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Vestar Capital Partners to acquire Nybron

Vestar Capital Partners (USA) has signed a definitive agreement to acquire Switzerland-based Nybron Flooring International from HIAG and Nordic Capital Funds.

Based in Jona, Switzerland, Nybron Flooring International claims to be the leading European producer of wood flooring and the world market leader in pre-finished engineered wood flooring products. Nybron’s business is comprised of Bauwerk of Switzerland, Kährs of Sweden and Marty of France. HIAG and Nordic Capital Funds created Nybron in 2000 through the simultaneous acquisition and merger between Kährs, Bauwerk and Marty. Today, Nybron conducts its business worldwide with 11 production facilities in Switzerland, Austria, France, Sweden and Norway and is selling its products in more than 40 countries.

The company generates annual revenues in excess of Euro 400 million and has over 2,600 employees worldwide. Robert Rosner, President of Vestar Capital Partners Europe: “Vestar is entering the capital of Nybron with a long term investment horizon and will provide Stefan Jacobsson and his management team with substantial capital resources to back the company's growth plans including broad international expansion in markets such as the U.S. and selected complementary acquisitions.” The financial details of the acquisition, expected to close in January 2006, were not revealed.

Euparal/Nybron, December 2005

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Tarkett and Sonae form joint venture

Tarkett AG has concluded a joint venture agreement with Sonae Industria from Portugal to produce and sell laminate floorings in Western Europe, Africa, Asia and Oceania.

Tarkett’s main production center in Hanaskog

Each party will hold 50 per cent of the joint venture, which includes a Glunz-Sonae Industria panel production plant in Eiweiler (Germany), to be expanded to produce laminate floorings. The new enterprise is subject to the clearance from the European Commission pursuant merger control.

The joint venture concluded between Tarkett and Egger in 2000 concerning the production of laminate floors in the Egger plant of Wismar (Germany) will be terminated on the 30th of April 2007. At this date Egger will take over all Tarkett shares in the joint venture and will continue the production by itself, Egger informs in a press release. Until that day the joint venture will be continued unchanged. After more than five years of cooperation Tarkett and Egger have mutually agreed that the strategies of both companies will develop differently in the future. Tarkett strives for further integration as a producer and plans to expand its production activities on a worldwide scale. Egger clearly declares to stay on the European market and will not make any investments outside of Europe in the medium-term, but will restructure and further extend the laminate flooring production in the sites of St. Johann, Brilon and Wismar.

Another strategic alliance Tarkett is involved in, is the so called ‘new flooring generation’, an alliance of Knauf Integral, Resopal, Tarkett and Witex. The group claims it will present a new generation of products for the flooring market at Domotex 2006: ceraclic. Finally, concerning parquet flooring, Tarkett recently announced it started production in the new plant in Backa Palanka (Serbia). Production volume there is expected to be 1.2 million m2 next year, reaching 2.2 million in 2008, with destinations in Eastern Europe. In Poznan (Poland) Tarkett plans to open yet another factory. Tarkett’s factory for prefinished parquet in Broby (Sweden) will be closed, but substantial investments will be directed towards the main production center in Hanaskog (Sweden).

Euparal/Tarkett/Egger/Sonae Industria, November-December 2005


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‘Producers from China already booked a quarter of Hall 9’

Several German manufacturers not present in Hannover

Several parquet and laminate flooring manufacturers will not take part in the Domotex 2006 fair in Hannover. The major reason of their discontent is that organizer Deutsche Messe AG does not fulfill exhibitors’ wishes, explains website www.timber-exchange.com.

Companies that exhibit successively in Munich (Bau) and Hannover are especially dissatisfied with the stand locations offered by the organizer. This was quoted by Egger and Kaindl as the main reason. Be that as it may, more and more companies seem to prefer in-house exhibitions. Meister-Leisten will organize an in-house fair in January, thus canceling its Domotex participation, following the example set by Parador several years ago. Kronospan is missing from the laminate flooring producers’ list of exhibitors. Unilin/Quick-Step reduced the size of its stand, wishing as well to invite visitors to its exhibiting area at the Belgian production plant, according to www.timber-exchange.com. Gründorf is not happy with Hannover and will organize a meeting for its clients elsewhere in Germany in March or April. Also, Kährs cancelled Domotex.

Messe Hannover reacts by saying it received 200 applications for the parquet and laminate flooring sections: well above the 2005 figure (189). The exhibiting area dedicated to parquet and laminate flooring is 12.700 m2 (2004: 12.550 m2). Furher, the organizers point out that several big players like Faus from Spain or Moonloc from Turkey will be present with large stands. Last but not least, producers of wooden flooring from China already booked a quarter of Hall 9.

