General State of Interior Fabrics Business

for Fiscal 2000

<Market Size Determination>

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@

February 2002

Nippon Interior Fabrics Association, JAPAN

General Remarks

@Current state of the Interior Fabrics product Market

Window treatment products 256.4 billion yen

Floor covering products 284.1 billion yen

Wall covering products 139.6 billion yen

In fiscal 2000, the interior fabrics industry encountered a severe market, largely unchanged from the previous fiscal year, reflecting a decline in the number of housing starts and weak consumer spending in the face of an uncertain economic outlook. Consequently, the size of the overall interior fabrics products market dropped 2.6% from the previous year (wholesale conversion base).

The market size of the interior fabrics products (wholesale conversion base) in fiscal 2000 was calculated at 256.46 billion yen (a year-on-year decrease of 3.3%) for window treatment products, 284.1 billion yen (increase of 3.6%) for floor covering products and 139.62 billion yen (decrease of 12.2%) for wall covering products.

Compared with fiscal 1999, the industry enjoyed some positive results, including a rise in demand for floor covering products and a limiting to 2.6% the total downturn in the three fields. Nonetheless, the dramatic double-digit decline in wall covering products is worrisome.

The downward trend in the average unit price of curtains will settle. The market size of wallpaper declined 12.2% on a yen basis, although in volume terms the market size was on a par with that of the previous year, suggesting a drop in the unit price.

Window treatment products

The market size of window treatment products in fiscal 2000 was calculated at 150.7 billion yen (a year-on-year decrease of 4.6%) for curtains, 36.09 billion yen (3.6% decrease) for blinds, 32.65 billion yen (2.6% increase) for screens and shades, and 37.02 billion yen (2.5% decrease) for curtain rails. Consequently, the total market size was 256.46 billon yen (3.3% decrease).

The decline in curtain sales in fiscal 1999 was kept to a 2% year-on-year fall from the previous year and the downward trend in average unit prices seemed to halt, following two consecutive years of unprecedented severity, with double-digit declines in curtain sales reflecting dramatic drops in the number of construction starts in the two years starting 1997. The downturn persisted in fiscal 2000, with a 4.6% decline, although the drop remained smaller.

Similarly, blind sales in fiscal 2000 continued to decline (with a year-on-year decrease of 4.0%), influenced by the sluggishness in the mainstay office applications market, inactive consumer spending and a shift to lower prices. The market for blinds has experienced year-on-year declines for consecutive eight years.

Although sales of curtains and blinds experienced declines, the fall was limited. Screen and shade sales actually produced positive results, continuing the year-on-year gains posted in the previous year.

Sales of Roman shades (a year-on-year increase of 12.4%) and pleat screens (16.0% increase) posted double-digit gains for the second consecutive year, although demand for roll screen was down (1.4% decrease).

Contrary to the growth expectations encouraged by rising demand for apartment buildings, curtain rails sales declined 2.5% overall, impacted by the decline in housing starts and other factors. A decline of more than 6% was recorded for functional curtain rails. In contrast, sales of curtain-related products rose for the second consecutive year.

Floor covering products

Floor covering products (floor materials) are highly diverse, and include the leading three floor material products: fabrics, plastic and wood. As in the past, the market size for floor covering products was calculated for carpets and plastic floor materials, as these are the products which the Nippon Interior Fabrics Association (NIF) members most frequently handle.

The market size for floor coverings for fiscal 2000 was calculated at 242.7 billion yen (a year-on-year increase of 3.4%) for carpets, 41.4 billion yen (5.1% increase) for plastic floor materials, bringing the total to 284.1 billion yen (3.6% increase). Although the number of housing and commercial building starts declined slightly from the previous fiscal year, the overall market expanded with successful results in new construction and renovations, especially office buildings.

The decline in carpet sales was limited, although sales of tufted carpets, the mainstay product, fell for the third straight year. Contrasting to a fourth year of decline in needle-punched carpets, gains were recorded in sales of tufted tiles (a year-on-year increase of 5.1%), woven carpets (1.5% decrease), plain-fabrics carpets (100% increase) and hooked rugs (9.5% increase). Sales of imported products rose (up 9.0%), achieving a dramatic turnaround from the double-digit declines of the previous three years.

