Rigid LVT Producer Update: A strong residential market from the spring through year’s end sustained rigid LVT momentum in 2020 - Feb 2021
The rigid LVT category is not only still growing and developing at a breathtaking pace, but it also shows no sign of settling into any kind of final form. New constructions abound, new formulations, new polymers and minerals, and while the U.S. market continues to be inundated by endless streams of products made in China despite the tariff imposition, the most significant trend in the industry is probably domestic production.
Until 2019, all rigid core products were made in China, but there has been a huge wave of investment into domestic rigid LVT production in the last couple of years, with at least 11 firms building U.S. facilities, and half of them are already producing flooring for sale. Vietnam has also emerged as a site for SPC manufacturing, with varying results. And there’s some capacity in Europe-Mohawk, for instance, has SolidTech SPC produc-tion in Belgium.
The vast majority of rigid LVT is installed with locking systems, and this characteristic has been instrumental in the category’s growth. Floating floors with click systems are by and large eschewed in the commercial arena, often because they can’t meet the performance requirements, but also because specifiers and commercial contractors are more risk-averse than their residential counterparts, given that their projects are larger, costlier and come with greater liability attached. On the residential side, it has been a winner all around. At a time when there’s a serious lack of experienced flooring installers, click-system floor installation sets the bar attractively low, which also makes it a great DIY product. And the marketing around the waterproof aspect of rigid LVT-which in truth is no more or less waterproof than flexible LVT-has been the engine driving the category’s explosive growth.
Consequently, the market has shifted, with flexible LVT vol-ume retreating from the residential market and rigid LVT gaining only marginal traction in the commercial market. Today, com-mercial LVT is at least 95% flexible and glued down, and in the residential market, which is about twice the size of commercial, flexible LVT accounts for an estimated 67% of the LVT market.
In terms of momentum, just like flex LVT was taking share from all the other hard surface categories, and even carpet, before the advent of rigid LVT, now SPC has assumed the role and accelerated the pace, plundering share not just from the other flooring categories, but also from flex LVT and the other major rigid core category, WPC.
The risk that this category faces is commoditization. SPC is the least expensive rigid LVT, and it is taking over the market at an alarming rate. Those who have been in the industry long enough recall how this went with laminates, where the race to the bottom took out most of the high-quality producers and decimated domestic production. What’s occurring now with SPC is akin to laminates on steroids.
WPC is strongest in the residential remodel category, and it’s also finding some traction in apartment buildings, Class A and Class B properties that are willing to invest in its sound-deadening properties and comfort underfoot. And there’s a niche for it in hospitality for the same reasons, though that sector is, understandably, fairly dormant right now.
In early December, the Resilient Floor Covering Institute (RFCI) and its 22 manufacturing members announced a consumer and trade campaign promoting resilient flooring, including a robust social media program.
RFCI covers not just vinyl flooring, but also rubber, linoleum and cork, as well as PVC alternatives, a growing category. To find out more about the campaign, visit beautifullyresponsible.com.
SPC’s biggest gains have been in the single-family builder market, where it’s quickly taking over the hard surface square footage. It’s also making some inroads in multifamily, and it’s growing in residential remodel, as well.
Most of the domestic production coming online is going toward private-labeled products, not manufacturer brands, and most of it is SPC. Some of these domestic manufacturers that have no brand presence in the U.S. even private label to other higher profile U.S. manufacturers that are themselves starting to produce rigid LVT domestically, because all of the leading flooring companies still heavily rely on external sourcing. Current domestic capacity is still only a small fraction of domestic consumption.
To their credit, many of the leading manufacturers are working to add value to their products, with enhanced acoustic pads, higher levels of scratch resistance, real wood veneers and new constructions. But, like laminates, value-added rigid LVT (including WPC) may find itself wedged into a tight layer in the thinnest part of the market, pressed from below by commoditized SPC and from above by hardwood and porcelain tile.
