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Tarkett Sommer increases net profit

Tarkett Sommer's production centre in Konz (Germany)

In the first six months of 2002 Tarkett Sommer achieved a turnover of 709.8 million compared to 737.1 million in the comparable period of the previous year. This decline of 3.7 percent is mainly attributable to the weak economic development in West Europe – especially in Germany and France, according to Tarkett Sommer in a recent press release.

Above all, it was the Residential sector that suffered declining sales: minus 10.5 percent for resilient floorings and minus 4.1 percent for hardwood floorings. The reason for this development: lower sales volume and high price pressure due to continued fierce competition. The decline in the Commercial sector could be limited to a minus of 2.3 percent. As in the years before, Laminates posted a sales increase and grew by 19.7 percent. Sales development by region was inconsistent. While West Europe suffered a decline of 6.7 percent, mainly as a result of the strong decrease in France (-7.9 percent) and Germany (- 20.6 percent), sales on the Eastern European markets increased again by 11.2 percent. North America reports a minus of 2.5 percent which, however, turns into a slight plus of 0.4 percent at constant exchange rates. Tarkett Sommer’s 2002 half-year EBITA amounted to ¤ 48.7 million, thus slightly exceeding last year’s figure of ¤ 48.4 million. Both figures include restructuring expenses of ¤ 3 million. Net profit for the first half-year 2002 could be increased to ¤ 14.5 million from ¤ 12.3 million in the first six months of 2001. At the same time, the company was able to reduce its debt position by 23 percent from ¤ 447 million in 2001 to ¤ 344 million in the first half of 2002.

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Pergo acquires new patent in the US

Raimo Issal, CEO and president of Pergo.

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The EPLF spring conference

The spring conference of the European Producers of Laminate Flooring (EPLF) which was held in the Classen Forum in Kaisersesch (Germany) was focused on the flooring market in the US and on sound reduction. Special guest was editor-in-chief Kimberly Gavin, of the American trade magazine Floor Covering Weekly.

With a share of 13 percent of their exports, the North American market is one of the most important for the laminate flooring producers gathered in the EPLF. Therefore a marketing working group of the EPLF has decided to focus in more detail on the local US market development. Despite the fact that the US flooring market suffered from the results of September 11, 2001, the prospects for the market are overall positive, according to Mrs Gavin. “Homeownership has become a priority again and with it the willingness to invest in home improvements and renovations has increased. This is potentially very beneficial for the furniture and flooring industry. Particularly hard floor coverings, such as laminate, wood, and tiles, are believed to enjoy significant growth rates in the coming years.” As a prognosis of Floor Covering Weekly states: laminate flooring is supposed to have a market share of ten percent by 2004 (2000: 3.7 percent), hardwood floors are expected to reach nine percent (2000: 8.4 percent), and tiles 24 percent (2000: 10.6 percent). Rugs are also expected to have better market chances as a result of this upward trend for hard floor coverings.

Kimberly Gavin explained that in the United States laminate and hardwood floors are currently only distributed via the wholesale trade and reach the consumer only on the retail level. But ‘Global Players’ among the American flooring producers have increasingly begun to sell their products through direct marketing. One of the factors influencing the recent positive developments in the American flooring market is the expansion of DIY-stores, yet specialized stores are still the driving force in the industry (with a share of 73.2 percent of the total volume of sales). Another significant development in flooring retail according to Gavin is the formation of so-called ‘Marketing Groups’ – organizations of single retailers, which have joined forces to have more leverage with the producers.

Sound reduction
Besides the US flooring market, the EPLF general assembly focused on the topic of reducing ‘room sound’. The EPLF wants to develop an industry guideline which offers standardized criteria for measurement and testing techniques to determine ‘room sound’. To achieve this goal an international task force was founded in the autumn of 2001. So far, this panel has decided to compare the noise-levels created by stepping on laminate flooring with a defined ‘standard laminate floor’ and give the percental differences as a valuation measurement. The testing procedure utilizes the so-called ‘hammer movement’ method, in which metal cylinders of different weight are dropped on the floor.

New members
The EPLF welcomed four new members at the meeting. The Faus Group (Gandia, Spain), joined as an ordinary member, and Baikowski Chimie SA (La Balme de Sillingy, France), Lamigraf GmbH (Bönen, Germany), and Vits Maschinenbau GmbH (Langenfeld, Germany) joined as extraordinary members. Now, the association has 21 ordinary members (producers), 24 extraordinary members (suppliers), and five supporting members (institutes etc.).

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FEP General Assembly 2002

The 46th General Assembly of the FEP (The Federation of European Parquet Industries) was held in june at the Katajanokan Kasino in Helsinki under the chairmanship of Mr Dieter Betz, FEP President. At the assembly the 2001 statistics were presented. The figures show an end to production and consumption increases in the FEP area.

For the first time since 1991, the European parquet manufacturers have been confronted with a slight drop in the production and sales volume within the traditional FEP area. According to figures from the FEP the 2001 production fell slightly by 1.3 percent to a volume of 62.1 million m2. Consumption followed the same development with a 1.2 percent drop to reach a consumption volume slightly below 80 million m2. If one adds the production volumes of the CEEC countries which have joined FEP over the past two years, being Hungary, Poland and Romania, the FEP countries produced 75.6 million m2 of parquet. The FEP remarks that the developments have, however, been quite different and varying from country to country. Linked to a strong decline in the parquet markets in Austria, Germany, Finland and Switzerland, with double digit rates, the production in these countries dropped as well, with some companies even forced to close down or go into receivership. On the other hand, the FEP notices a positive development on the Spanish and French markets in terms of volume, and this despite tough market conditions as more and more suppliers are trying to enter these markets as well.

Production
The figures show further that the production of mosaic parquet fell again, this time below 3 million m2 to 2.8 million m2 (-14 percent) and now takes up 4.6 percent of the produced volume. Solid lamparquet also lost considerably in 2001 with a volume decrease of 23 percent and drop in production share to 7.2 percent or 4.5 million m2. This drop seems to have been compensated for slightly by the increase in the production of solid parquet (+4 percent). Multilayer could once more increase the total volume by 500 000 m2 (+1 percent) to close at 45.3 million m2. In absolute figures, Sweden remains the most important parquet producing country within the FEP (23 percent), followed by Germany (15 percent), France (11 percent), Norway/Denmark (9.0 percent) and Italy (9.0 percent).

Consumption
Consumption of parquet in the FEP area experienced a slight drop in volume of 1.2 percent, remaining with 79.6 million square metres slightly below the 80 million m2 marker passed in 2000. The FEP explains that this was mainly due to the less favourable market conditions in some of the most important markets like Germany, Austria and Switzerland. Good performances in France and Spain could level the result out.
The FEP estimates that the total consumption of parquet in the EU and EFTA countries, however, (including non FEP member countries like UK, Greece, Ireland and Portugal) has increased to a total volume between 94 to 95 million m2. Germany takes up the biggest share with 27 percent, followed by Spain, which for the first time ranks second in the consumption of parquet with a share of 15 percent, before Italy with 14 percent and France with 11 percent.
Despite a clear drop in parquet consumption in 2001, Austria maintains the title of most important parquet consuming country, with every inhabitant ‘consuming’ about 0.60 m2/year. Norway/Denmark now rank second with 0.53 m2/year, before Switzerland with 0.52 m2.

Extra EU imports and exports
According to Eurostat, the Statistical Office of the European Communities, extra-EU imports in parquet panels increased by 35 percent in volume and 3 percent in value in 2001. The FEP is however almost certain that an error has slipped into the reporting system and assume that the import increase was in the order of 8 percent, to reach a total of 23.144.897 m2 (21.399.983 m2 in 2000). During the same period, European producers could increase extra-EU exports in parquet panels by 25 percent in volume (from 15.799.209 m2 to 19.670.937 m2). The FEP warns that the figures may be somewhat corrupted as most probably laminate floorings or parquet components are included in some of the tables. Imports originate mainly from CEEC and Asian countries

In 2001, the total European flooring market would have grown by only 0.38 percent. Despite the negative development in the FEP countries, Intercontuft assumes that the consumption volume in Europe in 2001 amounted to a total close to 95 million m2, corresponding to a 4.4 percent increase compared to 2000 and a 5.1 percent market share.
The FEP expects that in 2002 the total market for parquet in Europe will not grow substantially with no major changes to the market shares. “Some new capacities may enter the market within short, but the economic developments have already lead to the closure of some companies. Costs remain stable. In Spain and Italy, exotic, dark species remain popular, with increasing popularity for beech and maple rather than oak. On the other hand, beech is losing market shares in Germany and oak is returning there. The timing and degree of further progress of parquet sales will very much depend upon the revival of the construction sector in some of the main user markets of parquet.”

