The Backing Business - From January 2013

By Darius Helm

Over the last couple of years, wild fluctuations in the price of key polymers and chemicals used to produce carpet backing have had a huge impact on the backing business, and though conditions seem to have stabilized, and in some cases even become more favorable, the long-term outlook for supply of essential chemicals is still fraught with uncertainty.

The carpet backing industry has gone through vast changes in the last decade or so. It used to be the most basic of products—tuft the carpet into a woven polypropylene primary, slap on some latex and a woven secondary and you’re good to go. Around the turn of the century, thanks to the great efforts of firms like Synthetic Industries to elevate the relative importance of backings, the backing business became all about the innovations. New ideas and new technologies were developed to help in performance, tuft bind, pattern matching, installation flexibility and reclamation. 

Nonwovens were developed for carpet tile, different pick counts were developed for different product weights and constructions. Backings became such a visible part of the carpet story that they became actually visible, albeit briefly, on the face of the product when Lees came out with MetaFloor Collection, which essentially used the backing as the field of the design, upon which were tufted various open, exposed designs—this was part of the same aesthetic movement in product design that included Apple’s translucent iMac.

Then came the acquisitions. S.I. (Synthetic Industries) was acquired by Shaw, Wayn-Tex and part of Propex went to Mohawk—all the big mills became vertically integrated in one way or another, leaving the remaining independent producers, dominated by Propex, to serve the mid-sized and smaller mills.

Most of the development in the last few years has been in recycling and reclamation, particularly through the vertically integrated mills. The major commercial carpet mills, by and large, started their sustainability journey by making their backings greener—channeling reclaimed material into their backings, using bio-based materials, creating fully recyclable products. Independent producers have also made great strides.

Nevertheless, it’s safe to say that in the last few years the pace of progress in the backing industry has slowed, driven by the pressures of weak demand on one end and raw material increases on the other. At least for now, innovations are coming only so often, and most of the R&D goes to tweaking existing backing products to perform just a little bit better, go just a little bit greener or cost just a little bit less.

RAW MATERIAL UPDATE
In part because of the slow economy and margins narrowed by those raw material price increases, pricing has become more critical than ever in the backing industry. After a volatile 2011 in polymer pricing, 2012 brought a measure of calm. The two most common fossil fuel based materials used in the carpet backing business are polypropylene and styrene butadiene latex. Most primary and secondary backings, for broadloom at least, are made of polypropylene tape, while SB latex is the binder that attaches the secondary backing to the tufted primary backing.

In recent years prices of both polypropylene and butadiene, the most price-volatile component of latex, have been soaring, driven by increased global demand and capacity constraints. It has become fairly common for shortages of propylene, the monomer feedstock for polypropylene, to cause abrupt fluctuations in the market. Last year, however, weak demand played a role in holding down prices. 

Polypropylene prices fell in 2012, with significant capacity added in China; weak demand in Europe and other regions has also helped rein in prices. In the U.S., increases in the production of both oil and natural gas led to a temporary oversupply of propylene, the monomer derived from both of those fossil fuels. 

Shale oil from the Bakken region (which stretches down from Canada into North Dakota and neighboring states) and natural gas through much of the Midwest, the South and, most prominently, the Northeast is being extracted, largely through fracking, at an accelerating rate. While propylene is derived as a byproduct of both fossil fuels, the yield is substantially higher with oil. However, many of the crackers (refineries that break down fossil fuels into byproducts) are converting from cracking crude oil to cracking natural gas, since the abundance of natural gas makes for better pricing. But since natural gas delivers a smaller yield of propylene, propylene capacity will likely be reduced. In anticipation of growing demand, a handful of firms, including Enterprise Products and Dow Chemical, are building propane dehydrogenation plants to produce propylene for the U.S. market. 

It’s a similar situation for butadiene, which is also produced in higher amounts when derived from oil—styrene and butadiene are used to make SB latex. There’s also not enough cracking capacity for butadiene demand. In 2010 and 2011, when automotive demand (and therefore tire demand) was high, coupled with high demand for latex in general, and for nylon (which uses butadiene to make a key intermediate, adiponitrile), butadiene prices skyrocketed. But over the last year demand has fallen, which has caused prices to drop globally. Also, an increase in natural rubber supply has helped keep butadiene prices down.

Going forward, there are reasons to expect more stable butadiene pricing. For instance, some consumers of butadiene have wised up and they’ll temporarily shut down production when prices go too high rather than buy feedstock at any price, and this has reduced volatility. Also, a supply of crude butadiene that came from Libya to the U.S. before the Arab Spring may resume in the first half of next year. And there’s a new independent terminal in Houston that gives consumers the option of purchasing butadiene from overseas, if the price is right.

