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Flooring Industry outlook post COVID-19: An Industry View

by Madelein
Flooring Industry outlook post COVID-19: An Industry View

South Africa finally finds itself in Level 2 of Lockdown after being in one of the world’s harshest lockdowns for the past 144 days. Restrictions have finally been relaxed to resemble some form of normality.

However, the impact of the COVID-19 pandemic on South Africa’s already crippled economy is far reaching, with many economists predicting that recovery will be a long, difficult and relentless journey, which many businesses may not survive.

The flooring industry is no exception. We asked some of the country’s most respected flooring specialists to give us their view on what the flooring industry can do to recover post COVID -19. Here are some of the most pertinent views received.

Products for now

Lance Foxcroft, CEO for Ceramics Industry says: “Despite the socio-financial impact of COVID-19 on the market, we believe that Southern African consumers still want to convert their houses into beautiful homes. There is still a strong demand for economical, eco-friendly, hygienic and long-lasting tiles, especially in the new build, renovation and emerging sectors of the market.

At Ceramic Industries, we have undertaken several key steps to support the industry. We recently launched our EcoTec range of tiles that uses several technologies to bring a more eco-friendly, affordable tile option to the consumer. We believe we can continue to add value from the quarry to the consumer’s home, creating more than style.”

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Ploughing Locally

Support local business as much as possible. Buying locally produced finished components or raw flooring materials is another way to stimulate our economy. In doing so, we will enable entrepreneurial flooring companies to gear themselves to develop new product lines from previously imported products. Ploughing our hard-earned money back into local businesses is vital to reviving our country’s dire economy.

“Unfortunately, there will be flooring industry casualties, but we should see this as an opportunity to consolidate the industry into a more resilient and nimbler one, focussed on expanding our own offering, rather than always looking abroad,” comments Jeremy Stewart, Owner & Managing Member for Seamless Flooring Systems.

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Dialogue driven on shared ideas and problem-solving for the future

“Our focus is towards creating and building consistency under these new constraints,” says Edward Colle, Chief Executive Officer for Belgotex.

He sees the most pressing challenge in the next few months as being the local manufacturing industry’s ability to cope with inconsistency and disruptions, which range from changing lead times, delays in global supply chains to local distribution inconsistencies.

Edward positively notes, “Given the industry’s shared empathy, industry players are talking to each other and problem solving as never seen before. The quality of dialogue involving all stakeholders has never been this transparent and pure. It truly allows us to collectively understand what is at play and we are celebrating this as a big win.”

The outlook is good with better than expected demand in the market, so if you can manage yourself and your supply chain well, you will be best positioned to service the demand.

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Be ready for the turning tide

Brian Peterson, Chief Executive Officer for Carpet Brokers feels that it is important to put what SA is currently working through into context. Economically, we have experienced the most drastic decline of the last 100 years, inevitably resulting in a natural consolidation in market spend and numbers of participants across all industries.

“The flooring industry remains resilient due to its demand being created in macro cycles. Even though demand and revenue will not be at their previous levels, we are seeing a more consistent demand than that being experienced by other industries.

The flooring industry is expected to operate at an estimated revenue of between 50–70% of budget, depending on the sector it is servicing. This will no doubt result in an increase in cost, keeping margins under pressure,” comments Brian.

Brian’s advice to business is to focus on the key factors in times like these – manage costs carefully and ensure sustainability while preparing business functions and structures for when the economy eventually turns.

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New shape of things to come

“COVID-19 has been a game changer and I believe a catalyst for getting things going in the construction space,” notes Donald Platt, Managing Director for FloorworX.

He believes the flooring industry will be further whittled down with only the focussed and driven players surviving. However, the industry will become stronger and the government’s focus on enforcing support for local manufacturing will intensify, which will be good for tackling the massive problem of unemployment.

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Emphasis on hygiene

“With an increasing numbers of people working from home due to COVID-19, there is already an increase in demand for new residential flooring to cater for the needs of setting up a home office. The home office needs to provide privacy and isolation from ongoing domestic life to enable the same level of productivity people would normally have at the office,” says Dave Keefer – Exco, KBAC Flooring.

Dave also notes that COVID-19 has resulted in a heightened emphasis on hygiene and social distancing and that these elements will dominate flooring choices now and in the future, for both commercial and office spaces. This will give rise to vinyl and hard flooring becoming the preferred choice as they are easy to clean and sanitise.