Euparal/IHB, November 2005

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Pergo settles lawsuit with Neuhofer

Neuhofer Holz GmbH, one of Europe’s largest manufacturers of molding products, withdraws product from the U.S. market in the face of Pergo’s patent infringement suit.

The legal action, initiated earlier this year, pending in District Court in North Carolina, against Neuhofer and its U.S. subsidiary, FN Profile, Inc. will be withdrawn. Pergo alleged that Neuhofer’s product infringed Pergo’s patents protecting, amongst other things, Pergo’s innovative SimpleSolutions(TM) Four-in-One Molding product. Pergo’s lawsuit with Faus, covering the same type of products and the same patents continues, as previously announced by Pergo.

Euparal/Pergo, November 2005

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Unilin files new lawsuits against competitors

On the 16th of November 2005 Unilin has issued proceedings against the French company Roysol for infringement of Unilin’s patent EP 1 024 234 before the ‘Tribunal de Grande Instance’ in Paris (France).

Unilin claims that all laminate flooring panels of Roysol infringe this patent. Unilin filed on the 18th of October 2005 already a similar lawsuit against Roysol and its U.K. distributor before the Patent County Court in London (U.K.). On the 18th of November 2005, Unilin has also filed a patent infringement suit against the Classen group. Unilin is convinced that all glueless flooring panels of Classen are infringing Unilin’s patents EP 1 026 341 and EP 1223 267.
The action has been filed before the court in Düsseldorf (Germany). Unilin claims back compensations for sales by Classen of the alleged infringing products as of the 5th of July 2001. On the 18th of November 2005, Unilin has issued proceedings ‘down under’ against Shun Li De, an Australian importer and reseller of Chinese laminate and one week later Unilin filed a new Australian patent action against the Australian Huili Group and against the retail group Gremos Holding.

Euparal/Unilin, November 2005

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DOMOTEX Middle East in Dubai

The new event DOMOTEX Middle East will take place for the first time on 28 - 30 May 2006 in Dubai.

It will be the first specialist trade show for carpets and floor coverings in the region. The venue is the Dubai International Convention and Exhibition Centre at the Dubai World Trade Center. Approx. 300 exhibitors are expected at the premiere show, which will embrace a net display area of around 12,000 sqm.

Euparal/Domotex, October 2005

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EPLF asks end users what they think of laminate flooring

Laminate flooring is perceived as aesthetic, tough, easy to clean, simple to install and comparatively durable, and it is seen to offer a good price/performance ratio.

At the start of 2005, EPLF asked the Düsseldorf Market Research Institute, to conduct a market study to investigate the purchasing habits of laminate flooring end users. The results confirm that end users have a positive image of the product, claims EPLF. “Sometimes end users criticize noise which maybe generated when walking across the floor and also the environmental impact (whether or not this criticism is justified). In actual fact, there is little room for improvement. Laminate flooring is a well-engineered, environmentally-friendly product, but the industry association will have to take these issues into consideration when they formulate their future communications strategy.”

As a general rule, persons interested in purchasing flooring are willing to consider all of the alternatives. For persons who have purchased or are planning to purchase laminate flooring, this product is naturally at the top of the list followed by tiles and carpets. In the group that decided not to buy laminate flooring, parquet flooring is the most popular choice followed again by tiles and carpets, and solid flooring also appeared in the rankings with this group. Aesthetics, durability, environmental impact and ease of cleaning are at the top of the wish list followed by hygiene, noise suppression and secure footing. The market study shows that quality or environmental marks, for example the ‘CELQ mark’ (Certified European Laminate Quality) or the German ‘Blue Angel’ mark can promote consumer confidence and have a positive influence on the purchase decision. Consumers are aware of quality differences in the laminate flooring market, and they understand that you have to pay more for quality. This was not the case ten years ago, according to EPLF. “The new consumer quality awareness will help support market pricing strategies, and this in turn will benefit the suppliers and distributors.”

Euparal/EPLF, October 2005

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Domotex Asia/Chinafloor almost fully booked

Organizers VNU Exhibitions Asia and Deutsche Messe know it for sure: Domotex Asia/Chinafloor 2006 will be the largest flooring show for wood and laminate flooring in the world.

The coming edition of Domotex Asia/Chinafloor will be held from March 28-30, 2006 in Shanghai. The 2005 show had an exhibition space of 46,000 m2, but for next year’s edition the organizers have recently enlarged the reservation to an area of 69,000 m2. Each of the four main segments of the exhibition has already shown strong growth. The wood and laminate section has shown the largest growth with all the major players having already booked their space, the organizers say. China is already the number one exporter of wood and laminate flooring to the U.S.A. The Krono Group will be strongly represented by Kronotex, Kronospan and Krono Beijing. Other international players like Berry, Robina and Unilin will exhibit at the show. Companies like Allsun, Chinafloors, DER Floor, Elegant Living, Order and Sihe have booked enlarged spaces for the coming edition. “Next year we expect to welcome over 30,000 flooring professionals of which over 5,000 will be from overseas. The growing importance of China and Asia in the flooring market will definitely be seen at the largest show for flooring in Asia,” says Wilbert Heijmans, Senior Project Manager of VNU Exhibitions Asia.