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Tarkett Sommer: 1st quarter net result increases

Against the background of a weak economy in North America and Europe, Tarkett Sommer achieved a turnover of Euro 346.4 million (2001: Euro 360 million) in the first quarter of 2002, a decrease of 3.8 percent.

Turnover development in North America remained at last year’s level (+0.4 percent) while turnover in Western Europe sank by 7.7 percent. In comparison, the trend in Eastern Europe continues to point upwards, with turnover increasing by 13.7 percent. Resilient Floorings fell by 7.3 percent and turnover in the Hardwood area also declined by 1 percent. In contrast, turnover in the Laminates segment again increased by a pleasing 15 percent. Tarkett Sommer achieved an EBITA of Euro 22.8 million for the first quarter 2002, compared to Euro 24.6 million for the comparable period in 2001 (-7.3 percent). The negative volume effects resulting from lower turnover were to a large extent cushioned by reduced costs, especially indirect costs. On the net result level, Tarkett Sommer posted 6.5 Mio Euro. This improvement of 6.6 percent versus the first quarter of 2001 (6.1 Mio Euro) is mainly driven by reduced net financial items following reduced interest rates and working capital level.

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Year 2001 results of Nybron group

The Nybron Flooring International Corporation (NFI) accomplished a turnover of Euro 439 million in its first year, the economically difficult year 2001. NFI reached an EBITA (earnings before interest, tax and amortisation) of Euro 37 million last year.

The group consists of Swiss producer Bauwerk Parkett, Gustaf Kährs from Sweden en Parquets Marty from France. The group was formed two years ago by Nordic Capital and HIAG, who bought Nybron from Skanska and then united Nybron with HIAG’s Bauwerk. NFI claims to be market leader in Europe, with a market share of approximately 20 percent.

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Germans face difficult market conditions

According to Ralph Plessmann, president of the VDP (Union of German producers of parquet flooring) production in Germany last year fell by 11 percent, from 10 tot 8.9 million square meters. Prefinished parquet even decreased 10.8 percent. Total inland supply (‘consumption’) dimished by 11.9 percent in 2001 to 22.32 million square meters, 1, 2 and 3-layer prefinished parquet losing 14.3 percent. Total imports were 15,0 percent lower than in the year 2000. Pressure on prices is continuing.

Ralph Plessmann stated that competition in some areas has taken on “ruinous forms”, according to trade magazine Objekt. During the recent VDP meeting he also referred to the bankruptcies of producers Osmo, Wittenhagener, Hazet, Bego and Behrmann. Five other suppliers discontinued production in Germany last year. Since supply on the European markets is still higher than demand and demand will probably not increase substantially in the months to come, Plessmann fears that market conditions will stay difficult, at least in 2002 and 2003. He remains positive about the strong position of wooden flooring vis-à-vis alternative floorcoverings.

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Interzum wants to bring back parquet

The international trade fair Interzum wants to bring back suppliers of wooden flooring to this event in Cologne (23 up to 27 May, 2003). Effective acquisition and communication should make this trade show again the center where European parquet fitters and producers of wooden flooring meet.

The synergy contained in delivering to the furniture industry and the interior building industry should provide export oriented parquet producers the opportunity to attract international buyers. Interzum’s aim is to win back the position Domotex took from them in recent years.

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US market for hardwood flooring doing well

Not what they expected, but still pretty good. That’s how the American business magazine Floor Covering Weekly sums up the overall market in 2001 for hardwood flooring in the US. “The industry at large was hoping to get back into double-digit-growth mode after rates fell into the single digits in 2000.”

Preliminary figures from Floor Covering Weekly (FCW) show total sales just under $1.8 billion last year, a 6 percent improvement over 2000 numbers. Volume however increased with only about half a percent, a sign that the average price of hardwood flooring slowly continues to rise. FCW: “The trend also indicates greater consumption of mid-to-upper-end, high-margin goods and an influx of imported product.”
Suppliers attribute the growth to specific product launches, merchandising and marketing initiatives or to improvements on the front end. Some suppliers did better than others which is sign of the diversity of experiences suppliers had to contend with. FCW: “Yet, there were still those issues that cut across several market levels, namely fluctuating raw materials costs, corporate reorganizations, distribution realignments and pricing pressures.”
The rising cost of hardwood flooring also manifested itself in the newly imposed tariffs on engineered imported product. “The changeover in tariff classification from 0 to 8 percent isn’t a good thing,” says a representative of Universal Flooring. Universal maintains a variety of lumber sources, which can serve as a cushion to fluctuations in pricing.

Cocooning
According to FCW significant factors, including the changing dynamics of residential, builder and commercial usage, had an important impact on hardwood sales last year. “Most notably was the phenomenon known as ‘cocooning’ or a retreat back to the home. Analysts say this trend was brought on by the events of Sept. 11 and homeowners’ subsequent desire for safety and security.”
According to supplier Harris Tarkett another trend driving residential consumption is the continued interest in high-quality products that enhance their indoor environments and have a positive influence on the well-being of their families. Hardwood floors are accepted as a design element in the home.
The growing demand among residential replacement is responsible for the increase in popularity and production of engineered hardwood flooring, particularly prefinished goods. Suppliers attribute this trend to the ease of maintenance and the versatility of installation these products offer. FCW mentions further the positive reception of the introduction of glue-free collections. “Glueless installation systems will bring down the cost of installation and have an impact on improving the profitability over glue- and nail-down products.”
Attractive interest rates have had an important impact on new residential construction in 2001 and boosted also the consumption of hardwood floors.

Distribution
Evolution of the retail and wholesale channels, also impacted business. “Full-line flooring distributors continue their success in garnering more of the overall category sales,” according to Mr Himes from supplier Mannington. “This is very much reflected by the substantial growth we are seeing from specialty flooring retailers having more and more success in the wood category.” Universal Flooring predicts there will be a trend toward more aggressive retail marketing strategies, especially from buying groups and large chains.

Outlook
Homebuilders expect this year to build almost the same amount of houses as in 2001, which will have a positive effect on the flooring industry. FCW: “The continued evolution at the distribution level will also usher in further changes in the hardwood category as the industry’s top wholesalers add and drop major lines.”
FCW also mentions a further stratification of retail price points down the road. “In a few years the bottom tier of the hardwood market will be dominated by products from Asia - not just for the better pricing but more importantly for better quality,” according to Mr Jakel from Nordstar. “Last year was a continuation of a trend in this direction that we have seen developing over the past four or five years.”

Import
Analysts estimate that imports grew roughly 8 percent from $62.6 million in 2000 to about $68 million in 2001. With the increase, imports’ percentage of the category’s domestic market share grew to approximately 3.8 percent of sales. Exhibitor listings from the important US trade fairs on flooring proof that a growing number of importers from abroad want to penetrate the US market. Not only overseas importers but also Canadian manufacturers have an important impact. FCW: “They used to import only 3 4-inch solid product, but now that’s transitioned over to engineered.” American suppliers expect them to capture more and more market share. Some importers are of the opinion that foreign-made hardwood flooring products, particularly those produced in Asia, are not necessarily having a negative impact on profit margins. Rather, they are leveraging their competitive pricing structures into higher profit margins for the dealer. Others view increased import competition as a good thing for the industry and say that more competition may lead to a declining market price but added that good competition with a quality product is healthy for any market.

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Raimo Issal, Pergo's CEO.

Pergo announces profit for the first quarter of 2002

Last year the Swedish manufacturer of laminate flooring Pergo made changes on the board of directors and announced an action plan to sharply improve their profitability. The first results of these measures seem quite positive. At last months Annual General Meeting, company president Raimo Issal presented a brief report on the earnings for the first quarter of 2002.

Pergo can announce that net sales during the first quarter amounted to SEK 905 M, an increase of 6 percent compared with the corresponding period of 2001, and operating profit amounted to SEK 7 M (loss SEK 54 M). Net debt amounted to SEK 203 M. According to Pergo the action program initiated in late autumn 2001 is proceeding as planned. The earlier announced forecast for whole year 2002 of operating profit amounting to SEK 50 M and a negative cash flow from ongoing operations remains unchanged.

