1. Project Necessity

1.1 Increasing Demand for Flooring

There are many materials in the flooring industry. In recent years, flooring materials have undergone many improvements. Because of the characteristic of pure nature, real wood floor is widely praised, but solid wood floor on the pavement process requirements are higher, and improper pavement will produce abnormal noise and other problems. Experiencing a long use of wood floor , the surface may have the mark of wear and tear. Environmental protection and actual use feeling of laminate floor are slightly worse than solid wood floor, and 4 different material of laminate floor undertakes combination through adhesive, which will cause the harm that laminate floor exists formaldehyde. The advantage of compound floor is it is more balanced between use feeling and  appearance. It also can resist material irregular deformation again at the same time. Therefore, PVC is gradually taking place of a bigger position in flooring industry. PVC applied in flooring industry mainly consists of 3 types – SPC, WPC, LVT, in which SPC is more widely used in people’s daily life.

This report is also mainly based on SPC flooring.

Developing Prospect:

From 2016 to 2018, the real estate boom index rebounded significantly, the real estate investment enthusiasm of the first and second tier cities increased, and the total output of China’s flooring industry basically maintained a stable upward trend. In 2017, the floor sales of China’s flooring enterprises with a certain scale exceeded 400 million square meters for the first time. Driven by the new policy of full decoration, the sales revenue of China’s flooring industry has increased steadily. With the channel gradually sinking to the third and fourth tier cities, the demand for high-end products is more vigorous, and the sales revenue will reach 142.21 billion yuan in 2023.

1.2 Increasing Demand for Environmentally Friendly Materials 

At present, the world attach more importance to the requirements of environmental protection, which requires that the material should be no harmful to human health and can be recycled easily. The traditional wood materials are loosing theirs luster. By contrast, PVC flooring is completely environmentally friendly. The main material is PVC powder, which is an environmentally friendly, non-toxic and renewable resource. Compared with the harmful substances such as formaldehyde in wood flooring, PVC flooring has an absolute advantage in environmental performance.

The main raw materials of PVC plastic flooring are polyethylene plastic, and selected non-radioactive marble powder. Polyethylene plastic is environmental protection non-toxic renewable resources. In the production process, all added ingredients are completely non-toxic and without radioactivity, and does not contain any heavy metals. Therefore, its environmental protection is no need to worry about and it is real and green floor.

In conclusion, with the increasing demand for Flooring and environmentally friendly flooring materials, new environmentally friendly materials get a important position in floor industry, and demand for this new materials is also increasing.

2. Market Analysis

2.1 Data of Chinese flooring exporters from January to October 2019

2.2 The ranking of PVC purchasing countries from January to October 2019

2.3 Changes in the proportion of exports of various materials in flooring industry from 2018 to 2020

2.4 Economic Benefit

In the European and American markets, the proportion of PVC flooring in floor decoration materials is increasing, and the market scale of PVC flooring continues to expand.In 2018, the penetration rate of PVC flooring in the United States reached 21.4%, and the market scale was US $3.43 billion. At present, China’s PVC flooring products are mainly exported, and the domestic market penetration rate is low, but in recent years, it is in the stage of rapid expansion. The domestic demand for PVC flooring has increased from 170 million square meters in 2014 to 260 million square meters in 2017, with an average annual growth rate of 15%, which has great growth potential.Correspondingly, in the next few years, the market share of PVC products will continue to increase. Investment in PVC projects has a good market prospect, and the project income is stable and rising.

3. Production process

PVC refers to Poly Vinyl Chloride (PVC). It is a vinyl polymer material and the material is an amorphous material. PVC materials in the actual use of often use together with stabilizers, lubricants, auxiliary processing  modifiers, paints, impact resistance modifiers and other additives. It has the advantages of non-flammability, high strength, weather resistance and excellent geometric stability.

PVC applied in flooring industry mainly consists of 3 types – SPC, WPC, LVT, in which SPC is more widely used in people’s daily life.

3.1 Production process flow

Step 1 Mixing system: https://youtu.be/QaQeKtKtmAU

Step 2 Extrusion system: https://youtu.be/h01uDFsbNkg

Step 3 UV coating system: https://youtu.be/1Npk47dDh8c

Step 4 Automation system: all of the automation machine in the video.

Step 5 Profiling system: https://youtu.be/HXwfhw4N6VI

Step 6 Pad laminating system: https://youtu.be/12bGJxhSsbU

Step 7 carton Packaging system: https://youtu.be/470caGBHhJY

Step 8 Recycling system: https://youtu.be/eUWbP38ceno

3.2  Machine List of Main Production Line

3.3 Main Used Raw Materials

Specifications and properties of main raw materials

• UV coatingpaints

The UV coating used in this project is the plastic matte paint produced by Hunan Sunshine New Materials Co., Ltd. According to the MSDS provided by the manufacturer, the main components of the UV paints are polyurethane 60%, initiator 5%, Degussa OK500 10%, and epoxy pyrocalcine ester 25%.