The need to demarcate walkways and private spaces to ensure social distancing means that designers are looking to using different shape and colours to conveniently address this need.

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Continued efficiencies and solutions needed

No doubt the last few years have been tough on the flooring industry – facing global recession, a declining economy, load shedding and finally a global pandemic – it could not have been more challenging.

“This is why the local suppliers that are continuously creating efficiencies and initiate solutions through the toughest times have been our focus,” says Marius Maree, Commercial JV Partner with Italtile.

“Not only have we been contributing to the economy, we have been able to secure employment in these challenging times, which is rewarding,” notes Marius.

Our internal focus has seen a change in the way we do business and how we interact with each other, thanks to our commercial team’s embrace of technology and digital solutions, such as online training, project meetings and industry sessions with architects and professionals. The future focus is on innovation to stimulate the growth of our business and the flooring industry.

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We need to dig deep

Polyflor’s Chief Executive Officer, Tandy Coleman says the rest of 2020 will remain difficult, with limited budgets and fierce competition for new orders. Despite the lifting of restraints as we enter Level 2, she predicts COVID-19 controls will continue to hinder construction and normal work conditions given the continued efforts to curb the spread of the virus.

“The South African flooring industry is full of resilient and tough players who will be digging deep to drive the industry forward and get the wheels of the economy turning. You can count on us for that,” she concludes.

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Real out-of-the-box thinking

“It goes without saying that we are in unprecedented times, not only due to the ailing economy, but also because of the massive scourge of local corruption.

Instead of applying the tradition of turning to cost cutting first, genuinely out-of-the-box thinking is what is needed to survive and maintain customer satisfaction in these trying times,” says Shaun Saxby, Target Market Manager – Flooring, with Sika South Africa.

Case in point is Sika’s intimate involvement with the supply of floor coatings to several makeshift COVID-19 field hospitals, using their products to convert farming sheds into hygienic clean temporary medical isolation rooms.

He says that now the focus should be on getting the economy and production started again, to fast-track applications holding up the industry’s supply chain and hoping that both private and public investments will soon improve to create a more prosperous environment.

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Protection is Paramount

Vanessa Botha, General Manager for Gerflor South Africa notes, “We will see two major shifts in the flooring consumer’s behaviour post COVID-19. An increased focus on personal safety and hygiene is the first.”

Vanessa adds that with people’s safety being paramount, consumers will favour products that offer added protection, such as flooring with antiviral properties and patented sanitisers able to reduce the presence of bacteria.

The second will be an intensified focus on the planet and its environment. The impact of daily life cannot be disputed with the lockdown highlighting just how massively humans affect nature. We have seen the return of blue skies, clean air and water to cities previously synonymous with pollution.

“As an industry, we have a responsibility to keep sourcing and developing products, which do not negatively impact the environment as now more than ever, we have a responsibility to deliver green products. Personal protection and that of our planet is key to our future survival”, she concludes.

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Despite these trying conditions, the renovations market in both residential and commercial segments remain buoyant. This is the view of Chaitan Manga, General Manager with TAL.
The team says that they feel that they are entirely geared to support the various facets of the construction industry, both locally and in neighbouring countries.

He aptly concludes with, “As an industry, we must remain committed to supporting our customers and employees beyond our flooring solutions by being caring both now and in the future.”

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Price may dominate

a.b.e. National Flooring Segment Manager, Peter Jones, foresees a positive outlook given their balanced portfolio of flooring systems and continuous investment in new technologies, such as their polymeric flooring range and self-levelling underlays for vinyl sheeting applications. A new range of fast-track coatings and built up self-levelling, which can receive light foot traffic in as little as two hours post application, is also anticipated.

Similarly, the growth of the decorative market due to the increasing popularity of spray on and hand applied systems, given the increase in home owners needing to accommodate office space to work from home, means the domestic market is constantly looking for new, trendy and decorative flooring options.

They concluded that they have been receiving a huge increase in quote, BOQ and specification requests, especially online, but that the market is extremely price sensitive, often resulting in customers looking for cheaper options, which unfortunately is not always fit-for-purpose.

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We could turn it in our favour

In closing, given what has been noted by each of the contributors, one would be seriously mistaken for thinking that the passion, experience, and expertise of our local flooring industry will not be able to ride out this tsunami.

There is a difficult road ahead, no doubt. However, rather than going at it alone, it seems the flooring industry has seen the value of working together as ONE.

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