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Sériparquet Germany

Sériparquet bankrupt

March 2002 Sériparquet filed a petition for bankruptcy. The French manufacturer of prefab parquet flooring belongs to the Séribo-group, which also owns furniture and laminate flooring manufacturer Alsapan.

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Main office Karelia

ITC decision in favour of Unilin

On the 22nd of March 2002 the International Trade Commission (ITC) in Washington rendered its decision in which it stated that Unilin (Quick-Step) laminate flooring with a specific type of click-joint, and its installation instructions, do not infringe certain patents owned by Välinge Aluminium AB.

The ITC instituded the case on December 29, 2000 based on a complaint led by Alloc Inc., Berry Finance NV and Välinge. The six respondents included in the ITC determination are Unilin Décor NV, Pergo Inc., BHK of America, Meister-Leisten Schulte GmbH, Akzenta Paneele + Profile GmbH and Roysol. “As we always have maintained that our products and installation instructions do not infringe the Välinge patents, we are very pleased with the ruling,” says Raimo Issal, CEO of the Pergo Group.
Unilin considers the ITC decision as another victory in their patent battle against the Berry Group and its licensor. Several proceedings are pending in first instance as in appeal against various competitors. Alloc, Berry and Välinge plan to appeal the ITC decision before the Federal Court. This appeal could take several months.

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Hornitex future still uncertain

Mid March Pfleiderer AG, Neumarkt, officially withdrew its offer to take over the Hornitex Group. The withdrawal is all the more surprising according to the Insolvency Administrator of the companies of the Hornitex Group, Dr. Werner Schreiber, given that Pfleiderer AG had only recently expressed its interest and just a few days before their final decision was still conducting negotiations in Frankfurt with the IG Metall trade union and works councils of the Hornitex Group regarding its takeover proposals.

The two financial investors remaining in the bidding process, Bridgepoint Capital GmbH and Orlando Management GmbH, have since stated that they have largely completed their Due Diligence examinations and have notified the Insolvency Administrator that they soon will present their final, concrete offers for the takeover of the entire Hornitex Group.
Despite the difficult economic conditions which prevail at present and are affecting the whole of the derived timber products industry, the Insolvency Administrator continues to believe that the business of the Hornitex Group is developing satisfactorily. It can be assumed in particular that the imminent rescue package will safeguard the long-term market success of the Hornitex Group.
Meanwhile, former managing-director Künnemeyer is accused of illegally transferring money from the company to his own account(s). These transfers allegedly were made between June 22 up to 27 last year, only two days before the official request by Hornitex for an extension of payment. Five of the money transfers went to the account of Otto Künnemeyer or to the account of his son Klaus Otto at the Sparkasse Detmold. One transfer of 100 000 DM was made to an account at the Basler Kantonalbank in Switzerland. The name of the beneficiary: Otto Künnemeyer. The total ammount of money concerned is 520 021 DM and 72 pennies. According to Insolvency Administrator Dr. Werner Schreiber the bookkeeping of the Hornitex company will be thorougly examined. “If we encounter any illegal transfers the consequences for the responsible persons shall be severe.”

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Patent dispute gets new ‘Japanese’ dimension

Last month a court in Braunschweig (Germany) decided that Kronotex infringed on two European patents for glueless laminated flooring in possession of the Berry Group. Kronotex reacted by stating that nobody can claim a patent for glueless flooring because glueless flooring systems were already developed in Japan in 1991. Kronotex argues that what is commonly known can never be monopolized by patents.

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Paloheimo terminates production in Riihimäki

After the reports of last year in which the Paloheimo Group announced its decision to divest the loss-making Parquet Industry, a group of Finnish investors came to the fore showing interest in taking over the production. Negotiations however have ended without any success and settlement. The Finnish concern Paloheimo has therefore decided after all to discontinue its loss-making Parquet Industry.

Paloheimo’s parquet business has shown heavy losses for several years. The slackening parquet markets and lower parquet prices have worsened the situation. According to Managing Director Eero Raito Paloheimo invested 30 up to 40 million FIM in the facility since 1995. The most important reason behind the problems of the Paloheimo Parquet Industry is the decline in turnover in Central Europe. Besides Finland, Germany was one of the main customers. Production will now gradually be stopped, depending on the amount of orders, raw materials and personnel. About 120 employees will lose their jobs.

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Austrian manufacturers exported more than 2.7 million square metres, a rise of 12.1% in comparison with the same period in 2000. The total value of exports was about 62 million Euro. This means that in the first three quarters of 2001 the Austrian industry exported more square metres than in the year 1998 as a whole. The European Union is still the most important market (67%) for the Austrians. Germany stays the main buyer with 50%, followed by Italy and Switzerland. But also countries like Spain, Denmark, Sweden and the Netherlands are getting more interested in the Austrian products. The United States, Canada, Japan and South Africa are the main importing countries outside the European Union. In the same period the Austrian imports dropped by 1.5%, a decline of 3.2 million square metres. The total value of the imports was 54.5 Euro (-5,6%). One third of the flooring came from Germany. Imports from China are still getting more and more important.

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Anti bacterial laminate flooring

German manufacturer Classen claims to have created an anti bacterial laminate flooring that destroys dangerous bacteria. The laminate flooring has an anti bacterial topping containing the additive Microban. According to Classen Microban stops the growth and increase of bacteria like salmonella and coli.

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Closing report Domotex 2002

Domotex 2002 attracted less visitors and less exhibitors in comparison with the 2001 edition. However, in a statement the organization expresses its satisfaction. “Some 43000 trade visitors attended the fair from 12 to 15 January (2001: 45558). In view of the muted global economic climate, the 1125 exhibitors (2001: 1145) presenting goods and services on 90000 square metres (2001: 96000 square metres) of display space, essentially approached their major event of the year in a mood of cautious optimism. Given the restraints of the current situation, the show had a surprisingly good run, signaling a positive mood swing within the sector.”

According to the organization a key factor for the exhibitors was the increase in foreign attendance up to 52.5 percent (49.4) of total attendees. “Domotex was thus able to consolidate its reputation as the leading international trade fair for carpets and floor coverings in an impressive and convincing manner.” Parquet flooring companies also expressed satisfaction with the outcome. “The high level of professionalism displayed by visitors to the show was the stand-out feature of the event,” asserts Ralph Plessmann, President of the German Parquet Flooring Industry Association based in Düsseldorf.
While the number of trade professionals from EU countries dropped slightly, attendance from America went up again to 2000 (1800 last year), and attendees from East Asia totalled 4100 (3500). The regional distribution of German visitors was equally positive: Apart from a slight drop in the share of visitors from northern Germany, there was a higher percentage of attendance from the country’s western and southern regions.

Parquet and laminate flooring
With a record number of 127 exhibitors (81), the parquet flooring sector is clearly moving from strength to strength. The Hannover Messe is delighted with these figures. “Such encouraging figures and sold-out exhibition halls confirm beyond any doubt that Domotex is the most important national and international showcase for parquet flooring.” OK, great figures but what about the products? There were not many novelties. It was more or less the same as at Domotex 2001: Glueless hardwood flooring, sound reduction systems, V-groove (now also available on veneer flooring, laminate tiles, etcetera). The difference is that on Domotex 2002 more companies than last year offered these kind of products. In the parquet flooring sector dark, reddish-brown wood tones and exotic timber varieties such as African doussie, merbau, penga penga and bamboo are (still?) very popular. Wood grain effects and antique look-alikes are also in demand, while stone, slate and terracotta designs present new alternatives to the ever-popular woodgrain effect used in laminated flooring.

The next Domotex will take place from Saturday, 11 January, to Tuesday, 14 January, 2003.

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“Different developments of parquet consumption”

On occasion of the recently held tradefair Domotex, Mr Ralph Plessmann, FEP Board member and President of VDP (German parquet flooring industry association) held a presentation in which he discussed the developments taking place in the parquet industry. According to Plessmann the supply of solid and multilayer parquet in 2001 could well have reached the amounts of the past year in the Western European countries. However there have been quite different developments of parquet consumption in the various countries.

Plessmann: “Whilst in the United Kingdom, Ireland, Spain and Italy growth rates of 5 to 10% were achieved and France and the Nordic countries reported a stable market, the German speaking markets of Austria, Switzerland and Germany experienced a clear drop. This may also have been the case for Finland. Especially the recession on the German market, still presenting the highest sales volume of about 23 million square metres, linked to the startup of additional production capacities in Western and Eastern Europe has led to an increased price competition on all European markets.”
FEP (European Federation of the parquet industry) assumes that, apart from the already known and planned installations, no additional production capacities will enter the market in the near future. Nevertheless, the intensive price competition could become stronger this year considering that, at least in the short term, increasing sales figures cannot be expected, and the already available and expected production capacities clearly oversaturate the markets. For this year, FEP therefore expects an additional volume expansion from the supply side. Furthermore the concentration process in the sector will certainly continue.