Last summer, the exemption on the 25% tariffs on Chinese LVT flooring was eliminated, abruptly cranking up the cost of purchasing the huge volume of rigid LVT flowing from China. But it didn’t lead to the same frenzy and anxiety as when the tariffs were first enacted in September 2018, where everyone rushed to buy up inventory and grappled with what to do about pricing.
It’s still an undue burden on the U.S. market, and it has been impacting margins, to varying degrees. But the market appears to be accommodating it. And no one seems to have the appetite to prognosticate on what will happen with the tariffs under the new administration. But considering that Joe Biden had at one time expressed his belief that tariffs are not his tool of choice for negotiating trade with China, those tariffs could be eliminated down the road. And that could impact the fortunes, and shift the strategies, of the growing raft of domestic producers.
DOMESTIC RIGID LVT PRODUCER UPDATE
Shaw Industries serves the residential LVT market through its Floorté and Coretec brands-Coretec is the origi-nal, patented rigid LVT, first introduced in 2013-and its com-mercial LVT products are sold through the Shaw Contract and Patcraft sales forces. The firm invested in rigid LVT production in Ringgold, Georgia, with its first WPC products rolling off the line in late 2019, and last year it also started up its SPC line. Toward the end of 2020, the firm announced it was building a second SPC line, which should start up later this year.
Shaw offers a third rigid construction using a magnesium oxide core. The PVC-free product, introduced last year, is being launched as Coretec Advanced+ and Floorté Elite, with a thermal resin wearlayer similar to melamine, with enhanced scratch resistance.
Some of the firm’s domestic SPC capacity is being used for commercial gluedown products, targeting markets like hospital-ity, senior living, multifamily and student housing. And at the higher end, WPC is being used in those same sectors.
The firm also has PVC-free products on the commercial side under the Bio-Based Resilient polyurethane sheet program, and it is continuing to develop its PET Resilient Tile to enhance its performance attributes.
Mohawk Industries started producing domestic SolidTech Plus SPC in late 2019, and it also has a SolidTech facility in Belgium. According to the firm, its most innovative products, like those using its new proprietary WetProtect technology, are made in-house, but it still heavily relies on Asian imports. Rigid core products are sold under the Mohawk Home brand, as well as under the Pergo brand as Pergo Ex-treme and under Karastan as LuxeCraft.
On the commercial side, Mohawk’s rigid LVT is targeting the senior living and hospitality markets, but gluedown flex-ible LVT still dominates in those sectors and throughout the commercial market.
Also on the commercial side is Pivot Point, the firm’s PVC-free line of wood, stone and textile visuals. The entire line has achieved Living Product Challenge certification through the International Living Future Institute.
Mannington was the U.S. leader in luxury vinyl before the advent of rigid LVT eight years ago. The firm quickly followed its substantial investments in flexible LVT production with the introduction of rigid LVT programs-and in a short time, rigid sales grew larger than flex LVT sales-and then the construc-tion of rigid LVT facilities in Calhoun, Georgia, adjacent to its commercial headquarters. It started making its first domestic WPC products early last year, and later this year will start SPC production. All of the firm’s gluedown flexible LVT is made domestically.
Mannington anticipates that once its Adura Max WPC facility is firing on all cylinders, it will account for half of its WPC sales. This domestic volume, in addition to sourcing some SPC from Vietnam, has helped buffer the firm from the China tariffs. The lion’s share of Mannington’s WPC goes to the residential remodel market, with smaller volumes to apartment buildings, where the product’s acoustical abatement properties are in high demand.
The firm has also formed a partnership with Microban, a branded chemistry that resists the growth of microbes, that is exclusive in the residential retail channel for all forms of vinyl flooring-Phenix, acquired by Mannington just over a year ago, has a similar partnership for its residential carpet. All new LVT launches going forward will have Microban built in, and it will be the same for sheet products starting in the second quarter.
The firm has also come out with a stair nose system called Simple Stairs in a patent-pending SPC construction. The SPC is sourced, but it is engineered into stair nose by Mannington domestically, and it comes in patterns matching its Foundations SPC styles.
