Chatsworth, Ga.—There are a number of companies currently building facilities in the Southeast to manufacture rigid core flooring, but few are of the size and scope of Huali Floors—a family-owned business that was started by Huashou Yuan in Taizhou, China, back in 2002. Last year, the company invested $27 million in establishing its first U.S. headquarters and manufacturing facility here, with the anticipation of creating more than 300 jobs.
Huali may not be a household name, but that is not necessarily an accident. Aside from marketing its own brand—Pop Top—in China, the company has been manufacturing private-label vinyl for companies such as Shaw, COREtec, Tarkett and Swiff-Train for years to the tune of $360 million in annual sales. It offers a wide range of high-quality product—rigid core, flexible LVT, loose lay, dry back, cushion vinyl, even a peel-and-stick product.
Now, we’re about to see the first U.S.-manufactured Huali products rolling off the line in the second quarter of 2021. The focus will be on rigid/SPC and on supporting existing brands. The operation is being run by Julian Dossche, who carries the title of president of Huali Floors USA, with local knowledge and a local team. The operation will launch with four lines, yielding a capacity somewhere between 3.5 million and 4 million square feet per month.
“Obviously, we want to—first and foremost—support the customers that Huali Floors has built relationships with,” Dossche explained. “In that sense, we will become an extension of Huali China and provide local service to our existing partners. Our ultimate strategy is to build as strong a manufacturing base here in the United States as we are in China, so we can support a wide spectrum of products to all channels of distribution.”
So, what will separate Huali Floors from the pack of companies currently building facilities here? Dossche put it in perspective. “The analogy I like to use is if you look at Formula 1, all the cars are pretty much the same. But what determines who is the best out there is the driver and your pit crew. If you get a 3.2 second pit time vs. a 2.9 second pit time, that little margin is what could make or break landing on the podium or not. So, my focus is working to ensure we have the best pit crew to give us the upper hand. I believe we will have a strong team, and it’s going to be up to us as a team to work together and be the best pit crew.”
Huali Floors will not be without its challenges. “The biggest challenge is we’re a PVC-based product, so right now I see challenges in terms of raw material supply and costs,” Dossche told FCNews. “On the raw materials side, the majority of PVC production in the United States is in the Gulf. And what happens in the Gulf? You get major storms, and major storms can cause disruptions. So, market fluctuations in raw materials are going to be a challenge.”
According to Dossche, in this rapidly recovering economy, labor could be a challenge as well, but he is looking to address the issue locally. “Right across the street, we have a school and we’ve been talking to them about how we can prep kids who might not go to law school or college. We’re going to create very good jobs here with lots of opportunity for growth. We’re looking to partner with schools like Northwest Georgia Technical and Dalton State, Chattanooga Tech, Tennessee Tech. We’re working hard to get our name out into our community and to these colleges and high schools and make them understand, “We’re here, Huali Floors, an innovative and creative new company, looking for great people to build a first-class organization. Come and join our company.”
FCNews recently sat down with Dossche to learn a little more about the company.
What do you think separates Huali Floors from so many other Chinese factories?
It’s very simple. First and foremost, quality. The facility in itself is very well managed and has more than 2 million square feet under one roof. They built a massive lab where they can do anything from sound testing to chemical testing on the raw materials that come in. And then there is the breadth and availability of different products and knowledge of those different products, which allows the customer to one-stop shop, so to speak. One of the things in supply chain, you always are looking for that advantage. Which OEM partner is going to bring a competitive advantage to you that you can pass along to your consumer?
What Huali Floors has always brought to the table is a deep knowledge of the product as well as the manufacturing process. Huali is a process-driven and quality-obsessed team, and I was always impressed that the whole management team has extensive product and process knowledge. This mentality started from the top. It is also impressive to see how family oriented they are as a company. For me, that is an important aspect as it adds a personal layer to the relationship.
As a buyer, you always hope your OEM supplier has a full, extensive knowledge of the product—not just in words, but physically showing that knowledge on how they maintain, even to the slightest detail, that product. Or how they manage within their process so that it’s very organized, very controlled.
So, I would say the fact that quality is, without question, No. 1 in their minds. Are they the cheapest? No. But when we were looking at Huali Floors as a partner, they always stood behind their product. They’re not going anywhere. They have that family aspect. They want to treat you as family as well. And that was important because products are changing, pricing is changing, it’s getting competitive. So, you want to make sure they’re in the trenches with you.
They’re able to easily adapt to market changes?
Yes. They have a full R&D team. So, they’re constantly looking at new material, new product platforms, new ways to manufacture, so they can pull cost out of it. As an example, Huali’s R&D team is at full force in looking at different types of cores. Obviously, magnesium oxide, which is currently in the market under the COREtec Stone brand. The team actually is blowing things up to see what works and what doesn’t work. Where others are more, “Oh, I see what they’re doing. Let me figure out a way to get my hands on it.”
Talk about the decision they made to come to the U.S. and build a facility.
In 2018, we saw the tariffs come online and that sped up the conversation of bringing the manufacturing closer to the customer. Huali has a strong customer base here in the United States as well as in Europe, and the goal was always, “How can we service our customers better?” And one of the biggest challenges in sourcing from an overseas supplier is planning and inventory management. That’s always a struggle, specifically when you have the month of February, where a country like China shuts down for Chinese New Year. So, as a buyer, you’re looking at it and saying, “I’ve got to buy all this inventory just to load up, just to hedge for that one month that I’m not going to have production.”
But with the tariffs in 2018, that conversation became louder. You saw a huge swath of companies in China move down to Vietnam because it was an easier investment. It was a quicker band aid. But Huali didn’t see Vietnam as a long-term investment. If they look at something, they want to invest in it for the long term. So, the U.S. was on the docket. And you didn’t see them make that decision in 2018, nor in 2019. The announcement was made in 2020.
Who determines what gets made here and what gets made in China?
That’s going to be a conversation between our customer, our parent in China and us here to see what best fits. The questions will be, “What are my manufacturing constraints? How much capacity do I have? Who have I allocated that to?” And then, customers will look at it and say what’s important for their end consumer. Is that Made-in-the-USA stamp important? And, geopolitically, is it important? What products do they need? Because there are products where if a customer were to come and say, “Hey, run this now,” I would have to kindly decline because my capacity is not there.
How did Julian get here?
Growing up, flooring was my world. Between my dad and my uncle (Carl Bouckaert, who built Beaulieu of America), I didn’t really know anything other than flooring. And in 2013, when COREtec was being launched into the market, my father said, “I need trusted support where I’m making it,” which happened to be China. So, in 2013, my wife, Rachel, and I moved to China and set up our whole QC logistics, sourcing, international sales and support office group there.
We were using a great company, but Huali came very quickly after, and I got to know Phillip and his father through our business dealings.
In February of 2020, they decided to come to the U.S. But with COVID-19, none of their team were able to be here. So, I stepped in to fill that void. And, in May 2020, they asked me, “Instead of just helping from a consulting basis, why don’t you just come on board full-time and run this whole operation?” That’s when, really, I started looking at how to build this team and become their feet on the street.
The focus we have here as a company is we’re here to stay. We’re going to be locally driven and managed. And the vision that the parent company, the team here and I have is to give another solution to the flooring industry, and then, in the end, to the end consumer. And so, we’re proud to be building something here in the United States, and we’re proud to be supporting a beautiful industry that we all stand on, to be honest.