It is of course known as the land of beer and chocolate, but Belgium is also a world leader in industries that are not as well known among the public. In the first part of a new series, we take a look at the flooring industry.
Carpets, laminates, vinyl and wooden floors – all are products that Belgium is internationally renowned for among those in the know. From large companies such as Mohawk Industries or Beaulieu International Group, which produce a diverse range of flooring solutions, to the Balta Group, which focuses exclusively on carpeting, all are exceedingly innovative and globally competitive. In fact, the flooring industry in Belgium can be considered a genuine cluster – related firms in close geographical proximity which makes for a fertile ecosystem of competitors, suppliers and distributors. There is also an increasing collaboration with schools, universities and research institutes for innovation and testing as well as talent development and sourcing.
Ties Vanthillo, a researcher of regional economics at the University of Antwerp, points out that the diverse range of flooring types produced in Belgium today all share a common origin: the centuries-old cultivation of flax in Flanders. Even today, these companies are heavily concentrated around Kortrijk, Roeselare and Waregem in West Flanders where flax was traditionally grown, and they are also present in Ghent, which has been a major center for textile production since the Middle Ages.
Belgium has not only become a world leader in flooring, but also in other products derived from flaxseed. This is because flax and its byproducts gave rise to many industries today which at first glance do not seem to have much in common with each other. Yet, these industries draw on similar raw materials, technologies and a common knowledge base, according to Mr. Vanthillo. As a result, anything from the production of vinyl (Beaulieu International Group and IVC Group, recently acquired by Mohawk), laminate floors (Beaulieu) and chipboards (Unilin Group, also owned by Mohawk) and mattress products (Recticel or Bekaert Textiles) to industrial and apparel coatings (Sioen and Milliken) or artificial grass (DOMO and Lano), stem from the earlier production of cloth, soaps and oils in the region. Furthermore, many processes that have been developed have fed back into the flooring industry, like textile finishing and dyeing (Masureel Group), coatings for wood floors or the production of linoleum.
Through the years, the flooring sector in Belgium has become extremely competitive, export-oriented and trend-sensitive. This has resulted in some game-changing innovations like Quick-Step’s (Unilin) easy locking system for laminate flooring or Balta’s flatweave or shaggy carpet varieties. Geert Vanden Bossche, Marketing Director at Balta, states that 25% of their yearly profits are from brand new products, meaning the incentives for updating the collection often are strong. Furthermore, 95% of Balta’s output is intended for export, much higher than the already high export rate of 70% for the Belgian textile industry as a whole.
Much of the R&D in the sector occurs in-house, say both Mr. Vanthillo and Bernard Thiers, CEO of the Unilin Group. Although there is actually limited interaction between the R&D of different types of flooring (even within firms), everyone in the business is up-to-date on what their competitors are doing. There are also significant knowledge spillover effects as the mutual suppliers of the flooring companies (especially the machine manufacturers) often introduce technologies and applications which were developed for a certain firm to their competitors. Mr. Thiers remarks that although this practice has its downsides for companies making the initial investment, overall it fosters further innovation as companies can use the machines in all sorts of new ways that can be kept secret or patented.
Mimi Lamote, Chief Marketing Officer at Beaulieu International Group, notes that since intellectual property rights have toughened in the last few years, this form of knowledge transfer through suppliers is not as common as it used to be. Ms. Lamote cites the promising partnerships that are being forged with international universities and research institutes, along with longstanding cooperation with the Belgian Textile Research Center (Centexbel, an initiative of Fedustria, the textile and wood sector association), as important sources of innovation and testing.
There is an important US-Belgium dimension to the flooring industry, as the US company Mohawk acquired Unilin in 2005 and, earlier this year, IVC. Balta also came under US ownership (Lone Star) this summer. In the opposite direction, Beaulieu made a $200 million investment in the US in the past year, and their sister organization, Beaulieu of America, has a long history in the US with 4,500 employees. Overall, the complete Belgian textile, wood and furniture industry is worth €10.7 billion and employs around 39,000 people.