One of the fastest-rising LVT producers in recent years has been Novalis, which has been serving the U.S. residential and commercial markets-Ava for commercial and NovaFloor for residential, along with a sizeable private-label business, including to home centers-through its manufacturing facility in China. Then the firm invested $30 million to build a rigid LVT facility next to its North American headquarters in Dalton, Georgia. That facility, which will ultimately add about 125 local jobs, started SPC production last month.
The firm is offering its domestic SPC to key customers, including specialty retailers and big boxes, across a range of thicknesses and constructions. “We’re trying to stay away from the commodity side,” says Novalis CEO John Wu. Also, Wu reports that the firm also intends to make commercial SPC with a minimum 20 mil wearlayer.
This year, the firm’s new SPC introductions in the NovaFloor line include Dansbee, a line of 7”x48” planks inspired by the lighter, brighter, more modern Southern California aesthetic.
Another firm that has made a mark in recent years is Nox, a South Korean firm formed in 1994 that started producing in the U.S. with a flexible LVT facility in Ohio in 2015 and then built a rigid LVT facility alongside it in 2019 (and doubled its flex LVT capacity). Nox has eight facilities in South Korea and is on the verge of opening a facility in Vietnam, as well.
One of Nox’s unique attributes is its vertical integration. The firm literally makes all of the components of its LVT prod-ucts-wearlayers, print films, cores, balancing layers, fiberglass stabilization sheets and LVT caps. In terms of LVT products, it offers dry back, looselay and click constructions on the flexible side and both click and looselay on the rigid side. The firm also manufactures heterogeneous sheet goods for the commercial market as well as woven LVT through the acquisition of a Korean firm. In the U.S. and European markets, the bulk of its products are private labeled, but it uses its own brand in South Korea. Most of its U.S. business is in the commercial market, though its rigid LVT will mostly be going to the residential side.
Nox is also producing two PVC-free resilient constructions, one polyurethane-based and the other olefin-based. Currently, it’s making PVC-free tile and plank products, but it intends to extend the olefin technology to sheet goods. It’s already selling its olefin-based tile and plank in the U.S. market.
Next up, the firm is looking to start producing in Europe, a strategy that was delayed due to Covid. Belgium and the Netherlands are likely targets.
One of the most dynamic manufacturers is CFL, which was formed in Shanghai in 2004 by Europeans-its president, Thomas Baert, and CEO, Tom Van Poyer, are both co-own-ers-and it made its mark in hardwood and laminate before getting into LVT, first flexible LVT in 2011, then WPC in 2014 from its massive production campus near Shanghai. Now a powerhouse in the global hard surface flooring business, the firm has also shown itself to be nimble. In response to the tariff issues and trade conflicts, the firm quickly built facilities in Taiwan and Vietnam for laminate and rigid LVT production, going online in 2019, and now it’s spending $70 million to build a 250,000-square-foot facility in Calhoun, Georgia, with plans to double its size in the near future.
The Calhoun facility, in the second phase of construction, suffered some delays in 2020, not due to construction delays or machinery shipments, but because Covid-related travel restrictions made it difficult to get engineers over from Europe.
The firm sells its rigid LVT products under the FirmFit and NovoCore brands, and its products are also private labeled through its distributor network. According to Baert, the firm has launched “an acoustic engineered vinyl with a walking sound that is six times quieter than SPC and three times quieter than WPC” that offers industry leading scratch- and stain-resistant coatings. And it’s also working on non-PVC resilient lines that should launch this summer.
Wellmade, with production in Nanjing, China, launched in 2002 as a bamboo flooring producer, then expanded to strand bamboo, but soon after firms like US Floors introduced the first rigid LVT products, the firm shifted gears and focused on the LVT market with its own HDPC (high density plastic composite) core, which is patented in China.
