Who takes care of your interests in Europe?Find out on Page 5

Currency fluctuations….and how to handle them Page 8

Ingredients of a successful merger Bauwerk Boen Group Page 10

InterfaceThe magazine for wooden floor manufacturers worldwide June 2014

Highs and lows in the European marketInstability leads to creativity and consolidation

Interface

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Certified craftsmen convention, Colorado

Dear Readers,As we approach the end of Q2 2014, it is still hard to perceive a clear global trend in the wood flooring industry. However, there is a mood of optimism and some signs a recovery, albeit fragmented.

Some interesting things are happening in the business. For example, in the last 18 months, in Europe alone, there have been two important mergers and ac-quisitions: Kärs and Karelia have joined forces as have Boen and Bauwerk. One positive outcome of consolidation will be the emergence of market leaders – companies that are large enough to establish a clearer cost: quality structure across the industry. Setting the standard on quality is a natural role and, some would even say the responsibility of market leaders. Another potential benefit will be that companies with the resources to innovate start to develop new ideas and products that move the whole industry forward.

In the last six months, Bona has ac-quired several new customers. We con-tinue to get positive feedback, not only for our quality solutions, but also for our unique Bona Lifetime Support pro-gramme. For this reason, I’m especially

excited about the Bona Certified Crafts-men initative, which is now being rolled out worldwide. Besides training and cer-tifying craftsmen in the traditional side of the wood floor business, we are now also training specialists to install, main-tain and renovate pre-finished floors. This means that wherever your products are sold, you can easily get hold of craftsmen who are connected to Bona and qualified to work with Bona-treated floors. (Read more on page 3).

Finally, I’m looking forward to meeting FEP members at the General Assembly in Malaga in June. FEP has grown in size and strength in recent years and is taking some excellent initiatives, not just to pro-tect the interests of our industry, but to educate consumers about what we offer.

I hope you enjoy this edition of Interface and, as usual, welcome your comments and feedback.

Yours sincerely

Paul Spångberg Vice President and Director Division

Industrial Coating

Training event

Earlier this year, Bona certi-fied craftsmen from all over the US and Latin America attended a two-day conven- tion held by Bona in Denver, Colorado. The goal was to bring the contractors togeth- er to learn about our products and how to use them. The event was so successful that half the participants have already signed up to attend in 2015.

“We invited the best craftsmen from the best contractors!” says Richard Goering, VP of sales and operation US and Latin America. Every participant had a minimum of 5 years’ experience (the average was 13 years) and had already undergone a

four-day Bona certified craftsmen training. In total, 150 people attended, represent-ing 80 different contractor companies.

“It was an impressive turnout,” says Richard. “I was most impressed by the calibre of the people. We were there to share Bona’s best practices and teach the craftsmen about our products, but they had plenty of smart ideas to share as well. I think we all learned something useful from one another.”

From basket ball to wooden floorsThe two-day programme kicked off with an introductory speech by veteran bas-ketball star Bill Walton, who talked about how every success story starts with a solid foundation. For the remaining two days, participants could choose to attend one-hour classes – some hands on; others more theoretical. Also at the convention, several manufacturers of pre-finished hard-wood floors set up stands to showcase their latest products.

Sharing and learning

Bona’s mission:

”To bring out the best in wooden floors”

www.bona.com

Bona is a global company. We’re active in more than 70 countries all over the world and have

subsidiaries in 18 countries in Europe, North America, Latin America and Asia Pacific. We have

production facilities in Sweden, Germany, the U.S. and China.

We are specialists in supplying all the products necessary for the installation, maintenance

and renovation of wooden floors. In fact, we supply just about everything except the wood itself.

Our complete system of products includes coatings, UV finishes, sanding machines, abrasives,

adhesives and maintenance products. They meet the needs of contractors, producers of pre-

finished wooden floors, architects, specifiers and homeowners. We create all our products to

work perfectly with each other to bring out the best in wooden floors. From production and

installation to maintenance and renovation – we’ve got it covered.

