Expansion has always been key to the global floor covering industry. Most flooring products are fairly heavy and expensive to ship, and prompt delivery to project sites is extremely important. As a result, more companies have been expanding in developing areas in recent years, where production costs are typically lower and the less mature markets have greater growth potential.
For example, Switzerland-based Autoneum, a producer of automotive flooring products; began construction of a 27,000 square meter plant in San Luis Potosí, Mexico for the production of carpet systems and other automotive products in August 2015. In August 2016, the company announced that it would build an additional 19,000 square meter plant in the same city, which is expected to begin production in 2018. The company’s expansion in Mexico is due to high demand for their lightweight noise and heat protection products globally.
Laminate drives demand growth in Russia
In 2015, Austria-based FRITZ EGGER opened a new laminate flooring plant in Gagarin, Russia. The company believes that Russia and other East European countries are strong growth markets for laminate flooring. The company also opened a new medium density fiberboard (used to manufacture laminate flooring) production facility at the Gagarin site that began production in late 2016.
US-based Beaulieu Group updated its JUTEKS (a producer of PVC floor coatings) plant in Russia in order to increase the range of products produced there and improve their quality. The expansion was completed in early 2015, and the plant can now produce approximately 25 million square meters of flooring per year.
China grows fastest in Asia/Pacific region
Several companies opened plants in China in 2015 and 2016, including International Automotive Components and Tarkett. China has historically shown explosive growth in floor covering demand and is expected to do so going forward.
Over the next five years, the trend toward opening more plants in developing areas is expected to continue. Outside of China, most significant new capacity additions will likely occur in India, Russia, the Middle East, and South America.