Differing dynamics
Plessmann: “Reasons for the drop in parquet consumption in Germany may have been the generally bad economic situation and falling consumer confidence resulting from this. On the other hand, the consumer retains a big interest in parquet flooring. This is proven by the increased market shares of parquet on the total flooring market and the strong increases in pro capita consumption in the various countries.”
According to Plessmann these differing dynamics in the development of the single markets, at least for the Central European countries, leave hope for rather important growth potentials in future. “The sector assumes, however, that also in the current year no increases in sales can be expected. This is caused by the general economic situation and the especially weak level of construction activity. On an average and long-term, on the other hand, parquet floorings will achieve growth in Europe and the world considering the lasting trend to wood flooring.”

In order to inform the consumer about the manifold advantages of parquet, FEP has started a public relations campaign. In order to increase consumption, parquet has to be put into the public spotlights even more. Plessmann: “Especially whilst experiencing a declining construction activity in Germany the opportunities for international contacts are very important for the further growth of our sector on all potential export markets.”

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Shaw starts production of hardwood flooring

After announcing its intention to build a laminate manufacturing plant last summer Shaw Industries now also wants to produce engineered hardwood flooring at the same facility. The wood flooring manufactured at the facility will feature Shaw’s VersaLock glueless installation system. “Glueless installation has generated tremendous success and consumer confidence in the laminate market,” says Bob Miller, vice president, Shaw Hard Surfaces division to the business magazine Floorcovering Weekly. “Applying the technology to hardwood flooring is a natural step for us and represents an outstanding opportunity for our customers.”
Miller expects that the location of the plant is an important key to the success of the launch. “Because the Southeast provides raw materials for much of the world’s hardwood needs, our north Georgia location gives us an additional efficiency that makes entering this market even more exciting.” According to Floorcovering Weekly Shaw will initially introduce 15 engineered products in the collection, available in both 5/16- and 1/2-inch thicknesses. Represented are natural, stained and exotic hardwood species like oak, birch, maple and cherry. The VersaLock collection will probably make its debut at Surfaces 2002. However, production at the Ringgold facility isn’t due to start until May or June. Miller doesn’t think that this will give any problems because in the meantime the products can be acquired via several global partners.

Hardwood Flooring from Shaw Industries.

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Dynamic growth of laminate flooring

The American overlay manufacturer Mead expects worldwide a continuing, dynamic growth of laminate flooring. Analyses from the marketleader show that in Europe production will increase by 20 million square metres to a total of 250 million square metres in the year 2001.

According to Mead the production capacity of several manufacturers has obviously increased but is still not fully in use. The prediction of growth in the North American countries is a moderate one, from 35 to 40 million square metres. Asia and the remaining countries will produce 60 million square metres in 2001, versus 50 million last year.
For the year 2002 Mead anticipates a raise in production of the same volume. Statistics of 1999 showed a worldwide production of 225 million square metres of laminate flooring. In 2000 the total production was 315 million square metres. In 2001 this amount will probably be 350 million square metres and the expectation for 2002 is 385 million square metres of laminate flooring. Reason for some optimism. However, 12 months ago Mead predicted 370 million square metres of laminate flooring in 2001. 20 Million square metres above their latest prediction of 350 million square metres.

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According to the Federation of European Manufacturers of Parquet and Wooden Flooring (FEP), the year 2001 announces itself as a year of reflection. This is a new development for a European industry that is used to evergrowing consumption and production figures. Whereas in 2000, an 8% increase in consumption and a 3,6% increase in production were reported, the expectations of the FEP are more modest for the current year, with the total market only increasing slightly.

“In addition to the general economic slowdown of economy and falling consumer confidence leading to bigger investments being postponed, construction activity has fallen strongly in some European countries, having an additional impact on the installation of floorings. Whether the tragic events of September 2001 will have consequences for the parquet sector cannot yet be ascertained,” states the FEP.
The Federation furthermore expects that for European parquet manufacturers these harsher market conditions will lead to a continuing pressure on a market already suffering from the consequences of overcapacity in production. “The start-up of new production lines and increasing competition from imported products, often from low-wage countries, do not improve this situation.”
Producers will also have to adapt to changes in the framework conditions, such as the introduction of the Euro and EU enlargement. The latter will create a bigger market, which European producers will have to seize for themselves.

Positive
However, the FEP is still positive about the future. Parquet producers are convinced that parquet will retain its popularity with the end-consumer. The product still has potential for growth in several European countries. “The trend towards parquet and wooden flooring will therefore last.”
The FEP ascribes the positive growth of parquet flooring over the past years to the following range of innovative developments that have improved the functional characteristics and, as a result, the wide range of applications of parquet flooring:

• - The development of environmentally friendly rapidly curing and more resistant lacquers;
  
• - The possibility of supplying industrially oiled surfaces;
  
• - The higher impact resistance of surfaces;
  
• - The development of prefinished two-layer single-strip parquet;
  
• - New parquet types for glue-free installation;
  
• - The use of heat-treated wood for parquet;
  
• - Factory applied noise insulation under parquet panels.
  

In order to make the end consumer aware of the many advantages of parquet, FEP has launched a PR campaign for parquet which is yielding its first results. The campaign was first launched in the German speaking markets before being extended to ther countries.

Further information on FEP can be obtained from the FEP secretariat in Brussels or at www.parquet.net

FEP headquarters in Brussel.

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The refinished White House floor, manufactured by Kentucky Wood Floors

White House floor refinished

A White House hardwood floor, manufactured by Kentucky Wood Floors, was sanded and refinished in August while President Bush was on vacation.

Kentucky Wood Floors manufactured the Quartered White Oak and American Walnut floor during the Reagan administration to replace a wood-simulated vinyl that was installed during the Nixon years. The 3/4-by-4-inch engineered planks were glued direct to the slab to provide a thick wear surface in lengths of up to 8 feet. The Rode Brothers of Los Angeles installed the floor in 1982, of course under supervision of the U.S. Secret Service.

The refinished White House floor, manufactured by Kentucky Wood Floors.

(National Floortrends)

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September 11 also ‘hits’ results Pergo

Pergo recently released an interim report on the first three quarters of the year 2001. Net sales during the first three quarters were SEK 2,826 M, declining by 5 percent compared with sales in 2000.

According to the company, lower prices and lower sales in major European retail chains and in North American specialty stores caused the decline. This year’s sales to The Home Depot exceeded last year’s sales, especially during the first six months of 2001. Sales for the third quarter declined 7 percent compared with the third quarter of 2000. Pergo had an operating loss of SEK 173 M for the period from January to September. In North America, the laminate flooring market was estimated to decrease slightly during the third quarter. A marked drop in sales was noticed after the September 11 attacks in the United States. In Europe, flooring products were negatively affected by an overall economic decline. Net debt increased by SEK 369 M since the end of 2000 and amounted to SEK 609 M at the end of September. Pergo is currently working on comprehensive marketing efforts and the launch of a new product portfolio.

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In 2001 German layers earned the world record in parquet laying.

Parquet flooring layers construct the world's largest wooden football

To mark the forthcoming football world championships 20 parquet flooring specialists and five flooring contractors are setting out to construct the world's largest wooden football at Domotex 2002. The finished artefact, assembled from panels of cherry wood, will measure a full 3.6 metres in diameter. The participators hope to earn an entry in the Guinness Book of Records.

The individual panels will be made up on site with the aid of 20 circular saws and then assembled into the finished football. The work calls for supreme accuracy. Only if each panel is sawn to the precise millimetre will they fit together to make up the complete sphere. But it's worth all the effort. If the ball turns out completely round, the parquet layers can look forward to their very own entry in the Guinness Book of Records. The team of skilled craftsmen is preparing for some five hours of concentrated carpentry on the Sunday of the trade fair, 13 January 2002. The finished ball will go on display in Hall 8 (Stand C 36). To highlight the global theme of the football world championships, the continents of the planet will be projected onto the ball. The plinth on which the cherry-wood ball is mounted will be professionally carpeted by the five flooring contractors on the team. The world record attempt is being staged by the two leading trade associations representing parquet flooring manufacturers and installers in Germany, in conjunction with Deutsche Messe AG, Hannover, the organizers of Domotex 2002. The event is designed to showcase the traditional skills of parquet flooring layers - and to highlight the planned introduction of a new apprenticeship next year. Domotex 2002 will be held from January 12 up to15.