Inside

4 Success based on local sourcing

5 FEP – taking care of our business interests

7 BR-111 launches a new range

8 How to handle fluctuating currencies

9 Making new floors look like antiques

10 The Bauwerk Boen group, one year on

12 Fashionable floors wear oil this season!

PublisherPaul Spångberg

EditorJoanna Le Pluart

Contributors listLars Gunnar Andersen, Magnus Dellrup, Ansgar Igelbrink, Daniel Pagano, Paul Spångberg, Karl Scheucher.

Optimism returningAttending an industry convention takes time and resources out of the daily busi- ness. Can we draw any broader con-clusions from the success of this year’s event? “It demonstrates a certain opti- mism about the future. The economic crisis from 2007 to 2009 hit contractors hard and it has taken a few years for them to climb back up. We now see their con-fidence returning. They are investing in their business and have more faith in the future,” says Richard.

Certified craftsmen around the worldFollowing on from the success of the BCC programme in the US, Bona has started to roll it out worldwide. “The Bona brand is associated with quality and reliability. Through the certification programme, craftsmen also have an opportunity to carry the Bona quality stamp. Ultimately, it gives end customers peace of mind to know that they are skilled professionals who can be relied upon to provide a good service.

A special emblem for certified contractors

Richard Goering is VP of sales and operations, Bona US and Latin America. He joined Bona in Jan 2014.

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Customer update

Austrian producer, Scheucher

Sucess based on local sourcing

Most of us have heard of FEP and some of us are even members, but what exactly does the federation do? Above all, FEP is committed to being the voice of the European parquet industry. It takes a strong interest in specific issues that have a bearing on the stability and consolidation of the parquet industry – and the prosperity of its members.

FEP’s Chairman, Lars Gunnar Andersen, comments: “We have experienced many changes in the last few years. We now have a lot more members and a broader activity base. We also have greater finan-cial strength, partly due to the addition of associate members, and this allows us to run projects that benefit everyone in the business.” Monitoring and influencing legislationFEP monitors what’s happening and what’s on the horizon across Europe, keeping track of new legislation and reporting on anything that might influ-ence our business. The federation also maintains good contacts within the EU, keeping key players in the commission informed about what’s going on in the wood industry. FEP representatives try to positively influence legislation so that it doesn’t harm our business interests. Statistics and research support for membersFEP compiles statistics about the con-sumption, production, imports and exports of parquet in Europe for the benefit of its members. Reports are sub-

mitted quarterly, and there is also an annual digest. FEP’s research in recent years has included surveys of consumers’ percep-tions and expectations of parquet – infor-mation which has helped members fine tune their offering to match market needs. Successful initiativesCurrently running in nine languages, the Real Wood initiative tells consumers they are buying the genuine item, and not a laminate or artificial wood product. The labelling scheme is supported by a popu-lar consumer website (realwood.eu) that emphasises the advantages of real wood products. Lars Gunnar is keen to point out that this scheme is also open to non-members and encourages broad par-ticpation: “The more companies that use it, the better it is for everyone.”

FEP represents

Your interests in Europe

Visit www.parquet.net and find out more about FEP membership

Since the company’s very first sawmill, nearly a century ago, success at Austrian par-quet flooring manufacturer Scheucher has been based on local sourcing. “We have always been a distinctively Austrian producer,” reflects CEO Karl Scheucher. “We get most of our raw materi-als here or from neighbouring countries. Even our glue is sourced locally!”

At Scheucher, the people are mainly lo-cal inhabitants. “Ninety percent of our employees come from within 10 km of us. We take in trainees at 15-16 years old, and prepare them for a satisfying career in the wood flooring business. When it comes to selling, we still think local, but in a different way,” observes Karl. “We insist that sales people are native speakers of the local language. Good communication is so important.” Bona – the exception that proves the ruleThere is one big exception to this eve-rything-local policy and that’s surface treatments. “We insist on buying treat-ment products from our partner Bona, in Sweden. Bona is so well known around the world that a Bona surface sells itself,” says Karl. He is also impressed by Bona’s problem-solving approach and respon-sive support network in local markets. Two distinctive ranges“Our original product was our standard Steirer parkett. A few years ago, we de-cided to develop a complementary range called Impressions, for a different part of the