Looking further down the road, there are several companies intent on building on-purpose butadiene production facilities. On-purpose facilities are dedicated to the production of the chemical, rather than relying on its production as a byproduct, much like the propane dehydrogenation plants for propylene production. 

The rising cost of butadiene has also spurred a round of innovation in the market. There has been pressure for a long time to improve the environmental profile of the binder, traditionally made from latex, which is an emulsion and can’t be remelted like thermoplastics (nylon, polyester, polypropylene). Now companies are looking a lot harder at ways of greening the SB latex portion of the backing. So far, we’re seeing bio-based content in the filler that is blended into SB latex, which may be greener, but does not entail using less butadiene.

Another polymer used in carpet backing, particularly for carpet tile, is polyethylene terephthalate (PET), which in the industry is generally referred to as polyester. Resin prices for PET have also skyrocketed in recent years, driven by everything from high crude oil prices to shortages of cotton, which tightened the global market for polyester intermediates. Weakened demand contributed to PET price stabilization in 2012.

THE INDEPENDENT PRODUCERS
The independent producers manufacture everything from traditional woven polypropylene primary and secondary backings and nonwoven primaries for carpet tile to specialized urethane cushioned backs and latex systems. With the mills accounting for over 75% of backings production through their vertical integration, that leaves a little over 20% of the market for the independent producers.

At the top of the list is Propex, the global market leader, which has a rich heritage that runs back to the early 1960s when carpet backing switched from natural jute to polymer based fabrics. The bulk of its revenues come from primary and secondary woven polypropylene tape, including a range of specialty and high performance products. In general there isn’t much innovation among the producers of polypropylene tape, but Propex recently came out with a significant innovation, a woven polyester designed for carpet tiles called Isis. Carpet tiles generally use nonwoven primary backings, with polyester as the polymer of choice because of its relatively high melting point (500ºF compared to 320ºF for polypropylene). Propex believes that its Isis product, introduced at NeoCon 2011, offers significant advantages over nonwoven backings, including improved stitch lock, more mendability and higher through-put. 

Isis, which features over 85% post-consumer recycled content (from drink bottles), also offers an advantage when it comes to dyeing. According to the firm, its superior stitch lock means that carpet tiles can be beck or continuous dyed, rather than only pre-dyed, since the product can withstand the wet process. The same feature allows for the creation of more complex patterns, as well as patterns to match broadloom.

In October 2012, the firm received the patent for the technology behind EX3, its lightweight primary carpet backing made of uniquely textured polypropylene tape. The construction allows for high resolution carpet patterns, despite the lighter weight of the backing. 

Recently, Propex moved its company headquarters into a stylish converted warehouse in downtown Chattanooga. The urban space, which features hardwood and carpet tile (including Mannington carpet tile made with Isis), is also green, with lots of natural light, interior glass walls and low wattage lighting.

Carpet backing accounts for 30% of Propex’s revenues. The rest comes from geotextiles and performance fabrics. In addition to Ringgold and Hazlehurst, Georgia, the firm has production facilities in Brazil, Mexico, Hungary and Germany.

Mattex has been around for less than a decade, but in that time it has succeeded in gaining significant marketshare in Europe, the Middle East and the U.S. The firm, which is headquartered in Dubai and manufactures in both Dubai and Jeddah, Saudi Arabia, specializes in woven polypropylene backing. Sales in the U.S., the firm’s biggest market, were up by double digits last year. 

In the U.S., residential business accounts for about 85% of sales, and it’s 97% primary backing. However, the firm is building a plant for secondary backings that should be operating by the end of this year.

Mattex’s woven polypropylene comes in beige, charcoal and black, and a range of widths, including wide widths. It also has specialty products like EqualMatt, which has a guideline to ensure straight tufting.

This quarter, the firm is adding about 225 million square feet of capacity. The firm recently opened an office in China, a big growth market, and also consolidated its two Dalton warehouses into a larger combined space (100,000 square feet). Its U.S. offices are in Calhoun.

Etex, another Middle Eastern producer, focuses on the residential and multi-family markets, where it generates 50% to 60% of its revenues. The firm doesn’t target the commercial market, but it does do a lot in the rug market with partners like Maples.

Last year revenues were about flat in the U.S. market, but Etex anticipates solid growth this year, and the firm is prepared with more production capacity. The firm notes a change in product mix, with a steady shift toward lighter weight backings.

The U.S. is Etex’s biggest market, followed by the Middle East and Europe. The firm offers picks ranging from 11 to 18, and some of the higher picks are suitable for the commercial market.

