Domotex asia/Chinafloors officials at the market’s opening reception and awards ceremony.

By Matthew Spieler
Shanghai, China—While China’s impact on the world has steadily grown over the last 25 years, its emergence on the flooring scene began to take shape about a decade ago, specifically in the hardwood and laminate sectors. Coincidentally, that’s when Thomas Baert, president of wood and laminate maker ChinaFloors, helped found what has become known as Domotex asia/ Chinafloors (DACF).

In existence for just nine years, DACF has skyrocketed into the upper echelon of the world’s largest flooring trade shows, ranking up there with Surfaces and the original Domotex in Hannover, Germany, in terms of size and importance.

It is already the largest floor covering trade show in Asia, and depending on how one examines the statistics, it is one of the industry’s three biggest shows.

Compared to last year’s event, every main statistical category was up double-digits, with the greatest percentage increase coming from overseas visitors.

Show organizers reported guests came from 88 countries and that total visitation for the three-day market at the Shanghai New International Expo Center was 35,695, a 10% increase over last year. Of that, 5,910 came from overseas, a 37% jump from 2006. (Editor’s note: The number of visitors from the U.S. was not available at press time, though organizers said based on pre-registration numbers there was great interest from America and Australia.) Exhibitors numbered 928, 11% more than the previous market, and exhibited their wares in six pavilions and four pavilion-sized tents covering a total of 918,000 square feet, up 13.3% over last year.

“We definitely reached our goals in terms of exhibitors and visitation,” said Wilbert Heijmans, director of VNU Exhibitions Asia, one of the producers of the event, along with Deutsche Messe AG, which is a part owner of the Expo Center, and also organizes the German Domotex market.

Andreas Gruchow, senior vice president of Deutsche Messe, noted, “In the last few years, we have definitely seen more international buyers coming to Shanghai. There is no question this show has gained the third position worldwide, and we are confident it will [keep growing].”

Because of its year-over-year growth, Heijmans said, “This year it was a real challenge just to accommodate everyone. We had six halls just for wood and laminate, as Chinese suppliers have a more important role in the world.”

In fact, exhibitors of solid wood, engineered wood, bamboo and laminate accounted for 56% of the total exhibition space. The next three biggest types of exhibitors were machine made carpets, 15%, Floortech, 13% and handmade carpets/rugs, 12%.

Interestingly, even though China is the world’s largest ceramic tile producer, no such products are presented at the show. Heijmans said there is a reason for this: “We studied the possibilities, but there are already strong shows in China and Coverings in the U.S. is too close to ours. Coverings has over 250 Chinese exhibitors, and these companies cannot exhibit at both DACF and Coverings.”

Floortech is in its second year and features the latest in flooring manufacturing technology. Machinery makers from around the world brought their latest innovations to DACF, specifically in the engineered wood and laminate fields as Chinese manufacturers seek to improve their overall quality.

U.S. bound

A key reason for this is due to the growing amount of U.S., Canadian and European companies sourcing and importing products. Despite recent published reports of illegal logging practices by many Chinese companies, not to mention an investigation by the International Trade Commission (ITC), the fact remains there are over 400 manufacturers of wood flooring in the country and not all are involved in such activities (see A&W story on page three).

Those that are on the up-and-up have partnered with the largest players in the U.S. and elsewhere, and in order to maintain these ventures, their executives understand they must maintain high ethical standards in every facet of the production process.

“We play by the rules,” noted Raymond Yuen, director of international operations for Elegant Living Corp. “That’s why we have so many customers, including the biggest and best in the U.S. Integrity is something that is pretty hard to find nowadays. We understand that our customers’ trust is our responsibility.”

He pointed out how the company, which currently produces only private labeled products for many of the U.S. industry’s largest wood players, prides itself on following European quality standards, one of the reasons it is ISO certified.