Euparal/VNU Exhibitions Asia, October 2005

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Pergo kitchen flooring

Pergo interim report first semester

Net sales for the period reached SEK 2,199 million, which is a 6% increase after adjustments for currency when compared to the same period last year. Sales rose on the North American market by 10% in local currency, due to an increase in net sales to the home center channel. In Europe, net sales adjusted for currency effects were unchanged for the period.

Net sales for Q3 reached SEK 769 million, which is a 10% rise after adjustments for currency effects. Q3 sales growth is due to the increase of net sales (+15%) to the home center channel in North America and to modestly increased sales (+2%) in Europe. The laminate flooring market in Europe remains highly competitive with a modest growth rate, Pergo explains. The sales trend for Pergo’s premium products there remains good, contributing strongly to maintained gross margins. Sales figures for mid-price segment products are still below expectation. The European improvement plan is progressing according to schedule, says Pergo. The objective of the plan is to realize annual savings of SEK 100 million in 2006. Within the framework of the plan, the European sales organization has been restructured to more effectively meet customers’ needs. Efficiency and productivity figures for the Trelleborg factory have already improved at the end of the quarter as a result of the improvement plan. Tony Sturrus, CEO Pergo: “We are increasing our customer relationship activities both in Europe and in North America. We have introduced a more customer-focused and efficient selling structure throughout Europe. Our main objectives for the Pergo group remain growth and improved profitability.”

Euparal/Pergo, October 2005

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US-Patent Office Completes Reexamination

On October 11, 2005, after an extensive reexamination of the original Välinge Innovation patent US 5 706 621, exclusively licensed to Berry (now part of the Beaulieu International Group), on mechanically locking laminate flooring systems, the United States Patent Office has issued a Notice of Allowance confirming the patentability of all of the original claims.

During the reexamination, the Patent Office confirmed the scope of several of the claims as not having any ‘play’ requirement. In addition, the Patent Office also granted several new claims that do not have a requirement for ‘play’. Several competitors of Berry have challenged the validity and scope of the original patent. One of those competitors requested that the U.S. Patent Office reexamine the patent in view of several prior art patents that were not originally considered at the time the patent was first granted, say Välinge and Berry.

Euparal/Välinge/Berry, October 2005

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Unilin’s patent actions update

On the 18th of October 2005 Unilin has filed a patent infringement suit against Roysol and its distributor Westco in the U.K. Unilin claims that all Roysol glueless products are infringing its EP 1 024 234 patent. The patent protects specific types of glueless floors. The case is filed before the London Patent County Court.

Also, in its decision dated the 29th of September 2005 the Landgericht Düsseldorf (Germany) has found that the Hamberger glueless products infringe this same patent. Hamberger (Haro) and Unilin have in the meantime engaged into what they call positive discussions to settle the law case and to enter into a license on Unilin’s patents that will allow Hamberger to continue the sales of the existing glueless joint system of Hamberger. The Hamberger case is the last remaining German case of a series of actions that was initiated by Unilin in May 2002 against Kronotex, E.F.P., Parador, Kronospan, Gründorf, Praktiker and Terhurne. All other cases have been terminated by means of a settlement.

In the USA, less than two months after the institution by the ITC of its investigation called ‘Certain laminated Floor panels’ already 19 of the 32 parties have chosen to drop out of the case, at the end of last month. The case has been introduced by Unilin who is seeking that the products that are imported by these companies can no longer be imported into the US. These products are allegedly infringing Unilin’s patent rights on the glueless joints. The case will move quickly forward, says Unilin, with a scheduled nine days trial in April next year. Once the Belgian producer obtains a favorable decision it will claim the damages it has incurred by the acts of each of the 32 defendants through separate proceedings in the district courts.

Euparal/Unilin, September-October 2005

Egger agrees to pay Armstrong 7 million dollar

The owner of Austrian flooring supplier EFP Floor Products, the Egger Verwaltungsgesellschaft, has agreed to pay nearly 7 million dollar to Armstrong World Industries to settle a pair of lengthy disputes.

