Carpet Fiber Update - March 2013
By Darius Helm
Among the many important developments in the carpet face fiber industry, none is more significant than the unrelenting march of polyester fiber through the residential carpet market. In just a few short years, polyester (PET) has gone from a second-string polymer to the leading face fiber, by volume, in the residential market—though nylon remains the leader in revenue. And all signs point to continued gains.
There are other major trends on the residential side: the continued development of ultra-soft fibers—it’s happening with nylon, polyester and triexta, with denier per filament counts as low as three or four—and the growth of solution-dyed fiber.
One big story over the last few years has just about run its course; the shift in fiber from staple to filament is more or less over. According to PCI Fibres, PET staple accounted for 6.4% of total U.S. mill consumption of face fiber last year, compared to 11.2% back in 2005. Over the same period, nylon staple fell from 15.5% of total consumption to just 0.5%. Polypropylene staple, which largely goes into rugs, accounts for 1% of the market, down from 1.3% in 2005. While polyester staple is expected to continue to shrink, nylon staple, which can’t fall much further anyway, is still in demand in wool/nylon blend carpets.
On the commercial side, the trend of lower face weights per yard means that even when sales are up for commercial carpet, face fiber volume can still be down. These days, the trend is less driven by manufacturers reducing face weights, since manufacturers have taken that about as far as technologically possible, than by the steady shift of marketshare from broadloom to carpet tile; not only are average carpet tile face weights lower than in broadloom but broadloom also ultimately uses additional fiber because of its higher rate of waste in installation compared to carpet tile.
Another big story on the commercial side is the continued greening of fiber. The last few years have seen the introduction of both nylon 6 and nylon 6,6 with recycled content, including post-consumer, and in the last couple of years the fiber producer generating the most “green” buzz has been Aquafil, with its Econyl fiber with 100% recycled content, 25% of which is currently post-consumer—it’ll be available at 50% in June.
Recycled content of 20% to 30% is fairly common among fiber producers, but the pressure is on to do more. Invista, for instance, is upping the recycled content of Antron Lumena with its TruBlend fiber technology.
Most recently, there’s been a lot of activity on the bio-based side, with Universal announcing in December and Invista announcing in February strategic partnerships with biotech companies for the development of fiber with bio-based content.
One fiber on the market that already has bio-based content is triexta. The polymer is marketed by DuPont as Sorona, and the fiber, SmartStrand, is 37% bio-based. Because of its premium pricing, the fiber is yet to make much of a splash in the commercial market. Right now, it’s mostly through Mohawk, which has already established the fiber in the residential market, where it has exclusive rights. Pharr Yarns makes commercial SmartStrand.
SOFT FIBER DEVELOPMENTS
Mohawk has had great success in the residential market with SmartStrand triexta (PTT) fiber for several years. The polymer is sourced from DuPont, which incorporates 37% bio-based content from Tate & Lyle. The fiber is naturally stain resistant like polyester and fairly resilient, and it also feels softer than nylon. SmartStrand Silk, a 4 DPF (denier per filament) fiber introduced a little over a year ago, took softness to a new level. By many accounts, SmartStrand Silk is, at least for now, the softest fiber on the market.
Invista’s TruSoft, introduced around the same time, is also extra soft. The nylon 6,6 fiber, around 3 to 4 DPF, is among the softest nylon fibers available. On the polyester side, Engineered Floors, Shaw, Mohawk, Beaulieu and Phenix have all enhanced their soft fiber offerings.
It’s worth noting that the new fibers, at less than half the DPF of traditional soft fibers like Stainmaster Tactesse and the first generation of Anso Caress, are really ultra-soft. Consumers love the softness, but there are still concerns in the industry that the product will, over the long run, fall short on performance. The increased surface area alone suggests that the fiber construction could lend itself to easy soiling.
The growing market for soft fiber is an aspect of the redefinition of residential carpet. As broadloom has lost share in the home to hard surface flooring, it has retreated from most of the high traffic areas, where hardwood, ceramic and LVT outperform with low maintenance and long-term durability. It’ll still go on stairs and secondary corridors, and those applications, along with that shrinking share of the public areas of the home, is where the high performance broadloom tends to go.
