Wellmade: A rigid core pioneer
CARTERSVILLE, GA.-The core SPC/rigid market is valued at over $5 billion with supply chain issues alone standing in the way of continued skyrocketing growth. Every few months seems to bring a new innovation or iteration. But many will be surprised to learn who has pioneered the fastest growing flooring segment in the past four years and for the foreseeable future.
Just as Piet Dossche is heralded as the godfather of WPC, Wellmade’s team backs up claims that they invented what is now called SPC or rigid core, which was born in 2015 as its trademark HDPC flooring. Over the years, HDPC has evolved into hybrids of wood and bamboo.
To illustrate its commitment to the US market and many major customers, Wellmade has recently started manufacturing rigid cores at its brand new 328,000 square foot factory here. The Cartersville plant was built in 2020 with equipment arriving from China in February 2021. In November, the product rolled off the lines for testing.
What prompted the decision to build? About three years ago, Wellmade strived to provide US customers with better service with an emphasis on flexibility, less inventory investment, and more turns. In other words, making its customers more successful. The solution was simple: build a domestic production facility.
“Wellmade realized it needed to grow and expand capacity to serve its growing group of major channel retailers,” said Dick Quinlan, senior vice president of sales and marketing. “We knew we had a winner. Our product is harder: a density of 1.9 per cubic meter. It is also a closed cell material, which prevents water from entering the product and it grinds better. ours is a single ply, which makes it significantly tougher, so it’s much more dent resistant than the competition. But at that point, the SPC opportunity kicked in and we didn’t have the capacity to take full advantage of it.”
Wellmade is one of a number of companies committed to the domestic production of rigid cores, but one of the few that is both up-and-running and doing well. There’s a reason for this: Co-owner George Chen designed Wellmade’s rigid core plant in China and has replicated it in the US — only with bigger and newer equipment today than what was available five years ago. “George built and designed this product,” Quinlan says. “He designed the machines that are used throughout the industry. He has all that knowledge, and now he is here. It’s not a manager trying to figure it out. Whatever issues we have, George has already guided the startup through the entire process. Others are still in the start-up phase, so their timeline is longer than initially planned.”
What else makes this factory different from the other domestic SPC facilities? In short, versatility. “The versatility of this plant is enormous,” Quinlan says. “From what we’ve seen, others have very limited capacity. We have a very broad capacity. We can make any thickness you want, from 2mm to 8mm. We can make tiles up to 24 x 48.”
Another differentiator: other domestic facilities are launched or have been launched with fewer lines, meaning less capacity. Wellmade’s new facility has eight lines and a further eight that should be operational by early 2023, if all goes according to plan. That’s an annual capacity of about 130 million square feet today and 280 million square feet projected for 2023. The capacity in Phase 1, which includes the eight lines, is booked primarily between OEM, major broadcasters and specialty stores.
How Wellmade spawned the rigid core category?
George Chen saw the growth of LVT in the US, especially what USFloors and Piet Dossche did with WPC. But Chen thought the industry needed a better product; he felt that WPC’s chemical technology was not as stable as the industry needed. “You Couldn’t Cut Clean” [locking profiles] and it was soft,” Quinlan explained. “It was better than the soft vinyl, but not as good as, say, laminate because of the ease of installation.”
So George Chen, in China, started looking at extruded products and said, “What if we made an extruded polymer or extruded plastic product?” declared Quinlan. “We brought in machine manufacturers and they designed the first machines to make an extruded plastic core for use in vinyl floors. So he created a board that was flexible and had a closed cell, so no water could get in. A product that can be milled very neatly and then a vinyl wear layer can be placed on top.” And that’s where HDPC vinyl – or rigid core – was born.
Wellmade started producing what is now known as rigid core and received all the patents in China in effect today for everything called SPC. “The reason we’re talking about HDPC and the whole market is talking about SPC is because we own the HDPC name,” Quinlan said. “We were the first; we invented this whole product category.”
HDPC stands for high-density polymer composite. “It’s the substrate board, so you can put any product—wood, bamboo, etc.—on it, just like you can plywood or HDF,” explains Allen Chen. “Basically, they become one plate.”
Wellmade launched its HDPC vinyl floors to several major customers. Soon another problem arose: capacity. “We had a capacity of about 100 containers per month and demand for the product with at least three major customers was skyrocketing,” Quinlan said. “Within 90 days, our three largest customers wanted 200 containers each. We had to quadruple the size of production. We were under the radar because HDPC was a small business, but the reality is the market saw this and said, ‘I need this product.’”