According to an article in the Lancaster New Era, end of September, quoted by website Floordaily, Armstrong had retained EFP in 1999 as a source of laminate floors. But Armstrong soon canceled the deal, saying EFP supplied products that infringed on patents of other firms. Armstrong then asked the bankruptcy court to order EFP to compensate it for lost profits, business interruptions and certain direct costs. Separately, Armstrong also asked the court’s permission to recoup 2.5 million dollars it had paid EFP shortly before it entered bankruptcy, in so-called ‘preference’ payments. EFP opposed Armstrong’s effort to recover the payments and filed court papers alleging Armstrong had broken a follow-up deal signed in 2000. Armstrong took both EFP and its owner to arbitration in London before the International Chamber of Commerce, saying the 1999 pact called for disputes to be resolved that way. But Egger Verwaltungsgesellschaft challenged the chamber’s jurisdiction, saying it had not signed either the 1999 or 2000 deals.

A chamber arbitration tribunal agreed in January that it had no jurisdiction over Egger, posing the prospect that Armstrong would be liable for Egger’s 1.3 million dollar in attorney fees. But in July, the tribunal found that EFP had broken its 1999 pact with Armstrong, but that Armstrong had not broken the 2000 agreement. Before the tribunal held another hearing to set the damages, settlement talks were started, leading to an agreement last month. Under the settlement, Armstrong, EFP and Egger would dismiss all the arbitration proceedings and all the preference payment actions. Egger would pay Armstrong 5.25 million dollar as an arbitration settlement sum and 1.5 million dollar as a preference settlement sum. Armstrong will pay nearly 1.4 million dollars to its lawyers, according to the Lancaster New Era.

Euparal/Lancaster New Era, September 2005

Barlinek plans new factory outside Poland

Polish parquet producer Barlinek announced plans last month to build a new factory outside Poland. Possible sites seem to be located in Russia, the Ukraine, China or India. A Roumanian newspaper also mentions the acquisition of land in Arad/Roumania. Barlinek has yet to make final decisions.

To partly finance the new plant, Barlinek went to the stock market, on September 6th. Eight million new shares were issued, worth 13.5 million Euro. According to Barlinek, the demand on the part of institutional investors surpassed the forecast supply approximately ten fold. Furthermore, Floordaily recently quoted the Warsaw Business Journal reporting that Valinge is demanding that Barlinek purchases a license for a glueless system of linking wooden flooring panels, while Barlinek argues that these claims are unjustified. “We believe the technology applied by Barlinek is similar to our patented solutions,” said Valinge president Darko Pervan. Barlinek denies any wrongdoing, saying it is currently in the process of patenting its own technology. Significantly, the Swedish producer started protesting at a point in time when Barlinek was carrying out its IPO, according to Floordaily.

Euparal/Euwid/Floordaily, September 2005

Tarkett’s prefinished parquet production in Hanskog

Kronospan and Kronotex reach agreement with Unilin

The Kronospan group and the Kronotex group have reached an agreement with Flooring Industries (Unilin) to settle all infringement disputes by both groups of companies against the glueless patents of Flooring Industries.

In addition hereto Kronospan Technical Company and Flooring Industries have entered into a worldwide license agreement with Unilin for its patented glueless laminate technology. These agreements put an end to a substantial number of law cases which have been litigated the last five years. There are still ongoing disputes between Unilin and other manufacturers like Balterio, Berry, EPI, Hamberger, Sonae, Roysol, Akzenta and many Asian companies.

Unilin/Euparal, September 2005

Välinge expands its license base

The Berry Floor Group (now part of the Beaulieu International Group) has entered into worldwide license agreements with three of the largest laminate floor producers in the world: Kronospan and Kronotex from Germany and Kaindl Flooring from Austria.

As worldwide exclusive licensee on the basic technology for glue free laminate floors patented by Välinge Innovation, the Beaulieu International Group has now together with Välinge more than 30 licensees. Kronospan, Kronotex and Kaindl Flooring will withdraw from all pending opposition proceedings against the Välinge patents.

Columbia Flooring acquires MWI

Columbia Flooring (Danville, USA) recently announced that it had completed the acquisition of Malaysia Wood Industries Sdn. Bhd. (MWI), an engineered hardwood flooring manufacturing operation with two plants located in Sungai Petani, Malaysia and sales offices in the US, Europe and the Far East.

Columbia President David Wootton said: “We’ve been very effective in sourcing globally for products we sell in the US, but actually owning an offshore operation with a pre-established distribution network throughout Europe and the Far East will enable us to further expand our sales horizons by driving Columbia’s US-made product range into European and Asian markets where Malaysia Wood Industries is already known as a highly respected, efficient organization.”

The MWI plant was built 20 years ago and includes two separate production plants manufacturing prefinished engineered longstrip floating floors. The effective date of the purchase was July 21. Terms were not disclosed. Columbia Forest Products CEO Harry Demorest: “In addition to establishing our presence in Europe and the Far East, this acquisition will enable us to couple the advantage of low-cost manufacturing with our strong US sales and marketing expertise, thereby growing our standing in the global marketplace.”