market,” recalls Karl. Impressions features a wide variety of patterns and finishes, always customised for specific projects. “We have a special line producing sam-ples as small as 50 m2 for customers. They really appreciate this flexibility,” says Karl. It is also an approach that pays. “We now export 70% of our production to some 45 countries, despite the unsettled economic situation.” Producing what people want to buy“Times are tough in many European markets, and we noticed that volumes fell quite a lot in 2008/9,” notes Karl. But for Scheucher, local European mark- ets are still strong and the company has expansion ambitions. “Austria remains busy, and Germany – a local market for us – is still Europe’s biggest for parquet flooring. Switzerland is also doing well, and our brand is quite well-known there.” Scheucher is also looking beyond central Europe to markets such as Scandinavia, Russia and Asia, finding out what customers there want from parquet flooring. “When we know the

answer, we will make it and sell it! It’s important for us that business is steered by demand, not production,” he con-cludes.

Every plank is quality controlled at the Scheucher factory

Scheucher: an important employer in the local community

Industry News

Kravitz Design Inc and BR-111

Floors for the stars, by the stars

Reference project

Together, Kravitz Design Inc and BR-111, have created a natural, unique range of wooden floors.

When exotic hardwood flooring pioneers, BR-111, were looking for inspiration for a new product line, Kravitz Design was the obvious choice. Founded in 2003, Kravitz Design originally developed com-mercial, residential and product design for clients such as Morgans Hotel Group and Swarovski Crystal. Over the last dec-ade, with rock star Lenny Kravitz at the helm, the New York-based company has gone from strength to strength – entering into numerous successful joint ventures with interiors and fashion giants such as Philippe Starck and Gucci.

The result of this recent Kravitz BR-111 venture is a game changing wood flooring line that is modern, durable and afforda-ble. It features eight beautiful new colours ranging from the light and natural Cham-bord Oak to the contemporary Charcoal Black Oak. Each product is available in ultra-wide 10” planks with a full 3/4” thick profile.

BR-111 called upon long-term innova-tion partner, Bona, to produce a unique, natural-looking floor treatment for the new parquet range. Bona’s product develop-ers came up with the super durable Bona Naturale matte finish, which makes the new floors perfect for any installation type and any climate. All products also come with Bona Lifetime support and, through Bona’s worldwide network of Certified Craftsman, every customer can be sure that they are not only getting the high quality flooring of their dreams but that fit and finish also exceed expectations.

About Kravitz DesignKravitz Design (KDI) was founded by Re-naissance man and legendary music icon Lenny Kravitz. Focusing on residential, commercial, product conception and de-sign, the company’s team encompasses a diverse group of creative professionals.

Noteworthy ventures include chandeliers for Swarovski’s Crystal Palace Collection, suites at the SLS Hotel Miami Beach and a two-storey penthouse recording studio at the Setai Hotel and Residences. Most recently KDI undertook the creative vision for the downtown Miami, FL. 47-story bay front condominium project Paramount Bay, as well as a collection of ceramic tiles for Lea Ceramiche, the re-interpretation of Philippe Starck’s Mademoiselle chair for Kartell, the set for The Queen Latifah Show and an exclusive collection of lifestyle products for Fred Segal.

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Lenny Kravitz, legendary music icon turned interior designer

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Understanding the implications of

Why would a German toy manufacturer be able to sell its products in the US for 5 euros one year and only 4 euros the next, when the product hasn’t changed? And why might a British pound sterling cost you 1.18 euros when you go to London for a spring holiday, and then, six months later, when you return for a wedding, cost you 1.32 euros? It doesn’t make sense. But these are common stories in the myst-erious world of currency fluc-tuations!

Actually, not so mysterious after all; rather a simple story of supply and demand.If a lot of people with euros want to buy pounds at a point in time, they will drive the euro price of pounds up. Or, looking at it the other way around, if a lot of people want to get rid of pounds in exchange for euros, this will drive the price of euros up.

If you do all of your business and personal consumption in one country, you won’t even notice the difference because you spend and earn your money in the same currency. However, as a business, you might price your products or services in a foreign currency – for foreign customers’

convenience, say. What would it mean for you if that currency suddenly lost value relative to your home currency?

