Specialized flooring plant completed near Ho Chi Minh City, Vietnam
Synergy expected on the back of growth in Vietnam's flooring market
Hansol Homedeco (CEO Kim Kyung-rok) completed the construction of its 'laminate and engineered flooring plant' in the Dak Nong region near Ho Chi Minh City and held a completion ceremony on August 11.
After establishing its Vietnamese subsidiary in December last year, Hansol Homedeco broke ground on the flooring production plant in January of this year.
Drawing on Hansol Homedeco's long-accumulated flooring production know-how and its latest, optimized facilities, the Hansol Homedeco Vietnam subsidiary is capable of producing up to 3.5 million ㎡ of flooring annually. Through this, Hansol Homedeco is now able to offer a one-stop service spanning from production to distribution in the local Vietnamese market, and the company explains that it has also secured price competitiveness through the region's raw-material supply system.
Notably, Hansol Homedeco conducted local market research for about two years before entering Vietnam, and starting last year it carried out advance sales activities leveraging its brand power ahead of product production. Through this, the company signed a partnership agreement with Vietnam's No. 1 building-materials distributor by market share and also won a contract to supply 160,000 ㎡ of products to a local Vietnamese construction firm.
Going forward, Hansol Homedeco plans to concentrate its sales capabilities locally, building on the quality know-how it has amassed in the Korean market, to firmly capture the rapidly growing Vietnamese market. In addition, the company plans to actively promote itself online to Vietnamese consumers by utilizing Facebook and its YouTube channel 'Al-Sseul-In-Jap,' among others.
Buoyed by continued growth in national income and urbanization, Vietnam recorded high GDP growth in the 7% range in 2018 and is maintaining a stable domestic market. In particular, laminate flooring is posting high growth of more than 10% on average per year, driven by the increase in apartments. In fact, Vietnam's laminate flooring market is projected to grow from 8 million ㎡ in 2018 to an annual scale of 14 million ㎡ by 2023.
Recently, as apartment-style housing has increased due to rapid urbanization in Vietnam, the flooring market has been shifting from its existing tile-centered structure toward laminate flooring, making the market's value even higher.
Because Vietnam still has no eco-friendliness standards for flooring, E2-grade flooring—which cannot be distributed in Korea—is mainly being installed. In response, Hansol Homedeco plans to introduce differentiated products that are both eco-friendly and functional to the local market, while actively promoting Korea's excellent installation quality to reach consumers seeking high-quality products.
Seo Beom-seok, head of Hansol Homedeco's Vietnam subsidiary, said, "By combining the production technology we have accumulated in Korea with the region's abundant raw materials, we expect to secure both quality and cost competitiveness at once," adding, "With locally tailored strategies and marketing suited to regional characteristics, we plan to expand our business beyond building materials into the furniture materials field, while also advancing into other global markets, including Southeast Asia, in the future."