As in previous years, market size was determined for three types of plastic flooring only: composition tiles, regular vinyl sheets and cushioned flooring. In fiscal 2000, the market size for composition tiles declined for the second consecutive year, while the market expanded from the previous fiscal year for regular vinyl sheets, thanks to an increase in the floor area of new buildings such as IT-related plants, and for cushioned flooring, reflecting an increase in residential building space.

Wall covering products

The market size of wall covering products was determined by using wallpaper again. Wallpaper Production and Shipment Statistics prepared by the Wall Covering Association of Japan was used as the reference material. For other wallpaper products sold in such stores do-it-yourself (DIY) outlets, which are not included in the above statistics, an excerpt from the wallpaper statistics, gVolume and Value of Products Sold,h produced by the Household Fusuma and Wallpaper Association, was added as reference material.

The market size for wallpaper for fiscal 2000 was calculated at 139.62 billion yen, a decline of 12.2% from the previous fiscal year. This dramatic contraction in the wallpaper market during fiscal 2000 appears to have stemmed from a reaction to the increase in number of housing starts of the previous year, which itself reflected public-sector financing and tax system reform. A serious issue is the severe decline in the market in yen-terms, despite the slight increase in shipment quantities. The result suggests that the wallpaper market is more severe than in was in the previous year, the downward trend in sales prices is continuing, and the ratio of mass-produced wallpaper was rise still further.

In contrast, the growing interest in environmental issues meant that this fiscal year saw an impressive rise in paper-made wallpaper, including non-wood paper products, and specific wallpaper including non-PVC resin products (acryl wallpaper and EVA wallpaper). These products are expected to achieve further gains in market share.

[Reference Material]

Trend in New Housing Starts (By Use)

(Unit: 1,000; figures in parentheses are as percentages of previous yeafs figures)

Total

Lived in by owner

Rental

Employee housing

Condominium

Fiscal 1996

1,630 (109.8)

636 (115.4)

616 (109.2)

26 (100.0)

352 (102.0)

Fiscal 1997

1,341 (82.3)

451 (70.9)

516 (85.7)

24 (91.8)

351 (99.6)

Fiscal 1998

1,180 (87.9)

438 (97.1)

444 (86.1)

16 (66.0)

282 (80.4)

Fiscal 1999

1,226 (103.9)

476 (108.7)

426 (95.9)

12 (75.0)

312 (110.6)

Fiscal 2000

1,213 (98.9)

438 (92.0)

418 (98.1)

11 (91.7)

346 (110.9)

Source: gIntegrated Statistics on Construction Workh Ministry of Land, Infrastructure and Transport

[Reference Material]

Trend of Floor Area of New Homes (By Use)

(Unit: 1,000 m2, figures in parentheses are percentages of previous yearfs figures)

Total

Lived in by owner

Rental

Employee housing

Condominium

Fiscal 1996

157,014 (113.7)

89,740 (118.7)

32,678 (110.9)

1,824 (100.9)

32,772 (105.0)

Fiscal 1997

123,751 (78.8)

62,784 (70.0)

26,820 (82.1)

1,726 (94.6)

32,421 (98.9)

Fiscal 1998

110,978 (89.7)

60,916 (97.0)

22,740 (84.8)

1,176 (68.1)

26,145 (80.6)

Fiscal 1999

119,562 (107.7)

66,269 (108.8)

22,662 (99.7)

867 (73.7)

29,764 (113.8)

Fiscal 2000

117,523 (98.3)

60,833 (91.8)

22,154 (97.8)

777 (89.6)

33,759 (113.4)

Source: gIntegrated Statistics on Construction Workh Ministry of Land, Infrastructure and Transport

[Reference Material]

Trends in Floor Area for New Homes

(Unit: 1,000 m2, figures in parentheses are percentages of previous yearfs figures)

Total

Residential

Non-residential

Fiscal 1996

258,361 (111.2)

168,061 (112.7)

90,300 (108.4)