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New date is 15 up to 17 September 2002. Allthough a discussion was going on about creating a kind of ‘Euregional’ fair which could be held in the southern Dutch town of Maastricht, this idea is - for the moment? - postponed. In 2002 the fair will be held for the third time at the Koninklijke Jaarbeurs in Utrecht.

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The Paloheimo Group reports it wants to divest its loss-making Parquet Industry. The Group considers running down the business of Paloheimo Parquets Oy unless any potential successors appear to run the business.
“We have been searching for a potential buyer or partners for several months, but negotiations have ended without any settlement being agreed. Winding down the business will be the most feasible alternative,” says Eero Raitio, Paloheimo Group's Managing Director, who has also been Paloheimo Parquets Oy's acting Managing Director since early August.

Since the beginning of October, Paloheimo Parquets Oy has entered into joint discussions with its personnel regarding the company's operating requirements. Paloheimo's parquet business has shown heavy losses for several years now. The slackening parquet markets since late last year and lower parquet prices have worsened the situation. The Group's parquet production will be subject to a seven-week downtime this year.
“Two years ago we launched an extensive restructuring programme at Paloheimo Parquets Oy, but we have not been able to put a stop to losses. Due to our sustained losses and great need for investments, the situation is difficult. We will take final decisions on the company's future after the six-week joint discussions with personnel,” explains Raitio.
Paloheimo is also in the process of searching for a new owner for the France-based Lemoine parquet factory. The main article of the factory has been massive parquet flooring, but the majority of its production is now closely related to the business of the Riihimäki factory specialised in hardwood strip flooring.
Paloheimo Parquets Oy's annual production of Lamella hardwood strip flooring totals 1.3 million square metres. The company's turnover last year amounted to FIM 175 million, of which exports accounted for 80 per cent. The number of employees totalled approximately 200, of whom 120 work in Finland.

Paloheimo is a diversified Finnish industrial group. Founded in 1889, Paloheimo is a family-owned company that operates in the global market. Consolidated turnover in 2000 was about FIM 952 million and there were 1250 people on the payroll. Nearly half of the turnover comes from exports and operations abroad. For over hundred and ten years, their operations have been based on know-how in adding value to wood for a variety of applications. Their main businesses are building products and furnishings, the sawmill industry and power plant operations.
The Paloheimo Group comprises independent and mutually complementary subsidiaries and associated companies. The Group's parent company is Paloheimo Oy. Business operations are concentrated within four subsidiaries: Fenestra Oy, Lundia Oy, Paloheimo Parquets Oy and Paloheimo Wood Oy.

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Europarket 2001 attracts more visitors

Europarket 2001, the trade fair on parquet, laminate and cork flooring, which was held last month in Kortrijk/Courtrai (Belgium) has attracted 4377 trade visitors, an increase of almost 40 percent in comparison to the 1999 fair. The exhibitors were quite satisfied with the number of visitors. Most of them were from the Benelux and neighbouring countries. About 25 percent came from outside of Belgium, most of them from the Netherlands (15 percent), followed by France and Germany with about 5 percent each. There were not many novelties on display. But striking was the growing interest of Belgian buyers, well-known for their appreciation of oak flooring, in exotic woodspecies.

The Benelux now has two rather successful trade fairs on parquet, wooden flooring, laminate and cork. Next year the Parket Expo will be held for the third time. Originally, this trade show was scheduled for May in Utrecht (Netherlands). Forced by the Dutch exhibitors the fair is now postponed and most likely shifted to the end of September or the beginning of October 2002. The location is yet unsure. There is a discussion going on about creating a kind of ‘Euregional’ fair which could be held in the southern Dutch town of Maastricht. Good example of an Euregional fair is the trade show Bau in Munich that attracts visitors from Germany, Austria and Switzerland. In Maastricht, the fair should be able to attract visitors from the Netherlands, Belgium, France and Germany. Because Interzum seems to fail in drawing much exhibitors from the parquet and wooden flooring trade in recent years, Maastricht could be a good option. But this would surely undermine the continuation of Europarket. Just one really good international trade fair every two years seems enough. Supposing that the market in the Netherlands and in Belgium supports a new international fair at Maastricht, this could well be the end of Europarket. But nothing is sure yet. How often do we see good ideas fail, even at the last moment? Perhaps Europarket will even want to cooperate with the possible new fair.

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Columbia Clic, glueless laminate flooring

The American company Columbia Flooring has entered into an agreement to sell its laminate manufacturing facility in Thomasville to Unilin Industries NV of Belgium. The transaction is expected to close during the third quarter of this year. At the same time, Columbia and Unilin will begin a long-term supply agreement whereby Unilin will manufacture Columbia’s existing glued and glueless laminate product offerings and also develop an exclusive Columbia Clic collection for launch at Surfaces 2002.

Unilin wants to develop an American manufacturing program for its Quick-Step and Uniclic laminate products. The company recently also signed some full American distribution agreements.
"The sale is a win-win situation for both companies and their customers," David Wootton, Columbia president, states in National Floor Trends Magazine. "The laminate market in North America is changing. With the introduction of glueless laminate, glued products are even more quickly becoming a low-priced, low-margin commodity. As a fully integrated, high-volume manufacturer, Unilin is able to deliver product at a price point we cannot match if we continue to manufacture the product ourselves." Philiep Caryn, Quick Step Marketing Manager: “The growing demand in the United States exceeds our wildest expectations. For logistical reasons it is therefore better to have an all American production unit then to ship the goods everytime from Europe to the United States.”

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FEP starts campaign to improve image

The Federation of European Manufacturers of Parquet and wooden flooring (FEP) wants to attract more attention from the media to parquet and wooden flooring. The Federation, which consists of 46 manufacturers and 6 national federations from 12 European countries, has therefore organized a special campaign for that purpose.

The campaign starts in Germany, Switzerland and Austria, but will eventually reach the other member countries. Filip de Jaeger, Secretary General of the FEP: “This will not be just an advertising campaign. It’s purpose is to give the media honest and objective information on parquet and wooden flooring. Some misconceptions on parquet exist, for example the confusion of parquet with products like laminated flooring and similar products. We want to take this confusion away and at the same time highlight the many positive aspects of parquet and wooden flooring. You could call it an ‘image campaign’.” When will the other members of the FEP join this campaign? “We have chosen to begin in countries like Austria, Switzerland and Germany, because these are very important markets. But we have sent the press material that we are using at the moment to all of our individual members. They can use it to initiate a campaign in their own country.”

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Alloc-Unilin patent dispute continues

Alloc glueless laminated flooring

The battle between Alloc and Unilin on the patent of glueless laminated flooring goes on and on. Both manufacturers try hard to get al legal advantage over their rival. The United States International Trade Commission (ITC) is deliberating over new evidence introduced into Alloc and Unilin’s patent infringement litigation.

Alloc seeks to gain leverage with its U.S. patents, now totalling six with the latest addition of an U.S. patent which it got last month. This patent concerns the mechanical locking system and has to do primarily with the system used in the production of Alloc Original.
“This patent is one in a line of successful efforts to create the opportunity for Alloc to defend its position and licenses against possible infringers in the field of mechanical–locking systems,” said Claes Wennerth, president of Alloc in Floorcovering Weekly (FCW). “This patent has allowed Valinge Aluminum and Alloc to improve their license and patent family strength.”
On March 5, Alloc introduced its fifth U.S. patent to the ITC, which has delayed all existing suits addressing laminated flooring locking-system infringements until its expected ruling date in January 2002.

Unilin is very confident to have a strong case because they have achieved several victories in European courts. One of them was in Hamburg last month. According to Unilin, the Court in Hamburg declared that Alloc’s Fiboloc system infringes on Unilin Utility Model DE 29710175. In legal terms, a utility model is an intellectual property right offering similar protection as that of a patent but is limited to a 10-year period.

Unilin glueless laminated flooring

“Since our European Uniclic patent is based on the same priority as the German Utility Model, we can definitely say that this German procedure was a serious test of our European Uniclic patent,” said Bernard Thiers, managing director of Unilin in FCW. “Now we can state that our intellectual property rights successfully passed this test.” However, the favorable Unilin decision in Hamburg is appealable and therefore not final.