Don & Low, which is based in Scotland, channels its products to the U.S. through Dalton’s Norville Industries, a family business that’s been around for 57 years. Don & Low, the oldest backing producer, has been around for more than 220 years.

Overall, 2012 was a strong year for Don & Low’s U.S. business, with double digit growth. The firm sells polypropylene primary and secondary backings, mostly to the residential market. Norville Industries, which also supplies everything from sewing threads to packaging and baling wire, expects double digit growth this year as well.

Another growing operation is Carpet & Rug Backing and Supplies (CRB), which also makes woven polypropylene primary and secondary backings. CRB manufactures in Birmingham, Alabama and uses a Dalton warehouse for distribution. The firm focuses on service to compete against low-cost imports.

Colbond is a specialty producer, manufacturing spunbonded nonwoven primary backings for carpet tile. The backings are made of polyester (PET) in a thin nylon sheath for improved stitch hold and dimensional stability. The firm also sells its products to the automotive flooring market, and it has a small presence in patterned broadloom and synthetic turf.

Last year was a growth year for Colbond. It participates in a category (carpet tile) that is continuing to gain share, mostly from broadloom, and even manages growth during slow economic times. The firm added 5% capacity in early 2012 and followed that with another 25% in October. Colbond is also eyeing investments in operations in Asia to support key accounts with international business, like Shaw, Mohawk, Tandus and Milliken. Currently, the firm produces its primary backing in the Netherlands, where it is headquartered, in Asheville, North Carolina, and in China, where it has a joint venture.

Colbond’s Face2Face backing, introduced a couple of years ago, is dark on one side and light on the other. The construction increases operational efficiencies and reduces waste, and it’s starting to gain the attention of leading carpet tile mills. 

The firm is also coming out with another product called ProFloor, a nonwoven where the polyester is sheathed in polypropylene rather than nylon. The product improves stitch lock and stability. Production of ProFloor is being scaled up this year.

Dow Chemical Company is the producer of the Enhancer and Enforcer urethane backing systems—Enhancer is the cushioned system while Enforcer is harder and more dimensionally stable. In addition to carpet, Dow’s systems are used with synthetic turf and underlayment. The high performance systems are widely used in the carpet industry. Some of the mills have their own polyurethane coating capabilities, and others go to commission finishers like Textile Rubber.

Dow has been working on post-consumer and post-industrial recycled content in its products—percentages range depending on the application—and it also offers backing systems with renewable content.

At the beginning of this year, Textile Rubber and Chemical Company created a new polymers group within the company called TR Polymers Group, consisting of the Polymer Technology Group (latex chemicals), the Polyurethane Group (polyurethane chemicals and backing systems) and the ThermoTex Group (thermoplastic polymers and coatings). The strategy is to provide customers with a streamlined way of accessing the firm’s entire offering, while also providing the firm with a clearer focus for everything from research and development to product marketing.

Mark Cline, general manager of the Polyurethane Group, has been promoted to run the new group. Cline has been with the firm for 28 years.

Textile Rubber is best known in the carpet industry for its line of both residential and commercial performance urethane systems, including KangaTrac, KangaHyde, KangaBack and Epic.

Sister companies Global Textile Services and Textile Coating have been incrementally incorporating Cargill’s BiOH Fusion into their latex programs since August 2010. BiOH is a latex displacement system with high bio-based content. Currently, the firms offer displacement levels as high as 30%. Apparently, some mills in Europe are going as high as 50%.

For about a year and a half, Global Textile and Textile Coating have also been working with another of Cargill’s BiOH Fusion products that displaces natural rubber, and that’s used for everything from rug underlayments and nonskid backings to embossed products like kitchen mats.

Universal Textile Technologies (UTT), also a sister company to Global Textile and Textile Coating, is best known for its BioCel and EnviroCel backings with high recycled and bio-based content. The firm, which has offered bio-based content for years, has been manufacturing its own bio-based polyols in Chatsworth, Georgia for over a year. 

UTT’s Dalton recycling center, which has also been in operation for over a year, recycles a range of materials—including nylon, polyethylene (PET) and polypropylene, blending them into pellets with 90% recycled content—derived from post-consumer carpet, internal salvage, lint from shearing and synthetic turf.

The firm is increasing the use of its extruded fiberization bonding technology on its laminate system. The technology adds delamination strength while increasing pliability and flexibility. On average, it reduced the weight of products by a pound per square yard. 

UTT has also created a residential cushion tile that is being launched this month by Mohawk Home. The product, made from EnviroCel technology, is expected to perform well in big box stores. 

However, the big news at UTT is that the firm has acquired Constantine’s PVC carpet tile line from Milliken. The purchase includes all the components of the tile finishing line, enabling UTT to produce a range of state-of-the-art options for backing systems.

