Author: admin@neofloor.com.vn

Neo Floor, which is a member of Pha Le Group, benefits from a plentiful supply of CaCO3 stone material (which comprises 75 per cent of the volume of the product’s core layer) and the formula for combining CaCO3 with additives, which enables the company to master the application technology for constructing core rigid vinyl floors.

In 2019, a group of professors and physicians from the Polymer Materials Research Centre, affiliated with Hanoi University of Science and Technology, initiated the development of this formulation in conjunction with Neo Floor.

Emphasising the importance of fostering research and development (R&D) to establish competitive advantages, Neo Floor is dedicating up to 3 per cent of its annual revenue towards such efforts. The R&D division serves three primary purposes: conducting market and survey research; enhancing products, technologies, and materials; and investigating and developing new products.

Neo Floor is establishing three golden objectives for 2024. First is to conduct an initial market survey, investigation, and development of new potential markets, including but not limited to Canada, Mexico, Indonesia, and South Korea. Second is to develop novel sources of competitively priced basic materials that are of high quality. And third is to introduce new technology products featuring a lightweight, resilient central layer, and advanced production technology.

Currently, R&D for core rigid vinyl products focuses on enhancing the durability of thin products, preventing surface blemishes, and reducing floor weight. As a result, prevalent core rigid vinyl R&D activities frequently focus on the formulations, stability, and increased durability of the core layer; enhancing the product’s scratch resistance, which is inferior to ceramic tiles or laminate flooring; and simultaneously refining the surface to resemble genuine wood more closely. The reduction of core weight is crucial to enhancing product value through the mitigation of shipping volume and logistics expenses.

Eco-friendly products are a primary consideration for development

Neo Floor’s challenge is to optimize costs, speed, and security to remain competitive with large manufacturers such as China. The company should also be receptive to information and insights from partners and competitors, as Chinese manufacturers continue to have a significant impact on the flooring industry.

At present, the number of global manufacturers capable of producing core rigid vinyl products featuring a lightweight core layer is limited. Neo Floor plans to introduce this product at the International Surfaces Event in February 2024, the largest flooring materials trade show in the US, held annually in Las Vegas.

R&D is crucial in bolstering the competitive edge of organizations, facilitating elevated technological benchmarks, fostering increased productivity, expanding market presence, and diversifying production. On the other hand, R&D can be risky investment that is more challenging to effectively control than regular production and business operations, since companies cannot predict costs. Maintaining a competitive position, however, is challenging for organizations that do not invest.

Consequently, R&D as well as enhancing and devising production processes and technology are critical endeavors that yield numerous advantages. These include establishing a competitive edge over rivals, expanding market presence, and maximizing monopoly profits. In light of the ongoing Fourth Industrial Revolution, it is critical for every business to encourage R&D.

Research and development for core rigid vinyl products often focuses on boosting durability

At the Vietnam Academy of Science and Technology, Neo Floor assembled pre-eminent experts in materials technology to form a specialized R&D block. A suitable proportion of annual business activities’ funds are allocated to R&D, ensuring continuity from the outset of product development.

Human health and environmentally favorable products are the primary considerations in the development of the company’s merchandise. The trend towards replacing traditional flooring materials like wood and natural stone with rigid core plastic flooring products is what drives this development.

These products feature various properties similar to those of natural materials, but they have superior properties, including resistance to termite shrinkage and fire spread, water absorption, and ease of installation. The composition is devoid of heavy metals, carcinogens, and formaldehyde in particular; therefore, it is extremely environmentally and user-friendly. Due to its confined operation, the production process minimizes environmental emissions.

source: vir.com.vn

Managed by Pha Le Group, Neo Floor aspires to achieve substantial annual growth in revenue and profits by the end of 2024. This will be accomplished by allocating more than 90 per cent of output to export markets worldwide, with a particular emphasis on the US and the EU. The company holds the belief that the trade dispute between the US and China is unlikely to reach a resolution.

However, Vietnamese goods do not incur anti-dumping duties ranging from 8 per cent to 30 per cent on the European market, in contrast to other Asian nations, most notably China. The utilisation of imported input materials in the production of exported products will substantially mitigate the exchange rate risk for the company.

Additionally, the factory of Neo Floor in Haiphong city in the north receives preferential import tax treatment and zero VAT on raw materials imported for export purposes, which further alleviates the company’s financial burden.

Neo Floor’s six mineral mines also under Pha Le Group – two granite mines in Ninh Thuan province, three white marble mines in Nghe An, and one stone quarry in Quang Binh – further contribute to its substantial production volume of about 26 million square metres of rigid core vinyl flooring annually. The CaCO3 mine in Nghe An is widely regarded as a prime source of white and brilliant marble in the world. Spanning an expansive area of more than 10 hectares, its reserves are exceptionally abundant.

CaCO3 stone powder, PVC plastic, and additives are introduced into the extruder under a specific combining formula to make plastic sheets. The wood grain layer is pressed and coated with UV paint using an additional machine system, after which it is cut to the specified dimensions. Five layers are produced in total: after passing the plastic tile panels through a securing press machine, they are transferred to a rubber base layer.

“The advantage of raw materials and transparency of the production process enable us to compete more effectively on the global market,” said Neo Floor COO Le Quang.

Neo Floor is investing in advanced exploitation methods and mastering processing technology with the raw materials at hand. Therefrom it can effectively manage product quality to satisfy the needs of domestic and international markets with an annual CaCO3 stone output of 300,000-500,000 tonnes.

Nevertheless, intense competitive pressure compels Vietnamese rigid core vinyl flooring manufacturers to promptly adjust to market conditions, finalise the supply chain, and guarantee origin transparency.

Neo Floor incorporates past experiences into its action plans, recalling a period when the company engaged in the exportation of raw materials extracted directly from quarries. Neo Floor made an investment in a production line for CaCO3 (Filler Masterbatch) additives in 2014. These additives serve as fillers in the manufacturing process of domestic and industrial plastic products.

The primary objectives of the line are to increase product durability, thermal resistance, and cost savings. The company experienced a substantial surge in revenue following the completion and implementation of the Filler Masterbatch production line in the second quarter of 2016. The selling price of this product is 6-7 times that of stone powder products and 13-15 times that of standard CaCO3 stone. The percentage of the firm’s total revenue attributable to Filler Masterbatch sales is rising, from 80 per cent in 2016 to 85 per cent in 2017, and then to about 90 per cent in 2018.

Nevertheless, due to its reliance on imported critical raw materials and its lack of source independence, Neo Floor’s profits are significantly impacted by global plastic resin price fluctuations and exchange rate risks. The Filler Masterbatch is composed primarily of primary plastic granules and CaCO3 stone powder, which together account for approximately 70-85 per cent of the volume.

However, the cost of this raw material is dozens of times bigger than that of the stone powder, resulting in the virgin plastic resin price comprising 55-60 per cent of the cost structure. This factor is beyond the control of the firm and negatively impacted net profit in H2 of 2018.

Neo Floor, whose capacity is approximately 26 million sq.m of floor per year and accounts for nearly half of domestic rigid core vinyl flooring production, seeks to add surplus value to the product by developing consumer goods through the application of technology. Costs and time are reduced through the utilisation of the company’s available conditions for transporting products from the factory to the seaport.

Additionally, the organisation maintains competitive pricing, on-time deliveries, and high-quality products through utilisation of an efficient logistics model and exceptionally qualified staff. Since 2018, 3 per cent of Neo Floor’s annual revenue has been allocated to research and development, in collaboration with eminent doctoral candidates from Hanoi University of Science and Technology, to investigate the applications of CaCO3 in depth.

Source: vir.com.vn