Columbia Flooring/Euparal, August 2005

Pergo’s CEO Tony Sturrus

Pergo Q2 report January–June 2005

Net sales for the period reached SEK 1,430 million (2004: 1,417), which compared to the same period the previous year is a 4% increase after adjustments for currency effects. The profit after tax for the period was SEK 15 million (-222).

In the North American business unit, market sales rose 7% in local currency. In Europe, sales dropped 1%, adjusted for currency effects. Net sales for Q2 reached SEK 717 million (671), entailing a 9% increase when cleared for currency effects. The sales growth is primarily attributed to home centers in North America. In Europe, the sales development for Pergo’s in-house manufactured premium products remains good, contributing strongly to maintained gross margins. The performance of the new product portfolio in the midprice segment has been less successful than planned, according to Pergo.

Furthermore, an action plan to “improve profitability” in the European operation will be initiated. Pergo’s management has identified annualized savings of approximately SEK 100 million to be realized in 2006 within corporate overhead, improvement of productivity and the creation of global synergies in purchasing, Information Technology product development and design. Negotiations with the unions have started on reducing the Pergo staff by approximately 120 employees with most of the reductions occurring in Europe. CEO Tony Sturrus: “With the action plan in Europe, together with increased focus on global synergies and growth in North America, we believe our year-over-year result will show significant improvements going forward.”

Pergo/Euparal, August 2005

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Acquisition of Unilin by Mohawk

Mohawk Industries announced in July that it had entered into a definitive agreement to acquire laminate flooring producer Unilin Holding NV from Belgium. Unilin had annual sales of approximately euro 837 million and EBITDA margins in excess of 29%. The transaction is valued at approximately euro 2.2 billion.

Jeffrey S. Lorberbaum, Chairman and CEO of Mohawk, stated: “The acquisition of Unilin represents the second major step in diversifying into a total flooring company. (...) Unilin is a leader in high-end laminate with strong positions in both the U.S. and Europe. (...) Unilin brings to Mohawk a proven knowledge of the European flooring market and unique distribution capabilities through high-end specialty retailers. In addition, Unilin has a growing share of the U.S. market and is presently completing the expansion of a new flooring plant. Unilin is the only vertically integrated laminate producer in the U.S. with a modern HDF board plant in North Carolina. Our plan is to continue supporting the Quick-Step brand through the existing distribution structure and customer base. In addition, new brands and products will be introduced to meet the needs of the market. (...) Unilin controls and continues to develop significant patents for laminate manufacturing which generate royalty streams.”

Frans De Cock, Chairman of Unilin's Management Board: “Although we will not realize significant synergies in the first year, we believe that there exist many opportunities to improve the combined business including: accelerating the market penetration of Unilin’s products, leveraging Mohawk’s brands and distribution, leveraging Unilin’s U.S. production capability and providing an avenue of growth for Mohawk in Europe.”

Mohawk/Unilin/Euparal, July 2005

FEP statistics 2004

“Following the encouraging developments in 2003, the year 2004 has confirmed the expectancies and forecasts as regards the continuation of the favourable trend,” according to the European Federation of the Parquet Industry FEP.

The production in the ‘traditional’ FEP area increased by close to 13% to set a new record of over 74 mio m2. In adding the available figures from the ‘newer’ members of the federation, the total production now reaches over 91 mio m2, indicating a substantial growth of 12,48% in the Eastern European area as well. The origin of the positive result lies primarily in the striking production rise in Sweden and Poland as well as in Spain and Austria, undoubtedly as a result of the activation of new production facilities, according to FEP.

According to the available statistical data, total consumption in the FEP territory rose by another 5,62% and now amounts to 88.9 mio m2. Austria and Sweden are here again the forerunners, with increases of 22,96% and 22,45% respectively. A substantial growth was also recorded in Switzerland, France and Spain, whereas the Dutch market still remains problematic illustrated by a decline in consumption of 8,57% originating a worrisome economic situation.

During 2004, the share of multilayer production again increased by one percentage point in comparison with 2003, making it by far the most important product category with 79% of the total figure. Solid could retain and even slightly improve its position to now 15%, whereas both lamparquet and mosaic have again lost ground (-1% in both cases), whereby the remaining share of mosaic is becoming increasingly concerning. A quite similar repartition of the production is also observed in the ‘new’ countries.

FEP/Euparal, June 2005

EPLF widens its scope to include direct-printed surfaces

The EPLF (European Producers of Laminate Flooring) has widened its scope by admitting companies to membership with expertise in the direct printing of flooring surfaces. This decision was made at the May meeting of members which took place at Parador in Coesfeld (Germany).

