By Matthew Spieler
Shanghai, China—The country’s largest solid wood flooring manufacturer and distributor, A&W (Shanghai) Woods Co., is venturing into the laminate sector as it announced its intention to acquire the Baounite flooring business from Baosteel Group Corp.

The announcement was made during the Domotex asia/Chinafloors (DACF) market here. A&W is a progressive company with facilities—manufacturing and/or distribution—not only in China but Brazil, Russia and, most recently the U.S., where products are marketed under the Ark Floors brand.

The Baounite purchase, estimated at $1.94 million, gives A&W a laminate plant with an annual capacity of 21.4 million square feet along with trademark rights and domestic distribution channels.

Prior to this purchase, A&W, which recently changed its corporate name from Shanghai Anxin Flooring Co., was solely a wood flooring company with 85% of its yearly revenues (approximately $120 million) coming from solids and the remainder from engineered.

While its annual sales may not reflect it, A&W is, in fact, a major player in the Chinese flooring market and rapidly gaining international momentum thanks to a number of events.

U.S. flooring industry veteran Phil Reifinger, who is now the sales manager for Ark Floors, told FCNews during an exclusive interview at the company’s DACF exhibit, A&W is a fully integrated mill and supplier, as it owns both a forest and processing plant in Brazil through two joint ventures. Wood is used both internally and sold to other Chinese flooring manufacturers. “More than half the jatoba (brazilian cherry) comes to us. We use it and also supply other factories. In addition, we’re the largest Ipa exporter.”

According to the Shanghai Daily newspaper, the company “makes up more than 50% of Brazil’s timber exports to China for use in wood flooring.”

Reifinger noted, “Our strength is in exotic solids, but we are doing more engineered as it is makes better use of the natural resources, plus it is a very stable product.” In the U.S., Ark sells solids and engineered in both traditional and distressed styles through a Los Angeles warehouse it opened in January. And as distribution grows, plans are to open an East Coast warehouse.

A&W is a member of the National Wood Flooring Association and its facilities are certified to meet International Standards Organization’s (ISO) criteria for quality and environmental friendliness.

In addition, according to the company, more than 80% of its total supplies are purchased from other certified timber suppliers, while the other 20% are from its own managed forest. “Our logging quantity each year is less than 1% of our total forest reserve. Correspondingly, we segment our forest into 25 sections and log each section every five years, and this is closely supervised by GPS and assures sustainability of our forest productivity.”

Being environmentally friendly is important, Reifinger added. “One of the main reasons I joined the company is its very high standards. Carl Lu (the company’s chairman) and the rest of the executive team is very pro environment and has great business and personal ethics. They pay all taxes and tariffs, have no illegal imports, and have a great deal of respect for the people who work for them.”

As for the laminate facility, indications are the purchase is for domestic use only with no plans of exporting to the U.S. “Right now, our focus in the U.S. is real wood flooring,” he said. “We have a strong reputation in this area and want to bring that quality to America.”

Interestingly, some analysts wonder how long it will be before laminate manufacturing and sales are expanded beyond China. This stems from the fact that last May, U.S. buyout firm Carlyle Group, the world’s largest private equity company, invested $27.5 million in A&W. There was no word on how many shares in the floor company it obtained with that investment, which is the prime driver in allowing A&W to make the purchase.

In fact, there is even speculation, that A&W is preparing an initial public offering (IPO) in Hong Kong, but officials declined to give a schedule.

For more information on A&W, call 800.918.6188.