By Steven Feldman
FT. LAUDERDALE, FLA.—Market conditions may be less than stellar, but the National Wood Flooring Association ( NWFA) is doing what it can to position its members for growth when the turnaround does occur, which by most accounts will not be until mid to late 2009. And while much of what the organization is doing is related to environmental issues in this country, it is also looking beyond U.S. borders.

“Business is down about 15%,” said Ed Korczak, executive director. “But I think we’ve hit bottom and are starting to bounce back. We are seeing a bit of a positive change in consumer attitude, although we don’t see a real turnaround until the middle of 2009 at the earliest. The custom jobs at the higher end are still available— harder to find, but still available. Remodel has been good, but those jobs are relatively small square footage compared to the amount of wood that goes into a new home.”

Korczak noted the degree of rebound is geographically rooted. Certain markets, like Florida, where homes leaped and dropped drastically are having tougher times than areas where prices remained more stable. “Compare that to an area like St. Louis, where home prices had only increased 5% and the decrease has only been 2% to 3%.” He said that allows the bounce back to happen sooner because no one was so deeply in debt where their home value could not be recouped via a sale. He cited Las Vegas and Los Angeles as other tough goes.

With that said, NWFA is not sitting still with initiatives to help its 4,180-strong membership, which is composed of three factions: dealer/contractors (2,800), distributors (between 600 and 700) and manufacturers (about 800). For manufacturers, the association is seeking to help expand domestic exports. “Wood flooring is part of the global market,” Korczak said. “The domestic manufacturer and distributor need to look at partnering with other countries to export our product. A good example, is red oak, which is only grown in the U.S. We are working with the American Hardwood Export Council to help our members increase international sales. That’s why we have been active with Domotex in Germany, Asia and soon Dubai.”

One company well on its way to establishing an overseas presence is Anderson Hardwood Floors, which recently signed a licensing and partnership agreement with Chinese flooring manufacturer Power Dekor. Don Finkel, Anderson CEO, told FCNews company’s products will be distributed in 500 stores in China this year with significant expansion plans over the next five years. Following a good/better/best strategy, the best products—about 20—will be made in the U.S. by Anderson and exported to China.

Back home, one thing Korczak believes will help North American wood flooring manufacturers are some changes occurring in China, particularly as it relates to imports, which in 2007 constituted 19% to 22% of total wood flooring sales. “The Chinese government in the past was giving a 28% subsidy for bringing in a log from the U.S., where it would be finished then exported back,” he said. “That subsidy has been removed, so now Chinese manufacturers must compete at level pricing. Going forward, we will receive fewer imports from those that were only doing it because of the subsidy.”

A more level playing field will also result from the increased cost of manufacturing in China. “They are experiencing an industrial revolution,” Korczak said. “Labor is not cheap anymore. The government has imposed controls to address pollution and human resources, which have increased their manufacturing cost.” Rather than export, many manufacturers are increasing production for domestic use as their 1.3 billion consumers move to middle-class status. In fact, one company has reduced its exports from 40% to 45% of total production to 15% because of demand, he said.

Green means go

Realizing that green is now a big part of the consumer world and there may be some misperceptions regarding the environmental attributes of solid wood, NWFA is addressing through its programs the green nature of wood flooring.

“Through our lifecycle analysis, we have proven solid wood flooring is environmentally friendly, and we are working with the U.S. Green Building Council’s LEED program to gain recognition in the construction process,” Korczak said. “We are also working with National Association of Home Builders and GBI (Green Building Initiative); they both have accepted our lifecycle analysis and awarded points for wood flooring.”

The analysis studied hardwood flooring from the harvesting of the tree to the disposal of the floor at the end of its lifecycle. “The tree is inherently green when it comes out of the ground, and the analysis studied what you do to the tree as you take it from raw material to finished product,” Korczak said.

“Then they study what happens to that product when it is done with its useful life. The analysis revealed we use less water and emit fewer gases, and our main use of fossil fuel is in the kiln-drying system, and we provide 70% of that fuel ourselves by burning waste material to create steam. At the end of our lifecycle, the wood is either reclaimed, reused or even used for fuel. So it leaves no negative environmental footprint.”

Luc Robitaille, vice president of marketing, Boa-Franc, maker of the Mirage brand, said his company has been an environmental steward for years. “We have been utilizing three main outlets for the waste: The first is to power our kilns; the second is selling the wood chips we do not need for our boilers to a company that uses them for fiberboard. And what’s left over we sell for animal bedding.”

The organization is also working on a program to help its members market the green nature of wood flooring to consumers, architects, designers and builders. Korczak noted NWFA is taking the factual data from the life cycle analysis and developing informational pieces that will appear on its consumer Web site—woodfloors.org—and making these same materials available to its members so they can market to their customer base. “We can market nationally through our Web site, and we give our members the tools to do the same marketing locally.”

Robitaille is a proponent of the green initiative. “I think there is a misconception that cutting down a tree is bad. But we all know there is more wood out there than has been in the past, so our local harvesters are much more responsible than what may be public perception. We must start getting the word out so we get the recognition and consumers can have less guilt about buying hardwood floors. The ultimate is that LEED and GBI give more credibility and more points to wood vs. other materials.”

NWFA’s environmental efforts do not end there. It has been very active with the Hardwood Federation addressing illegal logging. It has even worked with Congress on a Section 332 study that analyzes imports of hardwood from 12 countries to identify the areas where illegal logging may be the major concern. “One of the major culprits is Indonesia for merbau,” Korczak said. “And a lot of countries have no documentation at all, so you can’t tell if they are good or bad. That’s where we support two organizations: the Forest Stewardship Council, which does a good job internationally to maintain chain of custody for illegal logging, as does the Tropical Forest Foundation.”

Robitaille said Mirage has had chain of custody for close to 10 years, working only with responsible suppliers in Canada, the U.S. and Brazil. In fact, the company went beyond the call of duty a couple of years ago when there was some doubt as to the logging legality of some companies’ merbau. “At that time we immediately stopped selling merbau, even though we knew our supply came from responsible sources. We did this because we did not want to support and help push a species we knew had some issues in the marketplace.”