Fiscal 1997

220,580 (85.4)

133,225 (79.3)

87,355 (96.7)

Fiscal 1998

193,353 (87.7)

119,281 (89.5)

74,072 (84.8)

Fiscal 1999

197,017 (101.9)

126,909 (106.4)

70,108 (94.6)

Fiscal 2000

194,481 (98.7)

124,665 (98.2)

69,816 (99.6)

Source: gIntegrated Statistics on Construction Workh Ministry of Land, Infrastructure and Transport

[Reference Material]

Trend of Floor Area of New Non-Residential (By Use)

(Unit: 1,000 m2, figures in parentheses are as percentages of previous yeafs figures)

Office

Store

Factory

Warehouse

School

Hospital

Others

Fiscal 1996

11,801 (107.6)

13,239 (108.5)

16,952 (119.5)

12,036 (117.1)

5,497 (102.3)

4,392 (114.6)

26,383 (99.7)

Fiscal 1997

11,191 (94.8)

14,662 (110.7)

17,247 (101.7)

10,854 (90.2)

4,819 (87.7)

4,301 (97.9)

24,282 (92.0)

Fiscal 1998

8,593 (76.8)

13,289 (90.6)

11,443 (66.3)

8,639 (79.6)

5,071 (105.2)

5,032 (117.0)

22,005 (90.6)

Fiscal 1999

8,801 (102.4)

14,663 (110.3)

10,352 (90.5)

7,062 (81.7)

4,895 (96.5)

5,030 (100.0)

19,306 (87.7)

Fiscal 2000

8,172 (92.9)

11,974 (81.7)

14,152 (136.7)

7,762 (109.9)

4,515 (92.2)

3,923 (78.0)

19,319 (100.1)

Source: gIntegrated Statistics on Construction Workh Ministry of Land, Infrastructure and Transport

Window Treatment Products

[Curtains]

The size of the curtain market in fiscal 2000 was calculated at 150.7 billion yen, down 4.6% from the previous fiscal year.

The downward trend remained, even if the decline this year was small, and the market overall continued to shrink.

A comparison between imports and domestic products shows that the size of the market for domestic products declined from the previous fiscal year for the fourth consecutive year (a year-on-year decrease of 5.9%), while the market for imports recovered from a four-year slump to post dramatic gains and reach 11.5 billion yen, on a par with the market in 1998.

A breakdown by type and product category shows that order-made curtains fell 2.9% from the previous fiscal year, despite some evidence of good progress, and ready-made products also experienced a severe decline of around 20%.

These figures imply a severe situation around the curtain market.

A loom by product category shows a general decline in the figures.

The total production of curtains during fiscal 2000 was 171 million m2, down 5% from the previous fiscal year and exhibiting a clear correlation between production and market size.

These results likely reflect a fall in the number of housing starts (1,210,000 houses/apartments per year, down 1.1% from the previous fiscal year) and the sustained downturn in average unit prices.

Statistical data used in determining market size

1) Domestic products: The average price unit and the ratio of order-made and ready-made products were determined through a fact-finding survey of NIF members, based on curtain shipments in volume and yen terms by product category of NIF members.

2) Imported products: The market share was determined by estimating the share in the imported curtain market held by NIF members based on a fact-finding survey concerning imports of NIF members.

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Table 1. Size of the Curtain Market (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total size

1,876 (91.6)

1,611 (85.9)

1,579 (98.0)

1,507 (95.4)

@ Domestic products

1,724 (91.8)

1,496 (86.8)

1,479 (98.9)

1,392 (94.1)

Imported products

152 (89.4)

115 (75.7)

100 (87.0)

115 (114.9)

Table 2. Size of the Domestic Curtains (by type and category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

1,724 (91.8)

1,496 (86.8)

1,479 (98.9)

1,392 (94.1)

@ Ready-made products

378 (88.9)

290 (76.7)

268 (92.4)

216 (80.6)

Order-made products

1,346 (92.6)

1,206 (89.6)

1,211 (100.4)

1,176 (97.1)

Yarn-dyed products

932 (91.1)