However, broadloom’s share is most secure in the private areas of the home, the bedrooms (and to some extent the dens and family rooms). Bedroom carpet does not rely on design as much as carpet in the main areas of the house, where homeowners essentially express their design sensibilities to the public. In the bedroom, it’s more about comfort and a sense of luxury. As Mohawk’s Tom Lape put it, “People don’t buy a Tempur-Pedic because they want their neighbors to see. It’s visceral.”
Soft fiber is a visceral sell, uniquely suited to those high comfort, low traffic environments. Its performance attributes further distance broadloom from the hard surface categories—and area rugs of comparable softness can’t offer the same resilience.
So the category has collectively staked a strong claim on the inner sanctum of the home. There may be room for carpet fiber to get softer, but in all likelihood it’s reaching the point of diminishing returns. However, the replacement cycle for bedroom carpet is longer than it is in other parts of the home, and it’s a good bet that for the next several years, all of those consumers coming in to replace their bedroom carpet (made of at best 12 DPF but more likely 16 to 18 DPF nylon fiber) will make their decision the first moment they feel an ultra-soft carpet.
The firm having the biggest impact on the residential carpet market right now is Engineered Floors, which sells to the multi-family market as well as through its Dream Weaver brand, the residential retailer channel. The firm, which at four years old is practically brand new, had estimated revenues of $300 million last year—in what has generally been a shrinking market. Other polyester specialists, like Phenix, are also making gains.
This means there are a lot of mills out there losing share. The industry has already seen the demise of Gulistan, which at its prime—before the collapse of the housing market—was a $150 million company.
Mohawk and Beaulieu have had big polyester programs for several years. Until recently, most of that was staple fiber, made from 100% recycled drink bottles. Both firms have heavily shifted into filament. And Shaw is now also a major player in that market. By and large, PET filament is available with 25% post-consumer content, but firms like Mohawk can push that up to 50% or even higher. Pharr can make polyester filament out of 100% reclaimed drink bottles, but for now it’s priced at a premium, so there’s little demand.
Even Invista is getting into the polyester game, throwing the weight of its Stainmaster brand into its new program, Stainmaster Essentials. The line, which is largely polyester but also features nylon 6,6, was designed to fill a need at entry level price points of what the firm considers to be better performing products—good enough to carry to the Stainmaster name.
Firms like Engineered Flooring are also leading the trend in solution-dyeing. Most mills and fiber producers are launching or expanding their solution-dyed offerings. All of Engineered’s products are solution-dyed. Not only does solution-dyeing solve the problem of side-matching, but the color won’t fade from sunlight—and it’s cheaper to produce than staple fiber.
PET, and specifically PET filament, owes its ascent to three key developments. Firstly, the resin itself has been improved. It’s most noticeable to consumers in the form of drink bottles, which are much thinner than they used to be and at the same time regain their shape more easily—whereas in the past those clear bottles would lose their resilience and whiten where indented. That same resilience translates to the performance of PET as a fiber.
Nevertheless, no one is under the illusion that polyester can perform like nylon. While polyester has the advantage of inherent stain resistance, nylon’s greater resilience and durability, including its significantly higher melting point, make it a more valuable product.
Second is price. Global polyester consumption has grown to about 50 billion pounds a year, and industry experts believe that in four years time it will be closer to 95 billion pounds. At the same time, polyester in the U.S. carpet market accounts for only about 500 million pounds of that, or 1%. The size of the market, which is dominated by several multi-billion pound producers, makes pricing highly competitive and relatively stable. High cotton prices about three years ago increased the use of polyester in apparel, and when cotton prices came back down, polyester held onto a lot of its gains—thanks in part to the continuing development of performance materials, like fleeces and wicking fabrics. Thirty years ago, polyester was known as the shiny fabric used in leisure suits, but now it’s become the sports performance fiber.
By contrast, global nylon production is well under ten billion pounds. The product is used in apparel and carpet, and, increasingly, in engineered resins, particularly in the automotive industry, where its lightness, strength and high melting point allow it to replace parts like transmission housing that were traditionally made of steel. The global carpet market accounts for close to 25% of that total, with nearly half of that going to the U.S.