With its HDPC core, the firm makes rigid LVT as well as products topped with hardwood and strand bamboo. Accord-ing to the firm, its core has more flexibility than SPC, which is an advantage when installed over less than perfect subfloors. Wellmade has also developed a dryback rigid LVT targeting the multifamily market. The product, which can be as thin as 2mm and doesn’t require acclimation, has been sold through its distributor network for about a year, and the firm reports good initial traction.
Wellmade is building a $35 million, 325,000-square-foot facility in Cartersville, Georgia that should start churning out product this summer. In phase one, it will product rigid LVT, from thinner dryback LVT to thicker locking products. The goal is to ramp up to a capacity of 80 million square feet-its Nanjing capacity is 60 million square feet.
The firm is also building a facility in China to make floors with magnesium oxide cores that it has developed specifically for flooring. According to the firm, many of the MgO cores being used in the market are not strong enough to handle flooring’s performance requirements. The plan, ultimately, is to produce the boards in China and assemble the final products in the U.S.
The bulk of Wellmade’s flooring is private labeled, including to large national accounts like Home Depot and Floor & Décor, though it will also be sold under the Wellmade name through independent flooring retailers.
Huali, an LVT producer founded in Taizhou, China in 2000, has been supplying the U.S. market with private-labeled 2mm dryback flexible LVT since 2006, but has since expanded to cover a wide range of LVT constructions, including WPC, SPC and flex LVT with peel and stick and looselay systems. Notably, Huali was the original supplier to US Floors of the first rigid LVT product on the market, Coretec WPC, the product that launched the entire category. And the president of Huali is Julian Dossche, son of Piet Dossche, the founder of US Floors.
In late 2019, the firm decided to pursue producing flooring in the U.S., and it settled on a 400,000-square-foot existing build-ing in Chatsworth, Georgia, where it is investing $27 million to build a rigid LVT facility. With most of the machinery already on site, the firm will spend much of 2021 installing the equip-ment and getting it running, and a year from now it expects to be producing flooring for the market. Like CFL, one of the biggest hurdles has been getting technicians in from overseas to help commission the machinery.
Huali’s biggest market is the U.S., followed by Europe, then China. In Europe and the U.S., its products are generally pri-vate labeled, though it sells under its brand name in China and elsewhere. In the U.S., it private labels to some of the largest floorcovering manufacturers and distributors.
Another soon-to-be domestic producer is GreenView Floors, which is part of Nanjing MGM New Material Co., a Chinese producer of LVT and laminate. In December 2019, the firm announced its $26 million investment in a manufacturing facility in Adairsville, Georgia, which will be housed in an exist-ing building.
There’s also Rok Plank, a division of Turkey’s Trusa Tile & Stone, which started producing its version of rigid LVT-stone polymer composite-over a year ago. The firm private labels its products and also sells under the Rok Plank name.
And another is Lico U.S., a C-Corporation formed be-tween Switzerland’s Li & Co and Wisconsin-based Acoustic Ceiling Products that invested just $10 million in late 2018 for a 200,000-square-foot expansion at its headquarters in Neenah, Wisconsin for PVC flooring extrusion, milling lines and ware-housing. Its Hydro Fix rigid LVT product is private labeled for large national customers.
The PVC-free market is a niche right now, but centered as it is on the healthcare segment, it’s a niche with lots of room to grow. Almost all of the larger resilient flooring pro-ducers offer some vinyl alternatives or are working on getting there-or have tried and failed and will try again. And they’re using a range of polyolefins (including PET), polyurethanes, EVA (ethyl vinyl acetate) and proprietary blends-all chasing PVC’s robust performance characteristics.
By most accounts, the quality of PVC-free products is im-proving. Plenty fall through along the way-that’s part of the process-but they pave the way for more effective and afford-able innovations, and that’s what we’re starting to see in the market. Volumes are still low; there’s no mass production of this category, at least not yet. PVC-free is still priced, by some estimates, at least 25% to 30% above comparable vinyl flooring, but that delta used to be a lot wider.