The answer depends on what you do with that foreign currency. If you convert it into your home currency right away, then watching the foreign currency lose value is like dropping your prices, unless you raise your prices to offset the exchange rate shift. Of course, you may not be able to do that (unless you want to lose your custom-ers in that country). Your customers there only see the price they pay. They will not be interested in the fact that your currency is suddenly stronger!

However, you might want to have a lot of that weaker currency on hand, because you may have expenses to pay in that country, such as salaries and overhead costs, if you have an office or factory there. By being paid in the domestic currency, you have ready cash for which you haven’t had to pay currency conversion commissions.

The upsideWhat if that country’s currency becomes more valuable relative to your home cur-rency? You could be in for a treat! If you invoice customers in a foreign currency that strengthens, from the standpoint of

Industry trend

Exchange rate fluctuations

your home currency, you’ve essentially-raised prices (which is realized when you convert that stronger currency into your own). The beauty of it is that your custom-ers don’t notice or feel the price increase. The peso versus the dollarWhen the value of the Mexican peso fell against the dollar in 1982, every Mexican company that had an unpaid invoice de-nominated in US dollars saw an abrupt increase in their bill. And Mexicans who had borrowed money from US banks saw their debts grow by 29%. But it was good news for some businesses. For example, resorts like Cancun boomed, drawing North Americans away from domestic and Caribbean destinations. Also, the Mexican state-owned oil company, Pemex, a major source of government revenue, contin-ued selling its oil into dollar-denominated world markets, and its dollar revenues consequently went a lot further at home. The end of fixed rates in 1971From the end of World War II until 1970, the exchange rates of Western countries and Japan were fixed relative to one another. However, in 1971, this system came to an end. From 1971 to 1973 the price of German goods rose by about 40% compared to US goods. This prompted

Gold, the ‘safe’ currency, lost 20% of its value in Q2 2013

Money: what is it actually worth?

German companies to stop making lower-priced, lower-margin products like toys and shoes, and shift their businesses into higher-priced categories such as luxury cars and high-tech production equipment. Playing it safe?Every international business has to think about exchange rate risk along with its vulnerability to abrupt changes in the prices of commodities like oil and sugar. Indeed, currencies are a kind of commodity, and make up the world’s largest asset class in terms of daily traded volume. There are a number of ways to manage exchange rate risk. One involves currency futures, i.e., buying contracts now that fix the rate at which you may buy or sell a certain amount

of currency on a future date. Futures trad-ing isn’t perfect, but it does create predict-ability. Another, as mentioned earlier, is to either require customers to pay in your home currency, or allow them to pay in a currency you don’t mind keeping around. Avoid gold and Bitcoins!What you probably don’t want to do, at least for now, is keep your reserves in Bitcoins, the trendy new nationless Inter-net currency that has recently revealed tremendous volatility. And beware of gold, that has effectively served as a cur-rency for centuries. It looked like a good, solid, appreciating investment for several years, until it abruptly plummeted in April 2013, losing more than 20% of its value

overnight. As long as we live in a world of multiple currencies, there’s a certain amount of uncertainty we’ll just have to live with.

One of the things that makes Bona unique is the way we develop trendset-ting new finishes for wood floors. Bona Antique is an excellent example. It began when we noticed that lots of customers wanted their new wood floors to look old – or rather, comfortably worn and cherished!

We came up with a solution that not only met their needs, with a relatively low en-vironmental impact, but also opened up a whole new world of visual possibilities. “Happily, we’ve found a way of achiev-ing this highly desirable aged look for our customers’ wood parquet floors,” says Product Manager Magnus Dellrup. “And with Bona Antique, we can predict fairly accurately how the floor will turn out.”