In the U.S. market, polyester has a strong position in the multi-family sector and it’s quickly growing share in the builder and retailer markets. It’s priced well, and its naturally soft hand makes it a good fit for bedrooms, where its lower resilience compared to nylon is not as much of an issue.
The third reason for the growth in polyester filament is technology. The company at the middle of this is Germany’s Oerlikon Neumag, which developed BCF extrusion equipment that produces uniform, precision filament. It’s more cost-effective to make filament than staple, so once the technology was developed, the shift was almost automatic. Most polyester extruders use the S5 version of Neumag’s highly automated machine, which enables the production of very uniform, highly bulked fiber at high winding speeds.
When it comes to resin and fiber production, one of the most important stories out there relates to caprolactam, the raw material for nylon 6 production. For a long time, Asian markets, led by China, have relied on caprolactam imports to supply their nylon production. Much of that supply has traditionally come from the U.S.
According to PCI Fibres, in 2012, China imported just over 700,000 tons of caprolactam, up about 12% from 2011, but those numbers are about to change direction. In the last year, new caprolactam capacity has come on line in Asia (mostly in China), and even more capacity is being added this year. By the end of 2013, it’s likely that there will be global overcapacity of caprolactam. It’s a strategy that will serve China well, but with significant impact on other markets.
This year the U.S. will see a glut in caprolactam, and that will translate to more competitive pricing. Meanwhile, caprolactam suppliers are no doubt struggling to maintain their margins. DSM, one of the world’s largest caprolactam producers, is already looking for exit strategies from the North American market and the European market too. It’s looking for partners to take over operations.
According to the firm, part of the reason is because of falling demand from the automotive and construction sectors, with margins further squeezed by increases in benzene, the raw material for caprolactam production. A deal with Shaw, the largest carpet fiber extruder in the world, to purchase part of DSM’s capacity is one step toward reducing its exposure. However, DSM is moving forward with its joint venture to produce caprolactam in Nanjing, China with China Petroleum & Chemical Corp., because the firm believes it makes sense to invest in China.
The delta in pricing between nylon and polyester has shrunk by half over the last year (from 60¢/pound to about 30¢/pound), and the new caprolactam capacity will further erode nylon pricing. However, the polyester increases that helped narrow that delta will likely stall later this year, as China and other Asian nations add paraxylene capacity. Paraxylene, which is derived from oil, is used to make purified terephthalic acid (PTA), which is used in the manufacture of polyester fiber.
In response to the rise in polyester pricing, mills have focused on adding recycled content to their PET offerings, which for now offers a significant financial benefit. However, as these recycled content percentages get established and continue to rise, demand for PET bottles will grow as well, and that will bring up prices. But for now there is almost a 50% premium for virgin PET over reclaimed material.
Invista, the largest nylon 6,6 producer in the world, has been busy on a number of fronts, broadening its residential offering, revamping and updating both its Stainmaster residential and Antron commercial brands, and entering into a formal collaboration with a biotech firm for the development of bio-based fibers.
Last month, Invista announced its partnership with Seattle-based Arzeda Corp., a cutting edge biotechnology company that uses its “computational enzyme design technology” to create a “synthetic biology.” The initial goal is to create a bio-based butadiene.
On the Stainmaster side, Invista has retooled its program into a good, better, best program: Essentials, Deluxe and Premier. The new brand architecture is based on research derived from a survey of 10,000 consumers, and the three tiers are arranged by foot traffic and durability. In addition, the firm has designed a needs-based selling system for retailers, focusing on solutions for active families who need durable, low maintenance carpet; homes with heavy sunlight, where its solution-dyed SolarMax can prevent fading; and those with low discretionary incomes, where the Essentials line may give them what they need.
The Essentials line offers both nylon and polyester fiber, marking the first time that the Stainmaster brand has featured anything except nylon 6,6. It’s a strategy that makes sense when considering Stainmaster as a consumer brand, since it acknowledges the prominence of polyester and puts itself in the game. At the same time, it’s been a transition for retailers, who have sold Stainmaster as a top-of-the-line version of the best performing fiber, nylon 6,6.