Yuen also noted that producing a quality product is just one aspect of being a good partner. “Being environmentally friendly is also important—the writing is on the wall, plus our customers are demanding it. We are very conscious of it and are working toward the ISO environmental standard. You should never underestimate the power of green.”

Emile Zmenak, managing partner of Kultur International, which has operations in Renfrew, Ontario, Canada, as well as China, said, “The environment is a big issue, and things will be getting even more strict. That is why we go out of our way to source the right material. We pay a little more for it, but feel this is the correct way to move ahead and be successful.”

Because of its Canadian roots, Kultur is one of a handful of Chinese companies trying to establish its own brand in the U.S., as opposed to being solely a supplier of private labeled goods—typically known as OEM (original equipment manufacturer).

“Our first container landed in North America last month,” Zmenak said. “We’re testing the waters. We want to be the best in floating engineered and produce laminate as good as it gets. We see and understand the trends in North America and worked hard to develop products that would sell there.”

At Shanghai Dekorman Flooring, Weidong Cai, export manager, said the laminate company worked “extremely hard” to obtain a license from Unilin in order to sell its product into the U.S. “They do a lot of investigative work before giving us the license. Unilin is not stupid; it wants to protect its brand—so we must meet certain levels of quality.”

Creating a brand

Except for a handful of Chinese companies—for example, Chinafloors, which announced the worldwide launch of its Lammett wood and laminate lines at DACF; A&W and Dekorman—the vast majority of manufacturers are content with being an OEM supplier.

But the mood is rapidly changing thanks, in part, to a governmental “request” saying Chinese companies need to start venturing forth with their own branding initiatives. In addition, many companies are realizing they are reaching a point in their business where this must be done to be successful.

Most, though, admit the time to market their own brand is still two to five years down the road, but preparations are in the works—from obtaining intellectual property licenses and bringing in state-of-the-art machinery to testing the waters in smaller markets before making the investment needed for the U.S.

At Flooring by Eternity, the company recently launched the Mu Lan brand as part of its international strategy. Iris, the company’s export manager, said its high-styled engineered wood floors are designed to reach consumers in numerous markets, but it will be at least two years before it can push the brand in the U.S.

“Of course we want our own brand,” she said. “The government wants us to expand our brand all over the world. But for the U.S. the timing has to be right because it is a large market and very expensive to build a brand.”

Sihe Wood, a large OEM supplier to the U.S., has been selling its own brand in Europe for four years, “but it’s different in the U.S.—the culture and mindset,” said Yang Yang, sales manager.

The company is already a member of the World Floor Covering Association and National Wood Flooring Association ( NWFA), exhibits at Surfaces and even “has a plan” for entering the U.S., “but we need to wait for the right time,” he said. “North America is a little slower in some ways than Europe so it will at least be another two years before we bring over our own brand.”

Esa Hong of the Fudeli Floor exporting department noted the company has been exhibiting at Surfaces for a few years and is also a member of the NWFA as part of its beginning strategy to enter the country other than OEM. “We want to use our own brand in the U.S. but it is very hard. Right now we use it in Canada and hope to expand in the U.S. in two or three years.”

Selling to China

Currently, the vast majority of flooring is being shipped from China to the U.S. But with numerous international events either taking place or scheduled to take place—from NASCAR to the Olympics—not to mention the extreme amount of construction taking place, the tide may start to turn, especially with other types of flooring beyond wood and laminate.

At this year’s DACF, there was a small contingent of U.S. soft surface and resilient suppliers showing their wares, such as Armstrong and Masland. But as VNU’s Heijmans noted, “We have an agent in the U.S. plus I have personally talked to the leading American flooring suppliers and I expect the situation will change in the near future.” He mentioned three of the industry’s biggest commercial manufacturers have expressed interest, and some may be exhibitors next year.

Speaking of next year, the 2008 edition of DACF will take place March 11 to 13. For more information on attending or exhibiting, contact Heijmans at wilbert.heijmans@vnuexhibitions.com.cn.