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Lumber Liquidators to pay $13.2M for environmental crimes

CompanyLogos_Lumber-Liquidators-logoToano, Va.–Lumber Liquidators will pay $13.2 million for illegally importing hardwood flooring, after the company pleaded guilty to environmental crimes last year.

The Department of Justice said that Lumber Liquidators made hardwood floors in China from illegally cut Mongolian oak trees in Russia. Those trees are needed to protect endangered Siberian tigers and Amur leopards because their prey eats the acorns from them, the Justice Department said.

Lumber Liquidators, which was sentenced Feb. 1 in federal court, will pay $7.8 million in criminal fines, more than $1.2 million in community service payments and nearly $970,000 in criminal forfeiture. It will also pay about $3.2 million through a related civil forfeiture. The company also agreed to a five-year probation period.

The Department of Justice said that the penalty is the biggest for timber trafficking under the Lacey Act.

Lumber Liquidators said in a statement Feb. 1 that it is “pleased to put this legacy issue behind us.”

The company pleaded guilty to environmental crimes in October. Its plea agreement was unrelated to the controversy over some of its laminate flooring from China, which the CBS TV news show “60 Minutes” had reported contains high levels of the carcinogen formaldehyde.

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Wood: Exotics – Latest looks, styles in changing market

January 5/12, 2015; Volume 28/Number 14

 By Ken Ryan

Screen Shot 2015-01-16 at 12.38.07 PMClearly the entire market for exotics has changed. It is not forgotten, but it is just not the hot category it was a decade ago. Distributors no longer go wide and deep with their inventory, preferring to carry one or two lines that have been successful. “What the market has come down to is minimizing merchandising and turning those boards

as fast as you

can,” said Bruce Hammer, sales manager at Elof Hansson, which boasts an inventory of roughly 80% exotics.

In 2008, Congress passed the Lacey Act, prohibiting the import of illegally harvested wood and wood products into the United States. This legislation set a precedent for the global trade in wood flooring and other wood-related products, ensuring that only legally logged timber for flooring is sold into the United States.

The emergence of Lacey prompted some players to leave the Brazilian market. For companies like IndusParquet, which sources its products from Brazil, this market shift was welcome news. For starters, IndusParquet does not face illegal logging issues in Brazil because of the way it harvests from managed forests; second, the thinning of the herd has allowed it to take market share.

But the company did more than just sit back, according to Jason Strong, vice president of marketing and sales. “We don’t look at ourselves as just an exotics company,” he said. “We bring today’s fashion trends from Brazil into the U.S. market.”

Those trends include soft rustics and wide planks up to 8 feet long. Several of these products were on display at the NAFCD show in November, including Dolce pecan. This best seller features a ½-inch wear layer with a 6¼-inch-wide by 8-foot-long plank. The company sells the offering to distributors for just under $4 per square foot.

In addition, Indus-Parquet is adding a gray stain—gray being one of the trendiest colors—to its Brazilian pecan collection. “We’re taking our species and putting our spin on it,” Strong said.

IndusParquet products are now distributed in every U.S. state. The last region to be filled was the Northwest; Cascade Pacific, a Denver Hardwood company, agreed to carry the exotics line in 2014. The companies forged the deal at Surfaces.

“I have to give credit to Enos Farnsworth,” Strong said of the Denver Hardwood president. “Enos was the one who drove this process, who helped us get coverage in the Northwest.”

Farnsworth said he looked at all the exotics and believed IndusParquet was the clear leader. “We’re going to have a good partnership.”

Distributors were also interested in Elof Hansson exotics during the NAFCD show. Of particular interest is acacia, its leading exotic out of Asia. It sells for $1 to $2 less a square foot than most South American exotics and has been a winner for distributors, Hammer said.

Elof Hansson sources about 85% of its exotics from Brazil, with Bolivia and Peru making up the rest.

Industry wide, Brazilian cherry remains the leading South American exotic. Santos mahogany, another popular species, is said to be in short supply, at least in Peru where Chinese companies have been buying up vast quantities, flooring executives explained.

Out of Africa

Screen Shot 2015-01-16 at 12.38.20 PMArk Floors’ most recent exotics introductions include unique African species such as doussie, padauk, tali, amberwood and African mahogany, which all make up Ark’s Wild Coast collection. “There are a lot of unique species from that region that are durable, stunning and work well over radiant heat, yet for some reason we don’t see a lot of them in the marketplace,” said Laurie Sanfilippo, marketing manager.

Sanfilippo is one who believes enforcement of the Lacey Act and other green standards is postitive, as it has forced exotics marketers to raise their quality standards or face the consequences. “As consumers everywhere become more concerned with the back story of the products they purchase, manufacturers need to respond in order to remain viable. This can only benefit the industry as a whole. For Ark, these regulations have not changed our mindset, as responsible forestry is something that our factory has always been concerned with.”

