employees.

In fact, he said, he hopes that if the U.S. Bankruptcy Court approves the sale, the company will grow, as will the size of the company’s Biddeford workforce.

Grohman noted that the company’s facilities in Biddeford will remain. “We’re staying put,” he said.

Grohman said he will also be staying to run the Biddeford division for Building Materials.

According to Grohman, the local community shouldn’t notice a difference with the company other than the possibility of additional hiring.

Customers also should be unaffected by the court proceedings and impending sale, he said.

The sale should be a very positive thing, said Grohman.

Because of Building Materials’ larger size and bigger marketing and sales departments, product sales should increase, said Grohman.

If the sale takes place, Correct’s composite decking will be added to Building Materials’ existing composite decking business.

Grohman said he expects the court to render a decision on the matter by mid-September.

Correct has asked the court for a quick approval of the sale.

It also asked the court to approve a sale process that would allow other’s to submit higher bids to buy Correct, according to the press statement.

Correct builds composite decking and decking accessories, railings, porches, docks and lumber.

CorrectDeck CX, which is used to build these products, is composed of recovered hardwood fiber and UV-stabilized polypropylene.

According to the company’s Web site, CorrectDeck CX was the first composite decking manufacturer to use polypropylene which makes a strong, stiff yet light composite material.

Building Materials Corporation produces roofing shingles, decorative stone, ductwork, in addition to composite decks and railings.

Building Materials was not available for comment prior to press time.

— Staff Writer Dina Mendros can be contacted at 282-1535, Ext. 324 or dmendros@journaltribune.com