The difference between laminate flooring with a direct-printed surface and other laminates lies in the fact that the main (structural) board has the grain pattern or other design printed directly on to this, which is then lacquered. Other floors have the decorative (printed) layer over the main laminate. The experience of this deep, textured grain printing has been gained over a substantial period in the furniture industry, where the printed panels are generally subject to lower levels of stress. Following significantly improved machining technology and lacquer durability, the techniques of direct printing can today be applied effectively in flooring. EPLF: "The association's view is that this innovative technology applied to flooring, represents a valuable enlargement of the previous applications. The EPLF believes that consumers will readily adopt these products and that direct printed flooring will form a significant product segment within the laminate flooring market."Within the EPLF and its surrounding there exists a number of companies who have already adapted this technology or who are interested in association membership with this type of product, according to a press release.

EPLF/Euparal, June 2005

License agreement Unilin and Finsa

Finsa has entered into a license agreement with Unilin, which will allow Finsa to have access to Unilin's glueless flooring technology.

Finsa is one of the leading Spanish manufacturers of laminate flooring. Unilin: "This agreement settles in an amicable way the past and allows Finsa to offer products with superior joints."

Unilin/Euparal, June 2006

Beaulieu-group from Belgium plans reunion

Various members of the Belgian De Clerck family have signed a statement of intent and are currently conducting negotiations on setting up a new joint industry group.

The parties sitting around the table are Stephan Colle (Beaulieu Kruishoutem), Dominiek De Clerck (Ter Lembeek International), Francis De Clerck (IDEAL Group), Roger De Clerck (Beaulieu Kunststoffen) and also Luc De Clerck (Berry Floor Group). The family is seeking to lead the way in making the first step in the imperative consolidation of the carpet industry in Europe. In 1991 Roger De Clerck, father of six children, divided his Beaulieu-group into six separate parts. Since then, the Berry Floor Group, to a large extent, made the transition from 'textiles'to 'wood'.

Euparal/Belga, June 2005

Egger in St Johann

Pergo takes actions against Neuhofer

Pergo has taken another step to protect its patent rights and initiated an action for patent infringement against FN Profile and Neuhofer Holz in the US District Court for the Middle District of North Carolina.

On the left Pergo's system, on the right Neuhofer's

The patents relate to Pergo's recently launched Four-In-One Moldings technology. Pergo's molding system is marketed under the trademark Simple Solutions. The complaint alleges that the FN Profile and Neuhofer Holz products sold under the trademark FN One4All infringe the patents. The complaint requests a preliminary and permanent injunction and requests damages and costs. Earlier, Pergo has commenced a similar suit against the Faus Group of companies.

Euparal/Pergo, May 2005

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Germany: bigger market share for parquet

German manufacturers have produced approximately 4.8% more parquet flooring in the year 2004, according to their professional association VDP. Production volume was raised last year from 10.4 tot 10.9 million square meters.

The majority consists of multi layered products, increasing their already dominant position from 8.4 to 9.8 million square meters. Consumption of parquet flooring grew from 19.7 to 20.2 million square meters, on an overall stagnating German flooring market. Consumption increased little over 2.5%. Multi layered floors reached a consumption level of 16.7 million square meters (2003: 13.7 million). The association also observes that suppliers of wooden flooring, who have to compete on a stagnating flooring market, increasingly react to the pressure on prices by aiming at niches in the market, with special products as for instance exceptional formats, new wood species and innovative surface treatments.

VDP/Euparal, May 2005

Annual report 2004 Junckers

The sales of flooring fell by 17% compared to 2003, strongly influenced by the suspension of payments, which, as stated by Junckers, for instance made it difficult to conclude sales contracts of long duration. At the same time, the order intake for projects was affected.

Junckers in Køge

Especially the Danish market had decreasing sales corresponding to a fall of 30%, but also large markets like Great Britain and Spain saw a considerable decline. In the USA, sales increased by 9% in 2004. In 2004, sales of lacquers and oils fell by 10%; the major part was sold in Denmark. In general, the market for lacquers and oils remained unchanged last year. Both 2003 and 2004 are influenced by special items as a consequence of the reconstruction of the Company. In 2003, write-downs of fixed assets by DKK 414 million are recognised, and in 2004, items of a special nature amounting to DKK 171 million are recognised. It is difficult to compare the two financial years because of these special items, according to Junckers' management. The profit for the year from the continued activities amounts to DKK 1,756 million and lives up to the previously announced expectation for a 'small, positive result'. The revenue fell by 17% to DKK 676 million distributed by 16% on flooring, 13% on lacquers and oils, and 27% on other products. The substantial fall for other products is, for instance, due to the phase-out of the worktop production. The general fall is primarily related to the Danish market. The pre-tax profit, DKK 172 million, is strongly influenced by a number of non-recurring items. Items of a special nature totalling DKK 171 million are recognised in the income statement, as mentioned above. At the end of 2004, the total interestbearing debt was DKK 299 million, a reduction of DKK 293 million.

