Armstrong to move scraped engineered hardwood to U.S.

Home Inside FCNews Armstrong to move scraped engineered hardwood to U.S.

August 4/11, 2014; Volume 28/Number 4

By Ken Ryan

Lancaster, Pa.—Armstrong’s decision to shutter its Kunshan, China, facility and onshore its scraped engineered hardwood flooring to the U.S. reflects this business reality: The cost benefits of manufacturing in low-wage countries no longer make financial sense.

“With energy and transportation costs accelerating at a faster pace than exchange rates and import fees, it is more cost effective to produce in the U.S. for domestic consumption,” Joseph Bondi, vice president of North America residential floor products, told FCNews. “This is true not just for hardwood but LVT and other products.”

Production will stop in Kunshan on Sept. 30, and shortly thereafter the facility will be for sale, Armstrong said.

About 18 months ago, Armstrong said it invested significantly in its Somerset, Ky., engineered plant, where it manufactures the American Scrape hardwood line. “We now have a team trained in the manufacture of scraped products—two years since the launch of American Scrape—that can make other scraped products in our portfolio,” Bondi said.

After evaluation, Armstrong believed it could make the entire scraped product portfolio in the U.S. at a competitive price with shorter lead times, better customer response—both in terms of product design, performance and service—and a more environmentally sustainable transportation footprint.

The plan is to transition the Frontier hickory product line (now manufactured in China) to Somerset first, followed by the Century Farm, Rural Living and Legacy Manor lines. “Building on our success with the production of American Scrape, we’re able to duplicate Frontier and the other products we make in China in appearance and quality in our Somerset plant,” Bondi said. “This enables us to provide what our customers want at the same time being more responsive to changes in the marketplace.”

Tom Mangas, CEO, Armstrong Flooring, said with the increasing cost of freight and labor in China, it made sense to move its production domestically. “This helps us offset raw material cost inflation, and at the same time we eliminate several months in lead time, and we improve our response to design trends and service requirements. The Kunshan plant has performed well, but the cost and service improvements we can realize by manufacturing domestically make this the smart move for the business. This is an important step in helping us to restore our wood business to an acceptable return on capital.”

The onshoring trend has picked up steam in recent years as manufacturers across all industries, including flooring, are considering costs beyond labor, including supply chain risk, transportation and increased productivity through automation. Over the next decade, the Boston Consulting Group projects $100 billion in manufacturing will return to the U.S.

A byproduct of onshoring is the creation of jobs in the U.S. The transition from Kunshan, when complete in 2015, could bring 80 additional jobs to the Somerset facility, according to Armstrong.

“We are excited about the opportunity to provide improved service and inventory flexibility with a domestically made product, in addition to supporting the U.S. economy and job force,” Bondi said. “A lot of lumber is shipped out of the U.S. into China to be reworked. Lines like ours give an advantage to U.S. manufacturers on the solid side and on veneer prices that are shipped into the U.S.; it should give a boost to U.S. manufacturing. Most of our plants are in towns smaller than this. It is great to have an impact on a community like [Somerset].”

Must Read

NWFA launches new program

St. Louis, Miss.—The National Wood Flooring Association (NWFA) has launched the NWFA Engineered Wood Flooring Refinishable Program, which identifies these wood products with wear...

CARE carpet charges increase in California

Dalton—Differential assessments currently charged on all carpet sold in California are expected to increase on Jan. 1, 2023. California law requires CARE, as the...

COREtec’s Soft Step is patent pending

Dalton—COREtec’s new attached underlayment, Soft Step, is patent pending. The leading waterproof brand launched the innovative underlayment in early August as a solution to...

How to attract great talent during a labor shortage

(This article was originally published on forbes.com and has been edited for content and style.) The pandemic has been hard on businesses in a multitude...

Daltile launches Synchronic collection

Dallas—Daltile launched its new Synchronic porcelain tile collection that delivers a stylish, minimalist concrete visual and embodies the popular interior design trend Noble Simplicity—where...

Mohawk releases new ESG Report

Calhoun, Ga.—Mohawk's 13th annual Environmental, Social and Governance (ESG) Report highlights the company’s internal and external partnerships that are driving its commitment to achieving...
Some text some message..
X