And it’s not just about achieving PVC-like performance at competitive pricing; it’s about achieving it with a greener prod-uct. Whatever alternatives rise to the top will need to provide a clear path to recycling and reuse, so multilayered, multipolymer constructions could be problematic. The PVC-alternative that succeeds will have to be made out of separable components, or at best from a single thermoplastic polymer.
One of the largest LVT producers is HMTX, which is head-quartered in Norwalk, Connecticut with production in China. HMTX comprises the Teknoflor, Metroflor, Halstead and Aspecta brands. The firm makes a range of resilient products, from high-end WPC to PVC-free sheet goods.
HMTX has two specified commercial brands: Teknoflor, which used to primarily focus on sheet goods and now is split about evenly between sheet and LVT; and Aspecta, an LVT brand created about seven years ago that originally went through distribution. Aspecta’s LVT offering includes an hefty WPC called Aspecta Ten. Metroflor is the firm’s residential retail brand, though it also offers some commercial products that it sells through distribution. And the home center brand, Halstead, goes through Home Depot under the Lifeproof name.
Under Teknoflor, the firm offers two types of PVC-free prod-ucts. Naturescapes is made polyurethane with bio-based con-tent, and CS Sheet and Tile uses a mix of thermoplastic polymers with mineral fillers. Late last year, Aspecta came out with Natures Tile and Plank HPD, an expansive PVC-free polyurethane-based line for the American and European markets.
Rolling out this season across the various brands is QuikGrip, a glueless product with gecko-like suction cups for looselay installation-a crossover from a commercial product.
Metroflor’s rigid LVT offering includes the Engage Genesis line, with its proprietary Isocore technology, and its Attraxion line of rigid magnetic LVT that works with its MagneBuild underlayment.
Then there’s Armstrong Flooring, the resilient leader for decades until the large carpet mills decided to get into the game. The firm, with close to half a billion dollars in domestic revenues, produces just about every type of resilient flooring, from commercial VCT, LVT and sheet goods, both homoge-neous and heterogeneous, to a range of residential tile and sheet constructions. The firm manufactures VCT, LVT and sheet goods domestically (some commercial sheet products are made in its facilities in China), and it also sources some flex LVT and all of its rigid LVT.
On the commercial side, most of its LVT is flex, with the exception of Rest & Refuge, a rigid product targeting sectors like hospitality, senior living and multifamily.
Residentially, the firm offers a wide range of rigid LVT con-structions. It has two standard SPCs, Essentials and Vantage, along with a hybrid SPC called Pryzm, with its liquid melamine protective surface. Luxe with Rigid Core is its 8mm WPC of-fering. And it also has Empower, which uses a reinforced MgO core that is free of polymers, with the surface protected with the firm’s Diamond 10 Technology.
Just over a year ago, one of the leading LVT experts in the industry, Dave Thoresen, joined Armstrong as senior vice president, product and innovation officer, and he’s also on the firm’s board. Thoresen’s storied career includes positions at Mannington, LG Hausys, Shaw and Mohawk.
Another resilient specialist with a long and storied history is Congoleum, which finally emerged from bankruptcy late last year with the slate wiped clean on legacy debt and envi-ronmental claims relating to asbestos. The New Jersey-based firm has two sheet facilities and one for resilient tile.
In 2017, Congoleum launched the Cleo brand of PVC-free resilient tile, first on the residential side and then in commercial, where its Red List-free construction and fresh designs garnered a lot of attention. But financial constraints held back fully de-veloping the product line. Now, with its balance sheet cleared of debt, the firm is primed to reinvest in the Cleo brand. Products in Cleo Home, the residential division, are designed for gluedown installation and are also groutable, and it’s likely that ensuing iterations will offer locking systems.
Last year, Congoleum started rolling out Triversa Prime, an SPC construction that replaces the original Triversa, a WPC product. And the firm has expanded its ArmorCore sheet line with two LVT products, a traditional flexible gluedown LVT and an SPC called ArmorCore Plank Pro, targeting the builder and multifamily markets.