George Chen developed the production technology together with the machine companies, but since there was no IP protection for the machines, he went into the market and started selling machines thinking, “You can make this too. Now I don’t know how they do it.” with the mix of chemicals, but if you can figure that out, here’s the machine to make it.
And then everyone started getting into the category. “While Wellmade invested in the factory, others bought the same machines,” Quinlan said. “The market is starting to explode because SPC is so much better than the other alternatives.”
Over time, Wellmade would place a wood veneer and then a bamboo veneer on top of the HDPC, which we call the wood/vinyl hybrid today. “We were the first to do that — for sure,” said Allen Chen. Home centers and retailers are putting that product on the shelves in all of their stores, and it has done very well, “but it hasn’t been the landmark success it should be,” Quinlan said. He attributes that to the Trump rate of 25% in 2019, then to COVID-19 in 2020, then to freight challenges in 2021. “Every time we start to get some traction in the timber trade, we run into a new barrier that customers from making the investment. Our timber business is growing about 400% a year, but it should grow even more.”
Innovation rules the day
Talk to George and Allen Chen and they’ll tell you it’s not about where the product is made or the distribution channel. Rather, Wellmade is positioned as an innovation manufacturer. “This is the core of what we do,” said Allen Chen. “We now have about 10 other products that we are developing, such as MGO and PVC-free.”
PVC-free is becoming important, Quinlan told FCNews. “And we’ve all seen MGO hit the market, but it hasn’t done very well because the core material doesn’t meet customer expectations. So George Chen looked at it and said, ‘You know what? I’m going to build a factory.’ So we just completed the construction of MGO factory in China. And from that factory, we are going to make some innovative products such as PVC free, laminate, waterproof floors unlike the laminate you can get nowadays. Much of today’s laminate is promoted as waterproof, but if water moves around the seal, the product will fail. This MGO will not fail as we provide a very durable coating system on top of the melamine, making for a truly waterproof laminate. It also comes with an attached pad and is easy to install.
“So, to sum it up, it’s the ability to sell a thinner product with all the features of a thicker product at a more competitive price in laminate, a product that is PVC free, which will outperform any other. laminate product on the market compared to overall performance of water which can be 9 inches wide and very easy to install. Wellmade plans to unveil that product on Surfaces.
In addition, Wellmade will showcase a new 2mm dry HDPC on Surfaces for multi-family applications. “Glued vinyl in multi-family homes is a $2 billion market,” Quinlan said. “We can go with this product where other SPCs can’t because there are no acclimation issues. Everyone is afraid to use a 2mm dry back because if the environment changes they will get a claim. Our product does not move. It is very stable and wants to stay flat.”
But customers told Wellmade they needed the dry back with a fixed pillow. “It’s not easy because if you put a pad on a 2mm product and glue it down, you suddenly have problems with the edges,” Quinlan said. “The product has to be aligned, so we had to thicken it a bit. But George designed a new locking system that keeps the product from moving back and forth, as well as up and down. Then we go one step further by applying a sealant to prevent water from penetrating into the subfloor.”
Wellmade is a 23-year-old company that started making one line of traditional horizontal bamboo for the Chinese market. Allen Chen came to the US in 2001 to open a sales office in the US. He soon launched the line with a distributor in the Pacific Northwest. After a few years in business between $2 million and $5 million, Wellmade’s big break came in 2005, when Allen Chen landed a very high-profile, major channel retailer. Wellmade began supplying that bill with charred horizontal bamboo, growing the company to $15 million in 2009. The volume was there, but the margins were tight.
Things started to evolve with the hiring of Steve Wagner, the marketing guru behind BR-111’s rise in the mid-2000s. Wagner, the current director of marketing, was essentially brought in to give the company a name so it could taste of dealers and distributors in the United States. He went to China with the goal of having a 12-SKU program that can be placed in a single tower and go through distribution.
Renamed Wellmade Performance Flooring, the next step was to open distribution channels. Haines and BPI, two of the country’s largest wholesalers, joined. “We started to get some traction,” Wagner recalls. Wellmade was largely centered in horizontal and vertical bamboo, and as the industry moved towards beach bamboo, Wellmade entered that arena as well, releasing complete lines of solid and engineered beach woven bamboo. “At that time, we were diversifying the product lines,” Wagner said. “But we realized that we would only grow the business this way if we just stayed in bamboo.”