Revolutionizing the $37 Billion Building Materials Industry: An Phat Plastic’s Bold Entry

The global vinyl flooring market is projected to witness significant growth in the upcoming years. According to a Fortune Business Insights analysis report, the market size was valued at $36.63 billion in 2023 and is expected to reach $66.94 billion by 2032, with a compound annual growth rate of 6.8% during the forecast period.

This growth is largely driven by the world’s increasing population and rapid urbanization. According to the United Nations, the global population is expected to reach almost 10 billion by 2050, and the resulting migration to cities is creating a higher demand for housing and infrastructure.

Rapid urban development is expected to drive the need for more housing. Between 2018 and 2050, it is predicted that multi-housing units will account for more than half of the average daily residential buildings constructed, approximately 10,000 buildings per day.

Additionally, consumers’ increasing disposable income has allowed them to invest in luxurious housing projects or renovate their current homes. The predicted rise in housing maintenance needs is expected to boost the global vinyl flooring market during the forecast period.

Vinyl flooring is a popular choice in the construction industry due to its relatively low maintenance, superior moisture resistance, and durability compared to other flooring solutions. Its use in residential buildings enhances aesthetics and provides durability and comfort. Consumers’ growing preference for sustainable flooring solutions is expected to drive global product consumption.

In North America, the demand for commercial facility upgrades, including offices, hospitals, and schools, is driving the growth of the vinyl flooring market. Additionally, the region’s demand for durable and easy-to-install flooring materials supports market growth.

The increasing preference for cost-effective flooring options among construction contractors in South America, the Middle East, and Africa will present significant growth opportunities during the forecast period. The rise in major construction projects in these regions is expected to boost vinyl flooring usage.

In other markets, such as Asia-Pacific, the vinyl flooring market size reached $12.43 billion in 2023. This region is expected to witness exponential growth due to the advancement of the construction industry and planned projects in leading countries like China and India. The increasing urbanization in the region has also driven the adoption of renovations in commercial and residential buildings, leading to a higher demand for vinyl flooring.

An Phat Bioplastics (code: AAA), a leading company in this market, has plans to produce a new building construction vinyl flooring product. According to a report by FPT Securities (FPTS), AAA aims to produce 6 million square meters of vinyl flooring annually, showcasing their confidence in the demand and growth potential of this segment.

AAA’s main products, SPC and LVT vinyl flooring, with SPC being the flagship product, will be primarily exported, with the US as the key market. FPTS reports that SPC flooring sales in the US are growing rapidly and gradually replacing traditional flooring options due to their ease of installation, durability, affordability, and waterproof nature.

Additionally, SPC flooring originating from Vietnam is predicted to quickly gain market share in the US due to the shift away from Chinese products. Currently, over 90% of the US demand for SPC flooring is met through imports, with products from China holding the largest market share (~61.1% in 2023). However, the growth of Chinese products is slow due to the US tariffs imposed on them since 2018.

FPTS assesses that AAA has a positive outlook for its building construction vinyl flooring product. The new business segment is expected to contribute 10% to AAA’s consolidated gross profit in 2028 and has high growth potential due to the product’s advantages over traditional flooring and AAA’s ability to leverage existing resources from its sister company, which manufactures similar products.

For instance, calcium carbonate powder, which constitutes about 70% of the raw materials used in producing building construction vinyl flooring, can be sourced from AAA’s subsidiary, An Tien Industries Joint Stock Company (HII). Additionally, AAA can leverage the expertise and experience in production and sales from another company within the An Phat Holdings group, An Cuong.

An Cuong currently manufactures similar flooring products with a capacity of 3 million square meters per year, primarily for export to the US market. From the perspective of the An Phat Holdings group, the new AAA factory can be seen as an expansion of An Cuong’s operations, especially considering that An Cuong is already operating at maximum capacity and has no plans for further expansion.