“The business environment remained tough, but it was a better year from a financial performance perspective”
It was another very challenging year, with little promise for improvement from a flat global market. But by focusing hard on costs and responding to the difficult trading conditions, we were able to protect our market share and improve our overall business results.
After two very challenging years, the business environment remained tough, but it was a better year from a financial performance perspective. We were encouraged by the slow but steady improvement in US housing starts during the course of the year, which is one of the key drivers of our business. Underlying demand increased and the trend line in North America finally started moving in the right direction. Asia was essentially flat, but we were able to right-size the business to improve financial performance and allow us to more directly focus on our growth agenda. Volumes declined in Europe, partly because several large customers reduced manufacturing activities in line with reduced demand from a sluggish economy. There was some volume growth, notably in Russia and Turkey, but Europe remained a very uncertain market. Despite these unfavorable conditions, we effectively responded to the challenges we faced by managing our costs, strengthening our product mix and capturing synergies across the business to improve our results.
We officially opened our new Vietnam site in June. The plant, in Amata near Ho Chi Minh City, includes a new color studio, which will serve the export and domestic markets for wood furniture, flooring and cabinetry and provide a base for support to our customers in other countries in South East Asia. We also invested in our site in Dongguan, China, where a new lab for product and styling development was commissioned. These investments are very much in line with our strategic plan to align our business for growth in key high growth markets. They also emphasize our commitment to become strategic partners to our large OEM customers, such as the big furniture manufacturers in China and Vietnam. Supplying smaller custom workshops is also fundamental to our strategy and we are working hard to increase our industrial distribution channels around the world to better service these customers and grow our share in this segment. Another key development took place in Europe, where we integrated our adhesives and coatings activities under one management team to better drive performance and realign the business to what we anticipate will be the new norm once Europe settles down.
One of the real growth areas we have identified is in flat line (or flat pack) furniture. These are products the consumer purchases in a box and assembles themselves. We continue to invest in technology and styling developments focused on creating new products for this market. Consumers are increasingly demanding more sustainable end products, which in turn dictates our product offering. This includes coatings and adhesives with lower VOC, reduced CO2 emissions and reduced use of hazardous materials. The market has responded favorably to a new line of sustainable products we launched in North America as part of our Chemcraft brand. Airguard includes both GREENGUARD certified and formaldehyde-free finishes which provide sustainable alternatives for office furniture and kitchen cabinets. A number of new eco-premium adhesives were also introduced, which helped our customers achieve their sustainability objectives.
Geo-mix revenue by destination