According to the firm, the new technology for PET filament extrusion had a big influence on the decision to put its brand name behind the fiber, and it’s implicit in the brand structure that polyester doesn’t perform as well as nylon 6,6. However, Invista’s position is that its product performs better at those price points than the mass of products out in the market. The PET in Stainmaster Essentials is outsourced, which has confounded some industry veterans who feel that fiber producers should focus on running their assets.
So far, about 150 out of 350 Stainmaster Flooring Centers, including many of the largest retailers, have embraced the new brand and selling strategy.
Invista introduced its ultra-soft TruSoft fiber over a year ago, exclusively with Dixie, Shaw and Tuftex, but adjustments to the construction of the fiber slowed the roll-out and products didn’t make it into the market until late in the third quarter. This year, the fiber has been opened up to the other mills. According to the firm, the delays with TruSoft played a role in the reduced Stainmaster introductions at Surfaces. This year, 38% of all carpet introductions were Stainmaster, down from closer to 45% last year.
Gulistan’s bankruptcy had particular significance for Invista because the mill primarily used Stainmaster fiber. Dixie, another big Stainmaster mill, has picked up many of the defunct firm’s strongest styles, while other mills are considering the remaining holes left by Gulistan’s exit.
On the commercial side, beyond the biotech partnership, Invista is expanding the post-consumer recycled content of its Antron Lumena with TruBlend fiber technology, which currently offers 30% recycled content, of which 5% is post-consumer.
The firm is shifting the focus of its facility in Kingston, Ontario to the materials business, like airbags and industrial fiber, and will compensate by increasing production of nylon 6,6 at its facility in Camden, South Carolina.
Aquafil grew by an estimated 15% last year, driven by the continued growth of carpet tile, where its solution-dyed nylon 6 has a strong position, as well as continued acceptance of Econyl, the firm’s 100% recycled solution-dyed nylon 6.
The recycling program sends reclaimed nylon to the firm’s depolymerization facility in Slovenia, where it makes pellets that for the U.S. market are extruded in the firm’s facility in Cartersville, Georgia. When the program was launched in early 2011, most of the recycled nylon came from fishnets, but as the program has evolved reclaimed carpet has become an increasingly important feedstock.
This June, Aquafil will increase the post-consumer content of Econyl to 50%. For now, Econyl is priced higher than virgin nylon. However, the firm anticipates that down the road the two will be comparably priced. Econyl currently accounts for 15% of the firm’s volume. The firm’s premium Chroma Casa program, featuring 360 colors, was originally launched in a 1260 denier, and at the upcoming HD show the firm will unveil a 2800 denier version.
Aquafil has also entered the polyester market. For the last year, the firm has been running solution-dyed polyester. It started with 20 colors and has now increased it to 42. The product goes mostly to the hospitality and mainstreet markets.
Universal Fibers makes solution-dyed filament in nylon 6, nylon 6,6 and PET, along with a little polypropylene for some military applications. Prior to last year, the firm’s nylon 6,6 with up to 30% recycled content went to market through Interface, but thanks to a $40 million investment that has enabled added capacity, the Refresh fiber has become available to the open market over the last year.
The firm serves the residential market largely through specialty accent yarn systems in both PET and nylon, and that accounts for about 5% of its business. The bulk of Universal’s fibers go into commercial carpet tile. Most of the firm’s nylon 6 goes to the automotive market.
The firm, which manufactures in Bristol, Virginia, has a global presence, including facilities in China and Thailand, along with distribution in Europe.
In December, Universal announced that it had entered into a strategic relationship with a firm that develops bio-based chemistries, in order to make precursors for nylon 6,6 out of bio-based content. Verdezyne is a biotechnology firm developing unique yeast strains for the cost-effective production of bio-based chemicals.
Nylon 6,6 is made of hexamethylenediamine and adipic acid, and Universal’s goal is to make the adipic acid, which accounts for about 55% of the raw material to synthesize nylon 6,6, a fully bio-based component. That would ultimately yield a nylon that, with color and stain resistance treatments, is about 30% bio-based. Combined with enhanced post-consumer and post-industrial content, Universal could have a product that is 70% bio-based or recycled.