Junckers/Euparal, May 2005

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Göran Bernhoff

Pergo: Bernhoff replaced by Sturrus

Göran Bernhoff resigned this month from his position as President and CEO of Pergo AB. Anthony Sturrus is his successor.

Tony Sturrus, CEO Pergo

“During my time as CEO of Pergo, the Group Management Team together with the Board, have drawn up a strategy for increased profitability and growth in the company. We have now carried out a major part of this program and see that we are well on our way.
However, over the past few weeks it has been announced in the media that the new shareholders, with a significant influence in the company, want to reevaluate this direction of the business. I therefore find it natural not to stand in the way of such a re-orientation, as I would be opposed to such a scheme,” states Göran Bernhoff. At the same time Diane Tate resigned from her position as Sr VP Technology and IP. Only a few days later Tony Sturrus was appointed by the Board of Directors as new CEO and President of the company. Tony Sturrus presently holds the position as Pergo’s Senior Vice President, Region North America, a position he will keep. The Board of Directors has further appointed Staffan Söderqvist as Executive Vice President. Staffan Söderqvist will also continue to hold the position as CFO of the Pergo Group. Sturrus: “We will continue to work according to the strategy to develop Pergo from a purely laminate flooring company to a flooring company.” With regards to rumours that the head quarter of Pergo might be moved to the USA, the Board of Directors clarifies that the head quarter will remain in Trelleborg, Sweden.

Pergo/Euparal, April 2005

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Tarkett’s factory in Johnson City (Tennessee, USA) makes prefinished parquet

Tarkett AG: financial results 2004

For the business year 2004, Tarkett AG recorded a turnover of 1,436.8 million Euro compared to 1,394.3 million Euro in the previous year. This corresponds to an increase of 3% at current exchange rates and 5.1% at constant exchange rates.

Wood decreased by 1.2% but, at constant exchange rates, this segment showed an increase of 2.9%. Once again, Laminate continued its growth trend with a strong plus of 39.3% (39.5%). With a plus of 3.5%, West Europe showed a positive sales development. This increase is mainly attributable to the large volume markets with a sales plus of 11.8% in the UK, an increase of 7.8% in South Europe, including the Benelux countries, and an increase of 1.9% in France. Germany also contributed a sales increase of 3.1%. At the beginning of this month, Tarkett announced the conclusion of a laminate-joint venture between Tarkett and Aconcagua Timber, a Chilean wood panel company, to produce wood panels and laminate floorings in the USA. Tarkett: “The two partners will operate jointly on the fast growing North and South American laminate markets.” Tarkett is also planning a further joint venture in West and East Europe for the production of laminate flooring. It is not yet clear if present laminate partner Egger is involved.

Tarkett/Euparal, April 2005

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Domotex Asia/ChinaFloor 2005 attendance up

This year, 588 exhibitors presented their flooring products on 46,000 square meters of exhibition space in four halls of The Shanghai New International Expo Centre, interacting with the 25,300 visitors.

“With a growth in visitors (+33.5%) and a growth in exhibition space (+33.3%) Domotex Asia/ChinaFloor 2005 has reinforced its position as a leading exhibition in the Asian market,” said Wilbert Heijmans, senior project manager of the show. Domotex Asia/ChinaFloor is now ranked 3rd worldwide. ‘Looking for new suppliers’ was the main reason to visit the show, as indicated by 45.8% of the visitors. Well over 12% of visitors were from abroad, with Japan, Korea, the USA and Australia leading the way. The show received a total of 3,200 international visitors from 71 countries.

The international visitors did not only focus on buying floorings made in China, but also looked for potential partners to set up their own production in China. “The growth in the Chinese and Asian flooring market could really be felt at the show. The atmosphere at the show was very energetic, and you could see everybody at the booths was hungry to do business,” said Wilbert Heijmans. Belgium, Germany, the Netherlands and the USA had organised joint participations. Also, a European pavilion was present. Heijmans: “More than half of our trade show consists of wood, parquetry and laminate flooring. These segment grow enormously in China. Not only national demand is strong, also the exports to the USA, Europe and Australia are expanding enormously. Most of our international visitors came from these regions.”

VNU Exhibitions/Euparal, April 2005

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Alloc Domestic Oak Plank Natur

EPLF presents Drum Sound Standard

The EPLF European Producers of Laminate Flooring recently concluded the Drum Sound Standard for laminate flooring. This norm establishes uniform test procedures and measuring criteria for laminate flooring.

Following several years during which numerous measuring criteria have been used and communicated, the new Drum Sound Standard now provides for the first time a measurable comparison. The Norm defines how the drum sound generated by walking on a laminate floor covering, can be measured and evaluated. The basis of the drum sound classification is a reference laminate flooring with a standard foam underlay, which must comply with the requirements stipulated in the norm. Product testing will result in a Nm loudness value, and will be used in a Sound-Loudness (SL) rating system. All EPLF members acknowledge that their laminate floors will now be evaluated according to the parameters set out in the Norm, and that the information will also feature in their advertising.