Despite sourcing 85% of its products from South America, Elof Hansson can lay claim to a U.S. story as well—virtually all of its exotics are finished at a facility in North Carolina. The U.S. connection can be a big deal, Hammer learned, when a customer who was purchasing 4,600 square feet of tigerwood insisted on personally visiting the North Carolina facility to ensure the finishing was done on U.S. soil. “Ninety-eight percent of what we finish is done here in the states,” Hammer said. “It’s more to manage but I like the control it gives us along with the flexibility and recourse to have the raw materials here.”

For Mirage, exotics make up a very small percentage of its hardwood flooring portfolio, but it serves a niche market. The company sources Santos mahogany from Brazil and sapele from Africa. “We like the business we have in exotics, but it’s not the fastest growing part of our business by any imagination,” said Chris Thompson, vice president of sales and marketing at Boa-Franc, makers of the Mirage brand. “I think the consumer demand has lessened; the demand isn’t like what it was a few years ago. A lot of that is due to styling and color. Red—which can be found in Brazilian cherry and other exotics species—has fallen out of favor.”

Still, for those who rely on tropical exotics as their main hardwood flooring line, there are plenty of opportunities waiting to be grabbed.

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Wood: State of the Industry

Despite obstacles, executives expect category to continue steady growth

Volume 27/Number 24; March 31/April 7, 2014

By Ken Ryan

Screen Shot 2014-04-22 at 10.57.28 AMThe hardwood flooring segment continues to climb out of the years-long recession, buoyed by a healthier economy and improving housing fundamentals. As leading executives convene in Nashville April 16-18 for the National Wood Flooring Association (NWFA) Expo, there is the general sense that market conditions will continue to favor growth.

“All indications are that the category is continuing to gain momentum,” said Michael Martin, president and CEO of the NWFA. “We hear from our manufacturer members that production is increasing, we hear from our distributor members that sales are up, and we hear from our contractor members that they are booked several weeks, or even months, out. This is a significant shift from the previous five years or so when all flooring categories were down.” Continue reading Wood: State of the Industry

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Wood environmental update: Government legislation, advocacy programs progress

Oct. 21/28 2013; Volume 27/number 13

By Jenna Lippin

Screen Shot 2013-10-25 at 5.33.25 PMEnvironmental awareness and conservation are becoming increasingly important as technology has started to cast a shadow over nature. Some of the most significant developments in legislation regarding natural resources—namely the harvesting of wood—have impacted flooring production and created a powerful movement involving prominent industry figures and organizations. Continue reading Wood environmental update: Government legislation, advocacy programs progress

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Flooring industry, others rally behind Lacey

HICKSVILLE, N.Y.—It is not often manufacturing executives, environmental groups and union officials hold hands on a common issue, so when this rare event does occur, the “powers that be” listen. This despite the uproar and political lobbying from Gibson Guitars and others in the music industry. Continue reading Flooring industry, others rally behind Lacey

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Use of domestic exotics on the rise

Whether you chalk it up to the economy, stricter environmental and logging laws, changing consumer preferences in both style and where a product comes from, or something else, one thing is clear: The use of non-traditional North American wood species to make flooring has risen dramatically over the last five years.

Generally referred to as domestic exotics, these are wood species that go beyond the traditional oak, maple and pine. While oak has been the king of wood flooring for decades, the latter two have, historically, been more widely used than any other domestically grown specie. Continue reading Use of domestic exotics on the rise

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NWFA convention theme: Back to basics, green awareness

SAN DIEGO—Against the backdrop of the first positive sales trajectory since the beginning of the Great Recession, the National Wood Flooring Association’s 26th annual convention focused on just that: How to take advantage of a reviving economy. Continue reading NWFA convention theme: Back to basics, green awareness

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Lacey, CARB update: Compliance no big deal for mills

In 2008 two pieces of legislation were passed. One was an amendment to a 109-year-old federal law and the other a new regulation by the state of California. Each was expected to have a profound impact on the wood flooring industry in terms of the types of species being offered and how products are manufactured. Continue reading Lacey, CARB update: Compliance no big deal for mills

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Domestic exotics deliver visuals, performance, peace of mind

Today’s hardwood product mix offers greater options for buyers beyond traditional oak strip and foreign exotics. With technological advances and a growing concern for the planet’s ecological balance, consumers can find floors that are locally produced and environmentally responsible via domestic exotics.

Though the term sounds like an oxymoron, domestic exotics are generally considered to be any species of wood harvested in North America that is not oak. Traditionally a favorite among consumers, today’s discerning buyer has greater options for her flooring, whether her needs are visual, performance or green driven. Species indigenous to our continent like ash, walnut, cherry, maple, hickory/pecan and birch can meet those needs. Continue reading Domestic exotics deliver visuals, performance, peace of mind