The naturally aged lookWhen applied to a species such as oak, which has a lot of natural colour varia-tion, Bona Antique reacts and gives the bare surface a naturally aged look. “By controlling the reaction, we can make the effect lighter or darker, to meet dif-ferent preferences,” says Magnus. “But really, that’s only the beginning. We can

The charm of antiques

combine Bona Antique with oils or other finishes, such as tinted varnishes and stains, to create many attractive effects.” Find out more on Bona.com

Magnus Dellrup

Bona Antique makes wooden floors look ‘naturally aged’

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The Bauwerk Boen Group, one year on

In March 2013, it was an-nounced that Bauwerk Par-kett (Switzerland) and Boen (Norway) would merge to form the Bauwerk Boen Group. Individually, the two brands were already among Europe’s leading manufac-turers of parquet flooring, and Bona was very happy to count both of them among our customers. One year af-ter the merger, how are things working out? We caught up with Ansgar Igelbrink – Brand President for Bauwerk and Senior Vice President for the recently formed group – to find out more.

One generally anticipates a few teething troubles when a new company is formed. However, according to Ansgar, the Bau-werk Boen Group has steered clear of any such issues. He explains, “The key principle of this merger was that the two companies joined together to form a new company as equal partners. From a cultural point of view, it’s very important that we have the mentality of joining, not acquiring. Both the Bauwerk and Boen brands are strong in their own right, so we are keeping them both and they remain on an equal level.”

Complementary skills, products and target groupsTraditionally, Boen’s key competence has been in three-layer parquet production, whereas Bauwerk’s has been in two-layer. Now, both brands are enjoying the syner-gies of having two common production sites; both have access to know-how in all types of parquet production as well as a wider product range.

Says Ansgar, “There is no risk of a clash of interests, since the two brands are market-ed to different target groups and markets.” Bauwerk products are sold primarily to in-stallers and therefore always designed with the installer in mind. Also, since Bauwerk’s floors are tongue and groove, they need to be glued down. This means they are only sold on selected markets where installers are familiar with this way of working. The main markets are in Central Europe, but the company also has some good part-ners in Asia and the US. By contrast, the primary target group for Boen products is floor distributers. Thanks to a connection system called 5G, Boen parquet products do not need to be glued down, but can be installed ‘floating’.

Ingredients of a successful merger

Three sites, including production in LithuaniaFrom a geographical point of view, the merger led to some adjustments. Today, the group head-quarters is in Switzerland, and the management team is based in Norway, Lithuania and Switzerland. The company’s Lithuanian manufacturing plant – which was already producing 4 million square metres of parquet per year for the Boen brand – now manufactures an additional 1,5 million square metres of products previously made Austria. All the machines have been installed in new pro-duction facilities in Kietaviskes, Lithuania, and production has been up and running since February 2014. Says Angar, “Lithu-ania, has a long tradition of working in the wood industry and an education system involving internships and apprenticeships similar to that which exists in Germany. The result is a high level of wood com-petence, which our company can really benefit from.” The group has a second production site in Switzerland, where 60% of the Bauwerk range is produced.

”Formpark 780”, an oak floor, treated with natural oil Natural oiled floor “Formpark” in smoked oak

Two strong brands under the same umbrella

Two brands developing togetherBoth the Bauwerk and Boen brands have extended their product ranges following last year’s merger. As you would expect, for Boen there are novelties in the two-layer segment and for Bauwerk in the three-layer segment. Moreover, Bauwerk has launched some exciting new products incorporating both technical innovations and design novelties.

One example of the latter is Cleverpark Silente, a high quality parquet with noise-dampening properties for use in private homes. In addition, Bauwerk strives to lead the development of environmentally sound products. This means sourcing wood from responsibly managed for-ests and taking care of flooring products throughout their entre lifecycle. Accord-ing to Bauwerk’s cradle-to-cradle con-cept, the producer now takes back old used Cleverpark Silente floors, separates all the different materials (wood, coating, glue etc) and reworks the wood to make a new floor.

Reflections on the merger When asked to comment personally on his experience of the merger, Ansgar’s tone is upbeat: “It’s been a very intensive year, but at the same time, fun. It’s interesting to be part of the new team with lots of new and inspiring colleagues – each contributing his or her own experience and knowledge to the creation a new company.”

