Focus on Leadership - April 2013

Interview by Kemp Harr

Dr. Svend Hovmand, chairman emeritus at Crossville and still one of the leading advocates for the tile business, was instrumental in establishing the first porcelain tile production in the United States. He joined Crossville’s board when the company was founded in 1985 and served as president of the company for 16 years, starting in 1989.

Hovmand has impressive credentials, having earned his PhD in chemical engineering at the University of Cambridge in England, in part through a grant he received from the Danish government. Hovmand’s area of study specialized in fluid bed technology, which ultimately is the technology used today to efficiently mix the different clay materials used to produce porcelain tile. Hovmand’s first career position, after spending some time as a resident professor at Cambridge, was with a Danish firm called Niro Atomizer. At the time, Niro Atomizer was making industrial dryers to manufacture products such as coffee powder and milk powder.

Eventually, Niro’s focus expanded beyond food and dairy applications and into more industrialized applications like the production of ceramic materials. Hovmand was appointed president of Niro Ceramic, and a few years down the line the company worked out a joint venture arrangement with the Curran Group to build a ceramic tile plant in Tennessee.

Hovmand was born in Denmark in 1939 and married his wife, Beverly, in 1966. He has two sons, Peter and Lars. One is a professor at George Washington University; the other owns a business that supplies electrical systems to NASA.

Q: How did you end up here in the U.S.?
A: In the ’70s and ’80s Niro Atomizer was supplying drying equipment, spray driers and fluid bed driers all over the world, and Niro started its own U.S. operation in 1974. In 1977, Niro moved us from Copenhagen to Maryland. At that time, my focus was on the company’s U.S. and Mexican projects for producing ceramic tiles and bricks.

Q: How did your focus shift to the porcelain tile market?
A: Niro purchased an Italian engineering company in 1980 that was supplying turnkey ceramic plants. This led to Niro developing the first porcelain tile plant in the world around 1980—which they located in Switzerland.

Q: Under your leadership, Crossville built the first full-scale porcelain plant in the U.S. before the product had been fully accepted by the market. How did you know that was where the business was headed?
A: Niro started selling the unglazed porcelain tile based on the production in Switzerland. There was an enormous interest in this new tile in the A&D community because it offered a superior abrasive-resistant floor surface and because it could be polished.

Q: How did the plant that is known today as Crossville end up being located in Crossville, Tennessee?
A: The highest quality raw materials for porcelain tile are located close to Tennessee, and from a distribution standpoint Crossville is centrally located to two thirds of the U.S. building industry. We chose Crossville specifically because the town offered us favorable financial support; it worked very hard to get that financial package for us. At the time, Crossville had plenty of available labor, and the climate was attractive.

The town was also an open place with a population of diverse backgrounds—many Northerners had been retiring there because of the climate—which made it welcoming to newcomers.

Crossville was the only porcelain tile plant in the U.S. from 1985 to about 2000, the only domestic producer. That was really a tremendous advantage for us.

Q: For calendar year 2012 here in the U.S., ceramic tile has outpaced the other surface categories for revenue growth. Why do you think ceramic tile is growing faster than all other flooring types?
A: I think that the versatility of natural looking designs, the cleanability, and the larger sizes of tile available today are all creating a growing interest in using tile for many types of installations.
In addition, more flooring retailers are dedicating a significant portion of their retail space to ceramic tile now. Consumers no longer have to visit a store that specializes in tile to see the product. This increased exposure in the market contributes to its growth.

Q: The per capita usage of tile in the U.S. is lower than in any of the other developed countries around the world. Why have Americans been less apt to pick tile as a floorcovering in the past, and what is the industry doing to increase the popularity of tile as a flooring surface?
A: Initially, carpet and vinyl products were more effectively marketed in the U.S., where there is not a tradition of using tile. The tile industry has been and, for that matter, still is very fragmented, and the market has the perception that tile is difficult to install correctly. The customer is buying an installed floor and wants one company to be totally responsible for the end result. To the extent that we can overcome this negative perception in the market by supplying quality installations with beautiful designs, we will grow as an industry.

Q: How will Mohawk’s acquisition of the Marazzi Group change the landscape of the tile market here in the U.S.?
A: Mohawk’s acquisition of the Marazzi Group is creating a truly global company with strong ties to the Italian know-how in designing and producing tiles. This should definitely strengthen their position going forward. However, it is much too early to say how much this will change the tile market in the U.S.