In the US it all started on July 14, 2000, when Alloc charged Unilin with infringement. Later that month, both BHK and Unilin countersued. FCW: “Pergo, a Unilin licensee, also filed a separate suit against Alloc in the District Court of Columbia. These hearings have been postponed until the ITC reviews the recommendations of the judge evaluating the latest evidence. It is expected the ITC will receive this recommendation by late october and deliberate until january of next year.”

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Swiss manufacturers satisfied

Switzerland is one of the main European markets for parquet and wooden flooring. Recently the Swiss manufacturers of parquet floors presented the figures for the year 2000. These figures show that last year the Swiss market has stabilized in terms of consumption.

A slight growth in the consumption of parquet was recorded but this growth was less than the industry had expected. While inland production fell, an increase in imports occurred at the same time. Swiss exports also expanded. In spite of these results parquet and wooden flooring kept it’s marketshare of 13 percent on the Swiss market of floorcoverings. At the general assembly of the community of interest of the Swiss parquet and wooden flooring industry (ISP) in Grafenort/Engelberg, ISP-chairman Bruno Durrer called the recent developments “a good result in difficult circumstances.” One of those circumstances is the fact that the supply of parquet still exceeds the demand. Last year, production capacities in several European countries were expanded, keeping prices under pressure.

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Dutch want to break world record in parquet floor laying

German floor layers breaking the world record.

Last january, at the international trade fair for floor coverings Domotex, a group of German floor layers layed 15 square metres of parquet block flooring in less than four minutes. With 3 minutes and 42 seconds they are now the owners of the official world record.

Dutch parquet flooring layers recently announced that they want to break this record on the Parket Expo, a trade fair on parquet, laminate an wooden flooring which will be held somewhere in april/may 2002 at the Royal Dutch Jaarbeurs in Utrecht, Netherlands.

The fair will also host the European contest in parquet floor laying. The organisers of the contest expect competitors from ten different European countries.

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Slowdown in hardwood flooring sales in USA

Industry analysts and observers estimate that hardwood flooring sales in the USA mustered between 5 percent and 7 percent growth last year, although some manufacturers growth rates roughly doubled those numbers. This means a period in which hardwood flooring sales grew by double-digit leaps each year from 1996 to 1999, has come to an end. Total hardwood flooring sales in 2000 reached approximately $1.61 billion, with volume increasing just 4 percent to roughly 820 million square feet. The culprit, several experts explain in Floor Covering Weekly, was a slowdown in sales heading into the third and fourth quarters of 2000, combined with a steadily declining consumer confidence index from Sept. 2000 to Jan. 2001 which in turn dramatically affected retail store traffic, a negative savings rate at the consumer level and a falloff in shipments.

Pre-finished traditional solid strip from Harris-Tarkett.

Market fluctuations
“Even though 2000 generated a record year for our hardwood sales, it could have been even better,” said Frank Riddick, president and CEO of the Triangle Pacific Flooring Group, which markets the Bruce, Hartco and Robbins brands, to Floor Covering Weekly. “The slowdown that started at the end of the third quarter accelerated throughout the fourth quarter, which negatively impacted what had started out as an absolutely outstanding year.” TriPac represents roughly 42 percent of the domestic hardwood flooring market. “We are confident that even with a market downturn the hardwood flooring industry will continue to thrive,” Jim Morando of Harris-Tarkett said. Harris-Tarkett believes that a high-end category like hardwood will sustain drastic market fluctuations. “Based on current orders and projections for the year, we expect to again post double-digit sales increases.”

Imported products
For TriPac, the major issues in 2000 not only centered on falling consumer confidence, rising raw material costs and higher energy prices but also on increased foreign and local competition. “All these things have negatively impacted our margins,” Riddick said. “They have affected lumber availability and logs, and contributed to volume and pricing pressures.” Harris-Tarkett’s Morando believes the proliferation of manufacturers, both in the US and abroad, will not impact its strategy. “While some imported products, particularly in the engineered segment, may be priced below domestic products, we believe cheaper is not better,” he said. “Distributors and retailers who choose to market hardwood products based strictly on pricing may find that approach limits their long-term growth potential.”

High-tech products
Some hardwood manufacturers had reasons to be positive about business in 2000. Some even experienced double-digit increases, especially with respect to value-added, high-tech products. “In general, we saw significant acceptance among all factory-finished products, including both engineered and solid,” Riddick reports in Floor Covering Weekly. “The overall factory-finished market continues to grow simply because we are now offering more choices than ever before. More colors, styles, designs and even wood species. Plus, the incredible finish warranties now offered (up to 25 years on some products) on factory-finished flooring has a tremendous effect on both builders and consumers.” At Harris-Tarkett, Morando estimates the company’s advancements, acquisitions and product-line extensions helped it grow at a faster rate than the category as a whole.

(Hearst Business Publishing /Floor Covering Weekly).

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Mixed feelings in US about future of laminate

Laminate flooring is doing well in the United States. Figures presented by the North American Laminate Flooring Association (NALFA) show that at the conclusion of 2000 roughly 470 million square feet of laminate flooring was sold at an estimated $750 million. An 18.5-percent increase compared to 1999’s $632 million — a growth rate nearly three times that of the resilient industry and twice that of carpet or ceramic. In spite of these promising figures, some people have mixed feelings about the future of laminate in the US.

Estimates from the trademagazine Floorcovering Weekly (FCW) show that laminate growth rates have dropped on a yearly basis. That translates into a decline in average wholesale prices. The U.S. market won’t soon see relief from margin erosion, although the growth rates will likely continue to decline as the category reaches normalization.
“Many critical points — glueless technology, noise reduction and water resistance — are not that obvious to the American buyer yet,” says Annika Windmoeller, marketing manager for Witex. “These issues, which have been discussed in Europe, have not yet fully arisen in the U.S.”
Not everyone shares this opinion. Surfaces 2001 showed that the American market is growing not only in volume and the number of producers, but in innovative introductions as well. As little as six months ago industry experts predicted that overcapacity and the resulting decrease in both production costs and margins would scare foreign manufacturers away from investing on American shores. But a number of overseas manufacturers have recently announced plans to begin domestic production; others have already begun. Alberto Tavares, managing director for Poliface: “If you want to sell to the U.S. you have to be in the U.S.”

“We have seen more innovation in the past five years than we have during the previous 15 years when the product was being introduced,” said John Himes, Mannington general marketing manager, laminate and wood. “If you utilize technology effectively there are a lot of opportunities to produce better aesthetics and performance as well as drive consumers into stores.”
FCW mentions that the emphasis on innovation is also spurring other advancements. “For instance, more manufacturers are crossing over from high-pressure laminate (HPL) to direct-pressure (DPL). While much is happening at the core and surface of laminate boards, most of the attention this year focused on their sides — namely their installation systems. Alloc’s and Unilin’s ongoing litigation over patent infringement concerning glueless, locking technologies, for example, unleashed an array of alternative methods for supplying a growing DIY market.” Though presently occupying less than 10 percent of the U.S. laminate market, many industry executives see great potential for glueless boards and predict they could come in line with Europe, where glueless represents 80 percent of the market. “Glueless boards are going to do a lot for the industry in terms of profits,” says George Gehringer, general manager of design for Armstrong. “With glueless boards everyone makes money: manufacturers, distributors, retailers and even installers.”

A price war is going on. But industry experts think that if you closely study the market, it would reveal that laminate flooring is far from a commodity item. David Hartman, president of Formica Flooring: “If this was a commodity marketplace, producers with the lowest prices would have the greatest share. But it seems the producers that have the lowest prices have all scrambled to pick up the crumbs.” Bill Dearing, president of NALFA, agrees. “We are seeing tremendous innovation concerning laminate’s core and surface. Everybody is doing something to make the product better. You don’t do that to a commodity product. Also, we wouldn’t see foreign companies willing to invest here if it were a commodity.”

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International shortage of qualified installation labour

The shortage of qualified installation labour is a quite common problem in the European countries. In some of them, for example the Netherlands or Germany, people involved are trying hard to reduce the problem by creating a schooling system that responds to the demand of the flooring business. In Canada and the United States the flooring trade has to deal with the same problems. Recently the magazine Floor Covering Installer even called it an ‘industry-wide crisis’ which has led to a record number of failed installations. During the fair Surfaces 2001 the United Brotherhood of Carpenters therefore unveiled its INSTALL identity, in an effort to rebrand and showcase the UBC's floor covering installation training program and its graduates.