EPLF/Euparal, March 2005

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China’s laminated flooring industry expanding

China produced 155 million square metres of laminated floor boards last year, compared with 130 million square metres in 2003, with this figure set to grow again this year, Gao Zhihua, executive vice-director of the China Timber Circulation Association, recently told the online edition of China Daily.

The product was first introduced into China’s large cities such as Beijing, Shanghai and Shenzhen from Germany, Sweden, Austria and Norway in the early 1990s. As the standard of living increased with China’s expanding economy, the demand for the product only grew. With demand up, many Chinese enterprises saw an opening and began producing laminated floor boards with imported technology and equipment.

China’s own laminated flooring industry began in 1995 and reached a peak five years later, from 2000 to 2002, when annual growth remained at 40%, according to China Daily. There are currently about 300 laminated floor board producers in the country, of which most are located in Guangdong, Fujian and Sichuan provinces as well as Shanghai and Beijing. The vast majority of them now use technology introduced from Europe. But to meet growing demand, they have been trying to develop their own patented equipment and technology to reduce costs. Southeast Asia and the Middle East have become the largest importers of China-made laminated flooring. About 20 per cent of the flooring produced in China is shipped to these areas every year.

China Daily/Euparal, March 2005

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EPLF sales statistics 2004 (revised)

In 2004, the 22 members of the EPLF European Producers of Laminate Flooring achieved worldwide sales of 437 million m2 of laminate flooring ‘made in Europe’, compared with 387 million m2 the previous year – an increase in output by the member companies of 50 million m2 (+13%).

Western Europe remained the strongest sales area for the members, accounting for 38 million m2 (+17%) of the growth (2003: 229 million m2; 2004: 267 million m2), and in doing so gave Western Europe 61% of total sales, compared with 59% in 2003. As in the previous year, the strongest individual market was Germany, with sales of 84 million m2, followed by Great Britain (49 Mio. m2), France (36 Mio. m2) and the Netherlands (20 Mio. m2). The North American market showed further strong growth, with sales by EPLF members reaching 79 million m2 (69 million m2 in 2003), which is an increase of 14% and represents some 18% of total EPLF sales. Within North America, sales to the US alone increased from 48 million m2 in 2003 to 60 million m2 in 2004.

EPLF/Euparal, March 2005

Merbau smuggling to China

“Rampant smuggling of illegal timber from Indonesia to China is a billion dollar trade threatening the last remaining intact tropical forests in the Asia-Pacific region,” the Environmental Investigation Agency (EIA) and Telapak Indonesia revealed last february.

Merbau is being smuggled out of Papua at a rate of around 300000 cubic metres of logs every month to feed China’s flooring industry. The majority of merbau logs stolen from Papua are destined for the Chinese port of Zhangjiagang, near Shanghai, with false Malaysian paperwork, according to the EIA. The logs are then transported to the nearby town of Nanxun, China’s main centre for the manufacture of wooden flooring. This town only had a handful of flooring factories five years ago, now there are more than 500 being supplied by over 200 sawmills cutting only merbau logs. The China Timber Distribution Association reacted that China does not import timber from Indonesia as alleged by the Environmental Investigation Agency and Telapak Indonesia.

EIA/Euparal, March 2005

The European parquet market in 2004

The European federation of the parquet industry, FEP, estimates that the overall volume of parquet sold in Europe will have increased by about 5% during 2004. This would mean that, after two years of stagnation, the growth tendency already observed in 2003 is gradually being confirmed.

FEP also states that expectations of a continuation of the positive trend through 2005 seem warranted at the present time. In volume terms, the increase would lead to parquet sales of about 88.5 million m2 in the ‘traditional’ FEP countries. No data can yet be provided for the entire FEP community. Assuming a total parquet consumption close to 95 million m2 in all EU and EFTA-countries in 2003, the hurdle of 100 million m2 is now in sight, according to FEP. The federation also states that developments on the production side have, on the other hand, not everywhere been as positive as the market growth may lead to believe. Especially producers of mosaic and solid parquet have been experiencing difficult times mainly because of heavy competition from producers outside the EU, but also due to shifts in consumer product preferences and demand.

The strong Euro compared to the US dollar has not been positive in this respect either. Production of multilayer has been increasing, with additional capacities being announced. Most producers now also offer glue-free installation systems for their products and this could have contributed to the consumption increases witnessed since 2003. These producers are nevertheless facing increased competition on the market as well, having a strong impact on their profitability and future competitiveness.

FEP/Euparal, February 2005