Pharr Yarns, which has been around since 1939, had a growth year in 2012. The firm has a reputation for its ability to adapt to changing markets. It used to be known for its spun capabilities and space dyeing, but then it got into its own extrusion and shifted to filament production. These days, the firm’s state-of-the-art equipment includes modern extrusion machinery, all solution dye capable, along with cutting edge twisting and heatsetting technology. About 90% of its product goes to carpet, and the rest is largely specialty protective apparel like Kevlar and Nomex flight suits.
When the firm built its extrusion plant, it designed it to be flexible, which turned out to be fortuitous, because polyester started to take off soon after, giving Pharr a leg up on the competition.
The firm extrudes DuPont’s Sorona triexta, which it sells to the commercial mills (largely Mohawk right now) under the SmartStrand Contract brand, along with polyester, while it sources its nylon fiber because it’s more competitive than making it in-house. The firm’s triexta also goes into automotive applications, like the Nissan Leaf, and it’s used in some European carpet.
The firm sells polyester fiber with 20% post-consumer content. However, it has the technology to go all the way to 100%, though that fiber’s priced higher and there’s little demand for it right now. The firm recently launched an ultra-soft polyester through Phenix called SureSoft, a 5 DPF product with a fine tip and a soft hand. Pharr also continues to spin wool fiber for carpet applications
Zeftron, which became part of Shaw Industries with the firm’s acquisition of Honeywell in 2005, sells nylon 6 commercial fiber, largely solution-dyed, to the open market. The fiber is mostly made in Bainbridge, Georgia. The firm also sells nylon resin.
Zeftron was one of the early adopters of sustainability, launching an environmental program in 1992, and its national recycling program, 6ix Again, in 1994. Currently, the firm offers nylon with 25% post-industrial recycled content in all 105 solution-dyed colors. The firm’s fully recyclable fibers are cradle-to-cradle certified.
Ascend was born nearly four years ago when SK Financial bought the nylon assets of Solutia out of bankruptcy. The firm is fairly vertically integrated, going all the way from raw materials to finished product, which is all nylon 6,6. About a third of its capacity goes to non-fiber plastics like engineered resins, another third is chemicals, and the remaining third is polymers and fibers, with five facilities in four states (Texas, South Carolina, Alabama and Florida).
In addition to nylon filament, the firm still makes some staple, most of which goes for applications outside the U.S. All of Ascend’s fiber is piece dyed. It goes to the commercial market under the Ultron brand name.
At the end of last year, Ascend came out with Ultron Ombré, the result of two years of research and development. Ombré uses controlled random variation in the spinning process to impart dye variation. It’s a mechanical process, changing the dye affinity along the length of the fiber. Ombré effects, which create graduated color shading, are traditionally achieved with separate space dyeing or through using different twist levels or with specialized tufting equipment, so this product could greatly simplify the process of creating the effect. It’s currently priced at a slight premium.
Ascend expects Ombré to go to both residential and commercial applications, though it’s been focusing on its specialty, the commercial market. But the firm is already putting together a soft version of the product for the residential market. The first commercial programs will likely be seen at NeoCon this June.
Residentially, Shaw Carpet has been focusing on softer nylons and polyesters. The firm recently introduced a new soft fiber called Caress, as distinguished from its Anso Caress, introduced at the turn of the century. The nylon 6 product came out this winter.
Most of Shaw’s PET is now filament, though it still produces a small amount of staple. Its PET recycled content is currently certified at 25%. The firm’s PET carpet, which includes soft fiber, has been growing rapidly, though it’s still significantly smaller than the firm’s nylon offering.
On the commercial side, the big story continues to be the firm’s EcoSolution Q fully recyclable nylon. Shaw’s EcoSolution Q Extreme goes after performance markets.
Mohawk’s SmartStrand Silk has been creating a lot of buzz over the last year for its ultra softness, with its standard SmartStrand having already made big gains in the market. And on the nylon side, the firm came out with Wear-Dated Embrace, an ultra-soft, low DPF fiber. This spring, the firm will also introduce an ultra-soft nylon, making Mohawk the only firm to offer soft fibers in three different polymers.