Q: Since you stepped down as the head of Crossville, you have remained committed to nurturing the industry for continued growth. What are the key issues that you are focused on today, and where do we stand on solving them?
A: I am working closely with Tile Council of North America (TCNA) on a number of issues: standardization of tiles, including thin tiles; training and certification of tile installers; and Coverings.

One key issue presently is the installation of thin tiles (less than 6mm thick) on floors. This is a controversial issue, and, unfortunately, we have no standards developed for the installation of these thin tiles, which require very precise installation procedures, particularly for floor applications. We hope to have at least some guidelines for installation of these tiles later this year.

Another key issue is the efforts made by the tile industry to improve the general quality of tile installations. The Ceramic Tile Education Foundation (CTEF) has certified about 1,000 tile installers in basic installation techniques and is now taking this to the next level by offering advanced certification for the tile installer. This is a partnership between two contractor associations (NTCA and TCAA), two training/education organizations (CTEF and IMI), a union (IUBAC) and a trade association (TCNA), and this is the first time that union and non-union organizations are working together to improve the quality of tile installations. This is significant and a very hopeful sign of cooperation in the spirit of improving the quality of tile installations.

I am still involved in Crossville’s seminars for their distributors, and I have recently been involved in integrating a ventilated façade system into the U.S. market. The system was developed and supplied by Shackerley, a British manufacturer of products to the architectural and construction industries.

Q: What trends are you seeing in the tile market?
A: The sizes of tiles are obviously getting dramatically larger, and the amount of grout, the weak point in any tile installation, is diminished.

Decoration technologies have improved, so we are now able to produce very natural-looking tiles, either unglazed or glazed. The new inkjet technology is offering the tile maker total flexibility in design.

Thin tile technology is very promising and will enable the tile industry to introduce this tile in a number of applications that are not currently using tile.

Rectangles are a trend that has definitely emerged over the last few years. We have the machinery to make a square tile and break it down into other shapes. This technology is not even ten years old.

Q: Do you believe the assertion that American consumers would rather buy domestic products?
A: Everything being equal, the consumer prefers domestic products. Tiles made in Italy have been a market leader for many years; however, it is uncertain whether that will be true going forward. Tiles made in China and Mexico are taking over the low end of the market, and, as they improve their looks and quality, their marketshare could become even bigger, as long as they can keep their price advantage.

In the recession, we had an upsurge of marketshare of American producers. Distributors were unwilling to have vast inventory of imported materials, so they relied more on U.S. production. That is one reason why we are seeing more American-made tile today. Also, Italians have built more plants here, so there is more modern technology for tile making in the U.S.

Q: We have seen a trend in the last decade where manufacturers like Daltile and Crossville have either purchased their distributors or focused on building their own network of company-owned stores. Will that trend continue, and what is behind it?
A: Daltile has a complete delivery channel through its own distribution points. Crossville has developed a number of branches over the years; however, this should be looked at as a defensive move. Crossville values the local/regional independent entrepreneurship that most often characterizes the successful independent distributor. However, sometimes it is very difficult to achieve a good match between the agendas of the independent distributor and Crossville.

Q: What does it take to be a good leader?
A: A good leader must be customer-focused and must treat employees with respect and integrity. But, perhaps most importantly, a good leader must be an agent of change. A leader has to be able to recognize when change is necessary, communicate the need for change to his or her company, and then effectively implement those changes.

Q: Do you believe that the tile market will continue to provide rewarding career opportunities for young people who are just starting their careers today? What advice do you have for them?
A: There are plenty of opportunities for a good career in the tile industry. It is still a developing industry, and hopefully it will grow back to the level it was before the recession. For people without a college degree, the tile installation business offers a well-paid job that can lead to many other types of jobs in the industry.

Q: What do you want to be known for?
A: Within Crossville, I would hope to be remembered as being very quality-conscious and for improving the quality of all the aspects of our business.

Q: It’s no secret that you spend many of your vacations sailing. Why are you drawn to this form of recreation?
A: I have sailed since I was a little boy, so being on the water is very important in helping me maintain some balance in a traveling and busy life. Sailing under sails is, for me, one of the most effective ways to relax.

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