It was my last day in Hangzhou
after a whirlwind week attending the China Wood International conference and
touring factories. My wallet was filled with Yuan-the pink and purple Chinese
currency bearing the stern but benevolent face of Chairman Mao. I had not
gotten around to spending most of what I brought over and the prices were
irresistible. But what to buy? With the exception of a Harry Potter book
translated into Chinese I saw virtually nothing I could not find back home.
Saving money is always nice but I wanted something unique, something special,
something you could only get in this part of the world. It turns out, I quickly
learned, China is well past that.
As far as
the North American flooring industry is concerned the 6,500 miles that separate
the east coast of China from the west coast of America might as well be a few
exits down the freeway. The factories I toured were modern, squeaky clean
facilities. They were beehives of activity and models of efficiency. The
workers seemed to take great pride in what they were doing. There was a lot
that seemed odd to my American sensibilities: the language, the customers and
endless rows of old beat up bicycles parked outside (Then of course there was
the food: copious and delicious but often indecipherable.) The packaging on the
boxes being used for wood flooring was familiar enough. Brand names common on
this side of the Pacific were prevalent. In fact much of the writing was in
English-not just in the factories but on the streets. China’s manufacturers,
for the most part, have looked past the rapidly developing domestic demand in
China in favor of foreign markets, especially the U.S.
Production-wise
China seems to be firing on all cylinders. The Summer Olympics are slated for
Beijing next year and business is booming. The BBC, for example, recently
identified the oil company PetroChina as the largest company in the world. Its
estimated market value of $1 trillion is more than twice that of the No. 2
company on the list, Exxon Mobil. China’s growing clout was evident nearly
everywhere I looked from the construction sites that are nearly ubiquitous to
the determined and sharply focused executives I met during visits to five factories.
The message they wanted to send back with me to the U.S. was they stood ready
to meet the demands of the US flooring market whatever direction it goes.
As mission
statements go that sounds great. But what about the environmental concerns that
have become so prevalent in our industry? While there are certainly flooring
companies in China that have attempted to set themselves apart by addressing
this growing concern-as a whole, this
nation of more than 1 billion people has a lot of work to do on this
issue. Consider the comments of one of the speakers at the conference, Yao
Changtian, of China’s National Forest Product Industry Association. While he
urged the “Virtuous development of [the flooring] industry” in the next breath
he lamented the “contradiction between economy and ecology.” Through I was
listening to him through an interpreter he seemed to be suggesting it was an
either/or proposition. U.S. manufacturers will tell you that is a very outdated
mindset.
And what
about lag time? One American distributor working the show floor said product he
could get in a matter of days in the U.S. take weeks to arrive from China. “And
when they do show up, too often it is not what you expected.” On the product
level, many manufacturers seem so determined to produce flawless product that
they end up with hardwood flooring that is visually indistinguishable from
laminate. And remember, China has so decimated its forests that its role in
flooring is to import raw lumber from other countries and craft it into flooring.
So essentially China’s chief selling point is efficient production facilities
and inexpensive labor. If the countries supplying the raw material figure out
how to do that on their own what will that mean for the future of China’s
flooring business?
Yes there was much to digest
during my week in China. I did hear one rather encouraging statistic about the
future of our industry. During a highly informative presentation about industry
trends, Stuart Hirschhorn, of Catalina Research, wanted to give a sense of the
potential that exists: If everyone in the world bought a 4’x 5’ piece of
flooring-roughly the size of a small area rug-he calculated that that would
translate into 139.6 billion sq. ft. In any language, that is a lot of
flooring.
China flexes its muscles (But is that enough?)
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