Due to growth in the RV and manufactured housing markets in 2020, Congoleum, which has long had a leading position in these markets, fared well last year, entering 2021 in a strong position.
Tarkett NA, a major producer of hard and soft surface flooring for both the residential and commercial markets, is the North American division of France’s Tarkett. The bulk of Tarkett NA’s resilient revenues come from the commercial market, where it has well-established LVT lines, a robust specialized sheet program, and rubber and linoleum programs, as well.
On the residential side, Tarkett makes glass-backed sheet goods in its facility in Canada (Farnham, Quebec) and LVT in Ohio and Alabama. It also sources some flex LVT and all of its rigid LVT. Its rigid LVT program comprises two SPC products: ProGen, a 5mm plank with a 20 mil wearlayer; and NuGen, a lighter-weight, more affordable product that is 3.5mm in glue-down and 4.5mm with a click system, and a 12 mil wearlayer.
On the commercial side, Tarkett announced late last year that all of the firm’s domestically produced LVT is certified Carbonfree through the Carbonfund Foundation. And it is also focused on expanding the use of its Techtonic polyure-thane coating and upgrading acoustic benefits. Also, the firm is expanding its customization capabilities. Most customizable is Collections Infinies, where it can print entirely custom carpet from virtually any source.
Karndean, a major global LVT producer, is headquartered in the U.K., with most of its product made in South Korea through a long-standing partnership, and it also sources from other manufacturing partners in the region. According to the firm, its U.S. business is split more or less evenly between residential and commercial, with LVT in gluedown, looselay and rigid core locking constructions.
This year the firm is expanding the rigid LVT offering in its 20 mil Van Gogh collection, which also includes flex LVT products. Last year it introduced Korlok Select rigid LVT in stone visuals, which it is expanding with a range of wood looks later this year.
Edison, New Jersey-based FloorFolio, which opened up its domestic EnviroQuiet LVT facility in 2015. The glue-down and looselay products, ranging from 4mm to 6mm, are designed for acoustical abatement. The fully array of the firm’s products also includes magnetic flooring and SPC, and its products are sold commercially in healthcare, retail, senior living, student housing and hospitality. On the residential side, it’s mostly sold to the builder and multifamily channels.
Recent introductions include two stone designs, a wood/stone hybrid visual and a midscale chevron design conveyed through planks with angled wood visuals. This year, the firm will come out with non-acclimation flex LVT and EnviroQuiet LVT.
Domestic rigid LVT production is still in its infancy, with imports still accounting for well over 90% of domestic consumption, most of it coming from China. Every major floor-ing producer in the residential market has some sort of rigid LVT product. Hardwood specialists like AHF Products, Mullican, Johnson and even Provenza offer rigid LVT, as do carpet mills like Dixie and Stanton. Another well-established purveyor is Earthwerks, a division of Swiff-Train, a major distributor. Torlys is another. And there are many more.
And then there are newer firms, like Happy Feet, which was established in 2012 and sources rigid and flex LVT from a range of Asian producers. The firm has experienced huge growth in the last few years, with no end in sight.
Also noteworthy is Republic Floor, which has been growing its marketshare among retailers in the laminate and resilient categories in the last few years. The firm, which works closely with a Chinese manufacturing partner, has had huge success with its Pure SPC and beefier Pure SPC Max.
And there are countless others. Some flame out quickly; others find traction. Some don’t seem to physically exist beyond a phone number and an email. Many offer SPC at rock-bottom prices, impelling the market toward commoditization and often jeopardiz-ing the category’s nascent reputation with subpar products.
Copyright 2021 Floor Focus
Related Topics:Mannington Mills, Novalis Innovative Flooring, LG Hausys, AHF Products, HMTX, Tarkett, Metroflor Luxury Vinyl Tile, Armstrong Flooring, Mohawk Industries, Karastan, Shaw Industries Group, Inc.