• Printing ink

The ink used in this project is oil ink, composition ratio is: resin, color sheets, fillers and other solid content of 40%;Ethyl acetate 35%, butyl acetate 25%.

• Hot melt adhesive

The hot melt adhesive used in this project is composed of 4,4 ‘-diphenylmethane diisocyanate < 0.5% and polyurethane polymer

99-100%.

• Stabilizer

Used to block or prevent the decomposition of PVC.Commonly used stabilizers are lead compounds: such as three basic lead sulfate, two basic lead phosphite;Metal soaps, such as barium stearate, cadmium stearate, etc.Organic tin compounds, etc.The dosage of stabilizer is generally 2%~5% of the resin.

4. Cost Calculation

According to the actual feedback of the flooring market, the production process and the economic benefit, the following Calculation mainly refer to the part of SPC.

4.1 Raw Material Cost

4.2 Main Machine Cost (1 line)

5. Risk Assessment 

From the perspective of the global market of SPC flooring sales, the business in Europe and the United States is relatively high, or there are risks such as exchange rate fluctuations, trade protection and the escalation of the global Covid-19 epidemic.

1. Risk of market demand fluctuation: Currently, SPC products are widely accepted in European and American countries, or there may be large fluctuations in European and American economies due to the impact of the epidemic, so there is risk of market demand fluctuation of SPC.

2. Risk of intensified industry competition:SPC industry has a good prospect, and there may be more participants in the industry in the future, and the risk of intensified market competition.

According to the data, the market share of China’s top export company in 2019 is only 8.7%.

It indicates that the market of SPC industry is scattered and the degree of concentration is low, or there is a risk of intensifying competition of low-price homogenized products.

3. Raw material price fluctuation risk：SPC flooring raw materials include PVC powder, Caco calcium carbonate, other plastic additives, etc., in 2020, the price of PVC rose from 5100 to 7030, the increase rate is more than 37.84%, other raw materials also increased 30-45%, if the price of raw materials continue to fluctuate substantially or have a certain impact on the operation of SPC project.

4. Management risk:the risk of dependence on senior management team and technical personnel, as well as SPC project scale expansion or certain management risk;Several well-known SPC flooring factories in China have encountered great resistance in setting up factories in the United States. Due to the problems of the epidemic situation, work visa, culture or technical personnel’s family, it is inconvenient to dispatch them. As a result, there is not enough management team and technical personnel to serve in the project for a long time, which will cause the influence of the SPC project.

Starsplas is the first company in the world to innovate in the whole SPC plant planning and output, and to serve and guarantee the project until the successful operation. It is also the only company with independent successful factory building experience in the United States at present.We will provide two teams of project site service and project support service to cooperate with the management of the project to reduce the project operation risk of the customer.

You can get the following technical support from Starsplas:

• lFactory Layout Design
• lInstallation Design with Wire drawings
• lInstallation Guidance for Mechanical, Electrical, Software
• lProject Manager Supervision
• lFactory Acceptance Testing
• lDelivery Plan
• lCustoms Clearance
• lSite Installation with Third Parties
• lSite Acceptance Testing
• lSOP Training
• lProduction Guarantee
• lQuality Control System
• lContinuous Improvement Plans

5. Technical patent risk:SPC locking flooring uses a patent company that is engaged in the development of floor locking and related technologies.At the same time, the cooperation between the company and the patent company is stable, and the patent license agreement has a long term of validity. It is expected that the company will continue to maintain long-term and stable cooperation in the future.In addition, because there is more than one patent company, competition and checks and balances among patent companies give flooring manufacturers a certain degree of choice.

In addition to the floor locking technology, Industrial joint professional floor other patents research and development, including, LED cold light ultra-wear-resistant coating, floor heating floor technology, water-based environmental protection ink color film technology.

LED cold light UV curing technology promotes the high speed development of SPC industry. Light curing technology is to use UV LED curing equipment that can emit pure ultraviolet light to irradiate coatings or objects to be cured. It is to achieve curing and deep curing in a very short time, thereby improving production efficiency and quality. UV LED curing machine is popular because of its high efficiency and energy saving, and UV LED curing machine has long life span and good stability. At present, there are UV LED curing machines running on the client side for three years without any fault, which is quite cost-saving for customers.

See the link for more details: http://www.starsplas.com/breakthrough-in-led-curing-coating-for-spc-flooring-technology/

6. Conclusion

According to the authoritative statistics of the McKinsey Global Institute, China’s urban population will reach 926 million by 2025, an increase of 350 million.There will be 221 megacities with populations of 1 million and 23 megacities with populations of more than 3 million.The demand for 40 billion square meters is equivalent to 20,000 to 50,000 skyscrapers with more than 30 stories, about the size of 10 New York City buildings. With the advantages of convenient construction, environmental protection, waterproof and skid prevention, PVC flooring products have been widely used in the above fields, and are gradually expanding to the family decoration market. In the future, with the steady development of real estate, early childhood education, pension and other industries, it will be conducive to the rapid growth of SPC flooring market demand. With the Broad market prospect and increasing demand for SPC, the project can be very development-friendly.