816 (87.6)

804 (98.5)

752 (93.5)

@ Ready-made products

200 (88.8)

147 (73.5)

137 (93.2)

105 (76.6)

Order-made products

732 (91.7)

669 (91.4)

667 (99.7)

647 (97.0)

Cloth-dyed products

418 (95.0)

326 (78.0)

325 (99.7)

315 (96.9)

@ Ready-made products

91 (90.0)

65 (71.4)

58 (89.2)

49 (84.5)

Order-made products

327 (96.4)

260 (79.5)

267 (102.7)

266 (93.1)

Lace casement

374 (90.3)

355 (94.9)

350 (98.6)

326 (99.5)

@ Ready-made products

87 (87.8)

78 (89.7)

73 (93.6)

62 (84.9)

Order-made products

287 (91.1)

277 (96.5)

277 (100.0)

264 (95.3)

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[Reference Material]

Curtain Production Volume by Product Category

(Unit: 1,000m2; figures in parentheses are percentages of previous yeafs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

200,895 (103.4)

181,660 (90.4)

179,540 (98.8)

170,616 (95.0)

@ Yarn-dyed products

85,278 (102.6)

84,499 (99.1)

82,574 (97.7)

80,775 (97.8)

Cloth-dyed products

48,032 (107.0)

35,651 (74.2)

36,196 (101.5)

34,392 (95.0)

@ Race-casement

67,585 (101.9)

61,510 (91.0)

60,770 (98.8)

55,449 (91.2)

Chemical Fibres Association, fiscal 1997 to 1999

[Blinds]

The market size for blinds in fiscal 2000 reached 29.77 billion yen (a year-on-year decrease of 4.0%) for Venetian blinds and 6.32 billion yen (1.4% decrease) for vertical blinds, producing a total size of 36.09 billion yen (3.6% decrease).

The market for blinds in fiscal 2000 continued to contract, influenced by the slump in the mainstay office applications market, weak consumer spending, fewer housing starts, a shift from blinds to fabrics products and a shift in preference to lower prices.

Newly planned products were aggressively introduced in a bid to activate the market, such as blinds made for specific purposes to adapt windows of diversified houses and buildings, as well as environmentally-friendly blinds, which helped limit the declines.

Statistical data used in determining market size

@

1)gReport on the Shipment of Interior Fabrics, etc. (2002),h NIF

2)g2000 Statistics on Blinds,h Nippon Blind Industry Association

Table 3. Market Size of Blinds (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Blinds total

458.2 (96.9)

395.0 (86.2)

374.2 (94.7)

360.9 (96.4)

@ Venetian blinds

377.7 (96.5)

329.0 (87.1)

310.1 (94.3)

297.7 (96.0)

Vertical blinds

80.5 (98.9)

66.0 (82.0)

64.1 (97.1)

63.2 (98.6)

@

@[Screens]

The market size for screens in fiscal 2000 stood at 22.78 billion (a year-on-year decrease of 1.4%) yen for roll screens, 7.62 billion yen (12.4% increase) for Roman shades and 2.25 billion yen (16.0% increase) for pleat screens, resulting in a total of 32.65 billion yen (2.6% increase).

Despite the exacerbated circumstances, the overall screen market repeated the previous fiscal yearfs result of steady growth, producing an expanded market. Reviewing the market by product category, more lower-priced products were handled in roll screens, resulting in a slight decline from the previous year. Sales of Roman shades showed steady development with improvements in operability and styles to allowing more options for users. With the raised awareness a new element in the market, the fiscal 2000 market for pleat screens grew to 2 billion yen, greatly stimulating demand.