Mohawk has also ramped up the post-consumer recycled content of its PET offering, going from 25% to ratios approaching and frequently exceeding 50%.
Over the last three years, the firm has showcased SmartStrand in commercial contract. It’s currently the only U.S. firm to use triexta commercially. At this year’s NeoCon the firm will likely showcase new SmartStrand Contract styles, but it’s continuing to develop the market at a slow and steady pace.
The last year has also seen some big management changes at Mohawk, including Jeff Meadows coming in to run residential sales across all flooring categories. In addition, David Holt, who used to be with Mohawk and has been out of the industry for 15 years, is returning to run sales in the builder and multi-family markets. Tom Enright, formerly with Shaw, is now running Mohawk’s international business, and Mike Gallman, formerly with Blue Ridge, is in charge of product development and management on the commercial side.
Beaulieu’s residential carpet business is far larger than its commercial operation. On the residential side, the firm produces nylon 6 and polyester carpet, most of it filament, along with some polypropylene and staple polyester. Recycled content in its filament PET goes as high as 20% in its Property Solutions line.
This year, Beaulieu’s biggest introductions were in nylon—the firm does its own polymerization. The firm introduced a collection under the Bliss brand called Indulgence, a 4 DPF solution-dyed nylon with enhanced fade and stain resistance.
On the polyester side, the firm’s Everclean soft fiber, introduced last year, has been performing well. The firm plans on adding more solution-dyed programs in both nylon and polyester in the near future.
Engineered Floors, which has played a key role in making PET the fastest growing fiber in the residential market, makes only solution-dyed polyester filament, all currently from virgin material. The firm’s new PureSoft Cashmere, with a DPF of less than five, was received enthusiastically at the Surfaces trade show. Engineered Floors puts close to six twists in its soft fiber to boost performance.
The firm serves the multi-family market through the Engineered Floors brand and goes to the flooring retailer channel under the Dream Weaver brand. Last year, sales at the firm topped $300 million. The firm’s second facility, located in Dalton, has been operating since November and has already been expanded twice, with two more expansions planned for this year—the Dalton facility has a higher capacity than the original Calhoun facility—so it’s safe to say that 2013 should be another strong growth year for the firm, and for the polyester category.
WOOL CARPET'S NICHE
Homeowners today are tempted in so many areas when it comes to refined finishes. Granite countertops, stainless steel appliances, crown molding, up-scale faucets, large screen TV's—the list goes on and on. And when it comes to flooring options, wall-to-wall wool carpet is usually only found in homes that understand the value of its added expense. Just as with most housing related products, the demand for wool carpet has been negatively impacted over the last five years as homeowner have tightened their wallets hoping that housing values would stabilize and eventually recover. And in the meantime, consumer's attitudes have shifted away from the disposable mindset of the opulent years and are starting to gravitate toward more natural, chemical free materials. The sweet spot for wool carpet is usually double if not three times the cost of regular nylon carpet.
Yes, the price tag on wool is higher than synthetic fibers, but the fiber also carries with it many advantages. Because it is a natural product, the cell structure allows it to adapt to its environent, absorbing excess moisture in the air and releasing it later to moderate the environment. It is also hypoallergenic and produces no noxious fumes in the home. And because of its acoustic benefits, wool is frequently used in public spaces and high-end multi-family buildings. It is also more fire retardant than other fibers—without added chemicals.
Wool also retains its appearance without fading, so it looks better longer. And the natural crimp of the fiber means that it bounces back to its original shape, eliminating flattening. All things considered, wool offers the lightest carbon footprint of all fiber types and is biodegradable at the end of its useful life.
Many of the mills that focus on producing wool carpet hold their annual sales figures close to the vest, making it hard to accurately track this sector of the market. Last year, one of the biggest stories on the retail side was CCA Global's move to expand its Just Shorn program from International Design Guild into Carpet One. The top three U.S. producers of broadloom wool carpet are Dixie, Karastan, and Bloomsberg.
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