Under the trademarked brand name of INSTALL (International Standards and Training Alliance), the floorcovering divisi on of the UBC in the United States and Canada has launched an aggressive new marketing campaign intent on raising awareness of the Joint Apprenticeship Training Committee (JATC) training program, as well as of the recent changes in the UBC.

One step in the new program was the opening of the 178,000-square-foot "Train the Trainers" facility in Las Vegas during Surfaces. The facility provides a comprehensive atmosphere for intensive learning and upgrading skills.
Floor Covering Installer explains that INSTALL is an intensive four-year program that includes close supervisio n of each trainee by a journeyman flooring mechanic, with projects in both simulated and real-world working environments, according to the UBC.

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Pergo and Berry strengthen their position in the United States

Photo: Armstrong Swiftlock laminate, Arlington Oak Antique.

In an earlier newsitem we stated that the EPLF (Association of European Producers of Laminate Flooring) nourished high hopes regarding the North American market the coming years, which with only 39 million sq.m of laminate flooring, is by far not yet as developed as the European market. 'North America and the Asian-Pacific region alike show an enormous growth potential. Some of the EPLF members have met this challenge by building local production plants. EPLF-estimates for 2000 for these regions indicate double-digit growth rates for the total market and likewise for the EPLF members.'

Recent developments prove this point to be true. Armstrong World Industries has established a long-term distribution agreement with Belgian flooring manufacturer The Berry Group to market locking laminate flooring in North America. The agreement allows Armstrong to sell and market specific products to specific market segments under the U.S. Patents of Valinge Aluminium, of Viken, Sweden. Armstrong has introduced its specific locking system to flooring retailers at the Surfaces 2001 trade show in Las Vegas. The product line will become available in the first quarter of 2001.

In the meantime Pergo has decided to invest approximately USD 27 million in its plant in Garner, North Carolina (USA). 'As part of the ongoing technology shift in the laminate flooring industry,' the Swedish laminate manufacturer explains in a pressreport. The investment includes new production equipment and upgrades of existing production capacity. Pergo expects the investment to increase the plant's flexibility with respect to the manufacturing of various products, such as directly laminated glue-free flooring. The investment also includes expansion of the current plant by 4,500 square meters and a new 17,000 square meter distribution center immediately adjacent to the main plant.

The investments are to be implemented gradually and are scheduled for completion at the beginning of 2002. The current center, which is situated about 20 kilometers from the plant, will soon have insufficient capacity and is therefore being replaced by the new center. This will accelerate the handling of finished products and reduce transport costs.
Pergo, which is part of the Perstorp Group, has annual sales of SEK 3.7 billion, with 1,100 employees, including about 300 in the US. Perstorp AB's Board of Directors intends to spin off Pergo to shareholders and list the company on the stock exchange during 2001.

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How to sell wooden floors

In the United Kingdom the appeal of parquet has waned somewhat. The internet site Retailfloors.net recently dedicated an article to the problems and possibilities concerning wooden floors. Most of Retailfloors.net'ss recommendations to the British retailer are probably valid in the rest of Europe as well.

Producers of laminated flooring and vinyl tile manufacturers are becoming very skillful in producing imitations of wooden floors that look like and feel like 'the grandfather of flooring', as Retailfloors.net puts it. 'Wood flooring manufacturers and suppliers are fighting a hard battle by extending the variety of styles and grades to the consumer, and thereby increase the desirability and the value of the product. Maintaining the high quality image of wood and making sure there isn't the price erosion that has become characteristic of the laminate and carpet market, is the key to winning this battle. Ultimately though, it is the retailer that manufacturers and suppliers depend upon to make the most out of the marketing opportunities.'

Myths
The retailer will first have to deal with a number of myths concerning wooden floors. An increasing mobility, it is suggested, makes an investment in solid wood flooring undesirable. But as anyone knows in real estate business, this kind of floor adds value to the property. Laminates are supposedly more durable and scratch resistant. Counter argument: parquet is resilient, easy to clean, easy to polish or sandpaper, relatively cheap, can be easily recycled, and is a warm, 'natural' product. Research in the shop by Junckers though, show that these are not the points that retailers are stressing. Consumers buy products because of colour and shade, Junckers found out, quality seems to be irrelevant: 'Sales advisors stress these two factors rather than differentiating between solid hardwood flooring, veneers and laminates'.

Variety
The retailer/adviser will have to keep pace with all the different kind of wood grades, wood types, finishes, plank sizes, fitting mechanisms, sound reducing underlays, etcetera that appear on the market. Glue-free installation systems for multilayer parquet is one important development, the shift towards plank products another. The wider variety of wooden floors on the market has also stimulated manufacturers of accessories to extend their product ranges. At the same time improved finishes with enhanced performance protect wood flooring better from wear, dirt and moisture while giving the wood an attractive colour and sheen. Colouring techniques are used to emphasise the grain and lure the potential consumer. Heat treatment not only results in a broader range of shades, but also makes the surface harder and more resistant. Floors with an 'aged' appearance are becoming more and more popular.

Pre-finished
Installing a wooden floor is complicated, takes to much time and is therefore expensive, some consumers complain. However, the increased availability of pre-finished floors reduces the installation time and makes things a lot less 'messy'. Retailfoors.net concludes that manufacturers are doing the utmost to respond to changing market demands in time. But it is up to the retailer to make the customer aware of the benefits of hardwood flooring and the extended range available. For instance, by explaining different grades, kinds of wood, surface finishes, etcetera. Producers can help by explaining details in brochures and so on, but the retailer is ultimately responsible for passing on this information.

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Nicholas Price stated on the internetsite www.floordata.com: 'The hardwood flooring market is a growing but small and specialised part of the total floorcoverings market. The establishment of Hardwood Flooring Supplies as an autonomous specialist distributor will allow its management team to focus on providing the very highest standards of product and service to this sector.' Price calls the involvement of Boen Parkett as a real bonus. 'Their shareholding reflects their commitment to both the business itself and the UK market'.
Nicholas Price and his family now own approximately 50% of the business, with Boen Parkett and Edward Ellis, Boen Parkett's sales and marketing director, owning the other half. Talking to the British magazine Retail Floors, Nicholas Price said that the hardwood flooring market had doubled in size over the last three to four years and that he estimated that it could double again to peak at a share of 9% to 10% of the total UK floorcoverings market. Hardwood Flooring Supplies serves every aspect of the UK hardwood market, stocking over 1000 lines spanning from veneer to solid wood floor.

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World record attempt in parquet floor laying

At 11.00 a.m. on sunday the 14th of januari 2001, DOMOTEX, the international trade fair for floor coverings, will host a world record attempt in parquet floor laying at Stand A26 in Hall 8. The participating floor layers, all members of the central German trade association representing their craft, are aiming to lay 15 square metres of parquet block flooring in less than four minutes.

The flooring will be laid to form an octagon, symbolizing both the logo of the central trade association and the German tradition of craftsmanship. The aim is to secure an entry in the Guinness Book of Records. Deutsche Messe AG of Hannover is sponsoring the event, with additional backing from business and industry. The record attempt is targeted primarily at flooring contractors and professional tradesmen.
Under the leadership of Heinz Brehm, who oversees training for flooring apprentices throughout Germany, a team of twelve apprentice floor layers at various stages of their training - four in their first year and four each in their second and third years - together with four qualified floor layers will attempt to break the present world record. Working against the clock they will be laying a mix of light and dark wooden blocks in a decorative pattern on the floor of the hall.

Photo: Deutsche Messe AG

Dieter Große, head of the German Guild of Parquet Flooring Layers, is keen to encourage more young people to take up the trade that he loves. He is confident that the time of four minutes can be beaten. But more important than an entry in the record books is the initiative itself and what it represents. 'At a time when the younger generation is less attracted to the skilled trades', explains Große, 'we need to blow our own trumpet more than we have in the past.' He is counting on the world record attempt to generate some favourable publicity and boost the image of the profession in general. As the leading annual event and exhibition showcase for the flooring industry, DOMOTEX 2001, which takes place from 13 to 16 January in Hannover, is the ideal platform for such a world record attempt.

In the meantime the Deutsche Messe is very positive about their 13th DOMOTEX. The prospects are looking extremely good. 'The leading international trade fair for floor coverings has broken all the records for exhibitor and stand bookings since the event was first launched backed in 1989.' The main growth area according to Deutsche Messe AG of Hannover has been in foreign exhibitor bookings. The four-day event is expected to attract 1075 exhibitors (2000: 1 070), including 735 from abroad (up from 714 in 2000). On a total display area of more than 94 000 m2 (2000: 90 614 m2), spread over twelve exhibition halls, visitors can view a huge array of hand-made carpets, machine-made woven carpets, textile and flexible floor coverings, parquet and laminate flooring, fibres and yarns, application, care and installation technology, product presentations and a wide range of services.