During the merger, the Bauwerk and Boen created a business plan together which was both tough and realistic in order to confront the prevailing market conditions. How is that working out? Ansgar is happy with the results so far but stresses the need to continually focus on adding value to Bauwerk Boen’s offering: “We aim to not only fulfil our business plan, but to be the most valuable parquet company overall. In a world of tough price com-petition, we must avoid commoditization by always ensuring we deliver something extra.”Bauwerk’s recent launches – Casa-park, Triopark, Cleverpark Silente and Formpark – are successful examples of

this business philosophy in practice.

Why Bauwerk Boen chooses Bona“Within our Bauwerk Vision, we want to be seen as the leading innovation company, creating trendy and healthy products, which fulfil the needs of our premium customers. This means we need to invest constantly in Research and Development and always be innovative. Bona Industrial Coating is one of our most important speaking partners in this process,” concludes, Ansgar.

We from Bona wish Ansgar and the team at the Bauwerk Boen Group every success and look forward to continuing our fruitful cooperation with them!

Customer update

Elegant and understated

Further benefits include • Easy application, saving time and trouble • The reassurance of DIBt approval • Clear, so the wood shines through • Good water resistance for durability in demanding environments • Can be tinted, for extra design flexibility “Bona Industrial Oil is an exciting develop-ment,” says Magnus. “It gives the same effect as our professional floor treatment oil and can, similarly, be tinted with colours from all the Bona oil ranges, such as the Create palette. Bona Industrial Oil is also

Designers and architects have long been keen on wood floors treated with oil. They – and their clients – love it’s elegant, understated finish. Now our technicians have developed a new product, Bona Industrial Oil, that makes it possible to experi-ence the look and feel of oil with pre-finished floors.

“The formula of Bona Industrial Oil is very like that of our professional oils,” says Product Manager Magnus Dellrup. “The main difference is that the IC products are more adapted for an industrial process”. Bona Industrial Oil is an oxidative drying oil that’s quick to dry yet cobalt-free. The ab-sence of cobalt is one important environ-mental advantage. Another is that the new oil contains less than 10% volatile organic compounds. “This is a good low level for VOCs, especially for an oil product,” com-ments Magnus.

compatible with the Bona Lifetime support programme for floor care, maintenance and renovation, making it a valuable addition to our overall offering.”

Oil is always ‘in’

Contact us today

Head OfficeBona ABP.O. Box 210 74SE-200 21 Malmö, SwedenTel +46 40 38 55 00

AsiaBona Coatings (Dalian) Co., Ltd.Huai He Middle Road, No.99 #3ADalian Development AreaLiaoning ProvinceP.C. 116620, ChinaTel +86-411-875 85 500Jon Loi +86-159-04245500

North AmericaBona U.S.2550 S. Parker Rd, Suite 600 Aurora, CO 80014 USATel +1 303-371-1411 Tom McNeil +1 303-253-1014

North EuropeBona ABMurmansgatan 130SE-200 21 MalmöSwedenTel +46 40 38 55 00Fax +46 40 38 73 53Paul Spångberg +46 73 6557303

Central EuropéBona Austria GmbHNiedelassung Wien1030 Wien Baumgasse 79AustriaTel +431 79 88 384Fax +431 79 88 385Jürgen Reissner +43 664 82 49 710

South EuropeBona ABP.O. Box 210 74SE-200 21 MalmöSwedenTel +46 40 385580Alberto Massimo Mobile +39 335 78 28 092

Spain/PortugalBona IbéricaStreet Navas de Buitrago No 52 Nave 5 ES-28021 MadridSpainTel +34 91 682 55 22Fax +34 91 682 21 95Marcus Björck +34 670 917 940

Latin America Bona BrazilAvenida Sete de Setembro, n°4214 – conj.704. Bairro Batel - Curitiba-Paraná CEP-80.250-210 Tel +55 41 32335983Tony Borek +55 41-9931 9525

Bona Latin America PanamáTorre BBVA, Av. Balboa, entre calles n° 42-43 Piso 13, oficina 13-02Panamá City, PanamáTel +507 614 017 25Marcus Björck +34 670 917 940

For other markets, please contact our head office.

Visit us at our website bona.com/interface

Bona and their products are trademarks owned by Bona and their legal entities. All other trademarks belong to their respective owners. Copyright © 2009 Bona. All rights reserved.

Product news

Bona Industrial Oil – available in all these colours.