#BizTrends2017: Flooring market is moving but the basics are not
Dr Mehran Zarrebini, CEO of PFE International and Van Dyck Carpets
Is the market moving towards different types of flooring in South Africa?
Yes, the market is moving but the basics are not changing.
In the residential market, the use of carpeting has declined with consumers selecting ceramic tiles, laminated and vinyl wooden planks in the main areas and only fitting carpeting in bedrooms.
Commercial markets continue to select carpeting as more businesses adopt open plan office space. Carpeting is warmer and absorbs sound so there is less noise and echoing.
Exciting new products are being introduced in South Africa, with new types of carpeting developed for specific use; luxury vinyl being manufactured in parquet planks and woven vinyl flooring.
Woven vinyl flooring which is manufactured from strips of vinyl that is produced in sheets and cut into tiles is flourishing in the international markets because it is hard wearing, washable and comes in a wide range of colours, patterns and different shapes (triangle, wing-shape, hexagonal and octagonal shapes). This product gives flexibility in choice where a neutral base is brightened by a bright solid colour or pattern blocks to customise the flooring design. Known as décor flooring, it is popular in all markets.
Customers want something different, as well as a variety of options, and for their supplier to be flexible and able to supply quickly – companies that can meet these needs will grow. Customisation is the way of the future.
Are foreign trends affecting our markets?
Definitely - although South Africa only lags six to twelve months. A decade ago it was longer, but with widespread access to the internet, many companies have partnerships with overseas companies ensuring they are on trend.
Partnerships across all fields of flooring have allowed us to purchase what is required for distribution through our networks resulting in a growing market share.
Manufacturing has changed; previously a manufacturer would only produce what they prefer, now there is the opportunity to buy from a variety of sources meeting the consumer demand for a varied product offering.
To ensure a company stays competitive, it should adapt its business model. It isn’t always economical to manufacture locally as some machinery and raw materials need to be imported and because of the lower volumes for certain niche products, it makes more sense to import them.
Diversification is important and the ability to buy products from overseas manufacturers that can produce competitively to service the local market is key. Forming strategic partnerships and alliances with leaders in floor coverings adds great value.
Is the market demanding environmental and sustainable materials and how is Van Dyck Carpets incorporating these requests?
The commercial market demands products which incorporate recycled content for manufacturing environmentally friendly products. Prior to being asked to tender, we are required to qualify by supplying our accreditation.
Our philosophy has always been to tread lightly on our planet, and this thinking has been implemented across all group companies. Van Dyck Carpets has implemented several environmental certifications, making this a priority. The company has achieved ISO 14001 and ISO 14064 (Green House Gas Management). Attaining The Carbon Trust Standard for Carbon was a major achievement. More recently, implementing ISO 50001, which covers energy management systems including management of resources - water, electricity, gas etc., committing to reducing the carbon footprint by 30% in three years is recognised by large corporates attempting to achieve a Green Star rating. Van Dyck Carpets’ products qualify for Green Star rating.
Partner companies, suppliers and overseas companies also have environmental management systems in place with many incorporating recycled raw materials.
Sustainable initiatives are supported by pressure on architects, professionals and corporates who, when building or refurbishing, demand more sustainable products.
Initially, companies who incorporated environmentally friendly products were cautious as there is a 5% to 10% premium in cost, but after five years, they see the benefits, with lower electricity and water consumption. They see it doesn’t have to cost more and the market value of their property is greater.
New products such as exterior rubber flooring manufactured from recycled truck tyres is being well received by the professional industry who want to incorporate more environmentally certified products. This product offers many advantages.
We believe this movement will escalate so strive to improve our status to ensure we are fully equipped for our environmentally conscious clients.
Are manufacturing processes changing? Are you able to incorporate robotics?
Manufacturers should incorporate new processes and machinery for efficiency and resource utilisation to deliver orders faster and meet consumer needs. These processes are more complicated but the consumer is demanding choice, flexibility and speed for flooring as they do in most other consumer products.
This pressure on production requires more working capital and a flexible work force and comes at a cost to stay competitive.
By constantly analysing the market, a manufacturer can offer the right product at the right time which will give the company a competitive advantage. Where the market is small we import finished products to save the capital investment.
What are your thoughts on the future of flooring?
It is a consumers’ market, customers want options so design, colour, flexibility and speed of delivery are all important.
Previously, residential markets comprised 60% carpeting, with bathrooms and kitchens using another type of flooring. At present, consumers select laminated wood for living areas, with vinyl which is waterproof in the bathroom and kitchen, using a carpet only in the bedrooms. Exteriors comprise ceramic tiles, wooden decking and artificial grass.
With extreme weather conditions in South Africa, artificial grass is being included in landscaping. The artificial grass market is growing as consumers appreciate the benefits of a good-looking lawn with low maintenance and no watering required, which is important now that South Africa is going through one of the worst droughts in more than 30 years with consumers facing water restrictions in most provinces. Over and above, in high density city blocks with less green space, there is an option to provide green space using Easigrass on patios and verandas.
Dr Mehran Zarrebini is CEO of PFE International with 15 years of experience in startup, buyout, turnaround and international sales. He's worked in the flooring, plastic extrusion, property and recycling industries in South and Southern Africa. Zarrebini has helped organisations innovate and develop unique and efficient business processes, enabling them to be transformational in their industries. The outcome is organisations with powerful brands, inspiring cultures, and increased financial performance.