Omnova Solutions, which produces latex products, has been researching alternative chemistries ever since the price of butadiene started soaring. The firm is close to commercializing an acrylic based alternative—it’s doing customer trials this quarter and hopes to start conversions in the spring.

Two years ago, Omnova acquired Eliokem International, a global producer of specialty chemicals and polymers, including coating resins. According to Omnova, the acquisition—reportedly to the tune of $300 million—has been ideal, since Eliokem has a global footprint and Omnova focuses on North America. The firm has already been able to enhance existing product lines and get into new product lines in its new global markets.

Revenues were about flat last year, but more growth is expected this year, largely from the residential market, where it does the bulk of its business.

Styron, which used to be part of Dow Chemical, is another leading latex producer. Over the last year, as butadiene prices have come back down—at least for now it’s less expensive than styrene—mills have been able to use a larger percentage of styrene butadiene in their coatings, helping SB latex regain some of the share that it lost in the previous couple of years. Most of that share was lost to vinyl acetate ethylene latexes. 

The willingness to explore other chemistries has helped spur the development of alternative chemistries, including greener formulations. The firm is currently testing out a product with bio-based content.

Styron’s Enversa Cushion Technology, which has been out for close to three years, offers a carboxylated latex process that uses fewer chemicals, including heavy metals, than the traditional latex vulcanization process. The product has seen more success in Europe than in the U.S., likely due to more stringent air quality standards, among other factors.

THE MILL PRODUCERS
Interface, which makes only carpet tile, has a PVC hardback called GlasBac, as well as GlasBac RE, its high recycled content product reclaimed through the firm’s Cool Blue process. This year the firm reclaimed about 30 million pounds of waste through its LaGrange, Georgia recycling plant. 

As part of its strategy to displace virgin GlasBac with more recycled content, Interface is increasing capacity in the recycling plant and the Cool Blue process. Currently, about 50% of all the product Interface ships is recycled or renewable product. Total recycled content, both post-industrial and post-consumer, ranges from 40% to 73%.

The firm’s TacTiles installation system, using panes of clear PET to attach tiles to each other instead of attaching them to the floor with full spread adhesive, continues to gain traction, and the firm estimates that TacTiles are used in well over half of all current installations.

Shaw’s EcoWorx carpet tile, which is 100% recyclable, just passed the quarter billion mark in square yards installed in the commercial market. The EcoWorx polyolefin backing was first introduced in 1999, and it features 8% post-consumer and 36% post-industrial recycled content. Shaw followed up EcoWorx Tile with EcoWorx Broadloom and EcoWorx Performance Broadloom, with 20% post-consumer recycled content and the same cradle-to-cradle capability.

Part of the EcoWorx story is Shaw’s Environmental Guarantee, which ensures that all products will be collected and recycled by Shaw at no cost to the client.

Another big story at Shaw is LokDots, the pressure-sensitive adhesive beads that provide an alternative to full spread adhesive. All installers have to do is position a handful of the beads on each tile, then attach the tiles to the floor. According to Shaw, using LokDots translates to a 97% reduction in installation materials compared to traditional wet adhesive. So far, more than 70,000 square yards of Shaw Contract tile using LokDots have been installed in the education, government and healthcare sectors.

Beaulieu makes its own primary backing for broadloom at its Bridgeport, Alabama facility, and it now uses two Next Generation Recycling machines to recapture polypropylene waste. The machines are akin to small extruders that melt down the polymer and extrude it in pellet form.

The firm’s carpet tile with its high recycled content backing has been doing better than ever since it was reengineered for less weight, added flexibility and improved performance.

Milliken has been manufacturing carpet tile in China for about four years, and over the last year the firm began to make its operation vertical with the addition of a new backing system called b2, which is made out of polypropylene. Apparently, polypropylene is an easily recyclable thermoplastic. Initially, the backing is being made from virgin material, so that the recycled content in the backing can eventually derive from reclaimed b2 backings.

The backing is an alternative to cushioned backing, which is what Milliken mostly uses in the U.S. The firm expects that it will eventually start making b2 in the U.S. as well to cater to clients who don’t want cushioned product. Milliken’s U.S. backings currently use urethane systems.

J+J/Invision, which produces both broadloom and carpet tile, introduced an adhesive system earlier this year called TileTabs. Much like Interface’s system, the tiles are attached to each other with square adhesive tabs for floating floor installations. The system is designed to work for both of J+J’s carpet tile backings: Nexus, which is its PVC backing; and Eko, its polyolefin backing. 

Related Topics:Mohawk Industries, Shaw Industries Group, Inc., Interface, Mannington Mills, Beaulieu International Group