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Internationalization of the wooden flooring trade?
Possible? Desirable? Necessary? Three times Yes!

The unification of Europe will not only lead to borders and national currencies disappearing in favour of the Euro. Many barriers on imports and exports will disappear as well and therefore make it possible for a citizen of one of the EU-countries to work in any member state of the European Union. It will take some time until all legislation will be effective and completely harmonized, yet everybody will agree that the process is irreversible.

Furthermore, internationalization and enlargement of scale are crucial developments that also affect the parquet and wooden flooring trade. A lot of company take overs are taking place. Nowadays it could well happen that an employee of a Dutch parquet manufacturer will have a new German boss tomorrow, or even maybe an American next month. These developments, as is allways the case, have advantages like reductions of cost and increased sales but also disadvantages like uncertainty, indistinctness and misunderstanding.

Many wholesalers and manufacturers obtain their raw materials, semi-manufactured articles or ready made products from all over the world. Some succeed in doing so, while others keep muddling through. Cultural differences had to be overcome, national legislation examined, foreign currencies handled, etcetera. Let's face it, our line of business could hardly be called internationally orientated, a mere fifteen years ago. Nowadays in the age of computers everything moves and accelerates. Everything and everybody is available to everybody and everything. A highly interesting development for sure, sometimes even adventurous, but it could also contain a certain risk. The phase of gathering information and of taking one's bearings that necessarily preceeds 'doing business' is sometimes skipped due to enthusiasm. People often want too much too soon.

Wholesalers and manufacturers, at least the majority of them, have left this process behind them and got settled internationally. Schools have made a start in international orientation and exchanges. In the shape of the International Parquet Competition, joined by more and more countries, we try to learn from each other, learn to know what our differences are, understand cultures. This for instance has resulted in a French request in Brussels for funds to set up a European Parquet School. This request would certainly deserve the support from both wholesalers and manufacturers. They in effect have an interest in these matters too.

For in the retail trade too internationalization seizes the opportunity. Belgians and Germans are laying wooden floors in the Netherlands. Poles and Italians would like to. The Dutch operate in Belgium, England, France and Germany.

But, unfamiliarity with each other's laying procedures, standards, legislation, languages, terms of payment, etcetera can lead to big problems. Of course the retailer could appeal to the wholesaler for information. But it would be better if schooling existed that would provide retailer and layer with information and practice.

In short... Internationalization?
A wholehearted affirmative!
But... well-considered and well prepared.

Ad van Mierlo, responsible for the Dutch Parquet Scholing at the Institute Gildevaart in the Netherlands.

A. van Mierlo

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European opposition against Dutch plan to label woodproducts

It will be forbidden to trade in wood or products derived from wood in the Netherlands if these products are not labeled with a green sticker for wood that was produced according to certain guarantees of 'durability' or a red sticker for wood that originates from a 'non-durable' forest. If the bill proposed by Member of Parliament Marijke Vos of the Green Left party is passed by the Dutch Senate, timbermerchants, producers of wooden flooring and so on, could be in serious problems if the bill becomes law on the 1st of january 2002.

Free trade
Experts say these measures to counter disforestation are highly complex to realise and particularly difficult to implement. Besides that, Europe as a whole has criticized the plan for being contrary to the free trade regulations of the European Union. On a national level the Dutch SBH (Forest and Wood Foundation) calls the proposed regulations ineffective and warned against the burden of very high costs due to the administrative and logistical problems facing the companies involved. Chairman Peter Eerkens of the Alliance of Parquet Producers and Importers declares he is alarmed by the proposal.

Last october Secretary-General O'Sullivan of the European Commission, backed by several member countries of the EU, wrote a letter to the Dutch government warning them not to pass the Marijke Vos bill. The Commission thinks compulsory labelling could hinder the free trade of goods. Besides that, it claims Holland is not qualified to stop the imports of products that do not directly affect its own natural environment. The Commission invites the Dutch lawmakers to come to Brussels and talk things over, and to react upon the severe criticism of parties involved inside and outside the EU.

FEP
The European Federation of the Parquet Industry, FEP, also opposes the Dutch plans. FEP-secretary Filip De Jaeger fears that the bill will erect trade barriers. 'It's all about very practical problems. For instance, a producer will not know beforehand which part of his production will go to the Netherlands and hence which part will have to be labeled. We support the CEI Bois in their efforts to halt the Dutch plans. The European Commission has already commented on the bill and I hope the Dutch government wil take these reactions seriously and that the Senate will let reason prevail.'

What will happen next is not yet certain. The negative remarks from Brussels seem to have reached the Dutch Senate, critical questions were asked last november in a hearing and Marijke Vos was told go to Brussels and meet the European Commission, probably before Christmas. The departments involved in The Hague and the cabinet seem to favour the proposals, backed by public opinion. What the effect of a strong negative advice from Brussels will be on the Dutch decision is not yet transparent.

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The European parquet market in 2000: sustained growth

The European Federation of the Parquet Industry, FEP, stated recently that the developments of the European parquet market this year so far indicate towards increasing demand and production. 'This is most positive, as it confirms the position of parquet in the European flooring market and indicates increasing market shares.'

The FEP has remarked however that extra and unexpected pressure has come for companies in the Eurozone who have to purchase raw material for the production of parquet in non-euro countries. Top layer material from North-America has e.g. become quite expensive. In addition, labour costs across Europe are on the rise as well. Unfortunately, the current market situation does not leave much room for balancing this out. On the other hand, European producers may profit from this situation and try to export bigger volumes outside the EU.

European Standardization
In September 2000 an important breakthrough was realized in the European standardization activities for parquet and wood flooring.
At a meeting of the responsible CEN (European Committee for Standardization) working group green light was given for the formal vote on 6 draft European standards for parquet flooring:

• prEN 13226 'Wood flooring — Solid element with grooves and/or tongues'
• prEN 13227 'Wood flooring — Solid lamparquet products'
• prEN 13228 'Wood flooring — Solid wood overlay flooring including blocks with an interlocking system'
• prEN 13488 'Wood and parquet flooring — Mosaic parquet'
• prEN 13489 'Wood and parquet flooring — Multilayer parquet'
• prEN 13629 'Wood flooring — Solid pre-assembled hardwood boards'
The formal vote, expected to be launched in the 1st half of 2001 pending approval by the CEN Technical Committee 175, is the last phase in the adoption of any European Standard. Once ratified, the European text will replace any conflictual documents at national level (in the CEN countries).
Member companies and the secretariat of the European Federation of the Parquet Industry FEP have been playing an active role in the finalisation of the said documents. The FEP states that it will step up efforts in order to have the harmonized European standard for parquet, which will form the basis for the future CE-marking as prescribed by the Construction Products Directive, completed as soon as possible.

For more information on these subjects contact Filip De Jaeger (fax +32 2 5562595, email: euro.wood.fed@skynet.be).

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EPLF expects growth in North America and the Asian-Pacific region

The EPLF (Association of European Producers of Laminate Flooring) has for the first time produced a set of complete market data, collating the sales figures of laminate flooring sold per country, sourcing the data from all European EPLF member plants. These figures are satisfying: the EPLF members have sold 132 million sq.m of laminate flooring according to the statistics throughout the world in 1999, a marketshare of 59,3 percent.

The world total contains 222.4 million sq.m of laminate flooring. Europe is traditionally the strongest market for the EPLF members: 103.4 million sq.m of the laminate flooring produced in Europe are sold into the European market giving the EPLF a market share of 77.1%. Strong showing also in the North American market, which, with only 39 million sq.m, is by far not yet as developed as the European market. From these 39 million sq.m however 43.9% are sold by EPLF members ( = 17.1 million sq.m).
Exports to the Asian and Pacific region are still in their infancy. The EPLF-figures show us that only 8.4 million sq.m sold by EPLF members into a market totalling 46 million sq.m constitute a market share of 18.5% in 1999. For all other regions of the world sales of 2.9 million sq.m of laminate flooring are registered, which means a market share of 79.8%.
North America and the Asian-Pacific region alike show an enormous growth potential. Some of the EPLF members have met this challenge by building local production plants. EPLF-estimates for 2000 for these regions indicate double-digit growth rates for the total market and likewise for the EPLF members.

For further information contact by e-mail: info@eplf.com

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