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Statistical data used in determining market size

1) gReport on the Shipment of Interior Fabrics, etc. (2002),h NIF

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Table 4. Market size of Screens and Shades (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

328.9 (104.2)

302.9 (92.1)

318.3 (105.1)

326.5 (102.6)

@ Roll screens

252.2 (103.4)

227.8 (90.3)

231.1 (101.4)

227.8 (98.6)

Roman screens

63.8 (105.1)

60.5 (94.8)

67.8 (112.1)

76.2 (112.4)

Pleated screens

12.9 (116.2)

14.6 (113.2)

19.4 (132.9)

22.5 (116.0)

[Curtain rails]

The size of the curtain rail market in fiscal 2000 was determined to be 32.88 billion yen (a year-on-year decrease of 5.8%) for curtain rails, 3.18 billion yen (25.7% increase) for related products and 960 million yen (81.1% increase) for others, producing a total of 37.02 billion yen (2.5% decrease)

In fiscal 2000, the overall sales of curtain rails fell below that of the previous fiscal year for the first time in two years (in yen terms), affected by the decline in housing starts (1,210,000 houses/apartments per year, a year-on-year decrease of 1.1%) and other factors that stymied expectations of steady growth.

Sales of functional rails decreased by more than 6%, reflecting an insufficient increase in the number of new houses and other influences, while the sale of decorative rails was also down from the previous year given declining unit prices, especially for wooden rails. Taking into account the decline in the use of curtains and the increase in demand for Roman shades and pleat screens, the contraction of the curtain rail market probably reflects the transfer of market needs from curtains to screens.

Statistical data used in determining market size

1) Materials for determining market size from the Japan Curtain Rail Industry Association

Table 5. Market size of Curtain Rails (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Curtain rail total

431.8 (95.1)

373.5 (86.5)

379.8 (101.7)

370.2 (97.5)

Curtain rails

390.0 (95.2)

338.1 (86.7)

349.2 (103.3)

328.8 (94.2)

Functional rails

267.3 (93.1)

236.0 (88.3)

251.7 (106.7)

234.6 (93.2)

Decorative rails

122.7 (99.9)

102.2 (83.2)

97.5 (95.4)

94.2 (96.6)

Related parts

31.4 (85.6)

24.3 (77.4)

25.3 (104.1)

31.8 (125.7)

Others

10.4 (140.5)

11.1 (106.2)

5.3 (47.7)

9.6 (181.1)

@Floor Covering Products

[Carpeting]

The market size for carpets in fiscal 2000 was determined to be 242.7 billion yen (a year-on-year increase of 3.4%). A breakdown of this figure shows the market of domestic products amounted to 142.2 billion yen (0.3% decrease) and that for imported products reached 100.5 billion yen (9.0% increase), a turnaround from the previous fiscal year with imports rising dramatically in both volume and yen terms. Despite growth of about 3% in the overall production volume of domestic products, the disparity between that figure and the growth in market size is believed to reflect the continued severity of market prices.

On the other hand, the size of the market for imported carpets achieved a significant increase in terms of overall import volume (a year-on-year increase of 26%) and distribution volume (9% increase). The volume of imports from China showed the greatest gains, with a year-on-year increase of 96%, followed by Belgium with gains of 45%. A year-on-year increase of 10% or more was also achieved in volume terms for imported products from Thailand, India and Korea. On the contrary, imports from the United States continued the previous yearfs decline. Looking at the trends in imports by product category, volume of sales of Wilton and other woven carpets showed remarkable growth with a year-on-year increase of 35%, and characteristically the market for imported Wilton greatly exceeded that of imported tufted carpets in both volume and yen terms..

In the construction-related market, the number of construction starts of new houses declined slightly to 1,210,000 (a year-on-year decrease of 1.1%), a radical change from the previous year. The area of construction starts of non-residential buildings also declined slightly from fiscal 1999, resulting in a general decrease despite slight growth in the Tokyo metropolitan area and the Chubu region.

In this environment, sales of tile carpets rose dramatically in new constructions and renewals, especially in the office market, with a year-on-year increase of 6%. Carpet pieces are also showing favorable growth. On the other hand, sales of roll carpets and needle-punched carpets are in decline.

The total number of manufactured automobiles recovered to the 10,000,000 unit, achieving 10,140,000 (a year-on-year increase of 2.5%). For passenger vehicles, the production volume was 3,380,000 (7.0% increase) in manufactured ordinary vehicles, 1,280,000 (increase of 2.1%) in light vehicles and 3,700,000 (increase of 0.4%) in subcompact vehicles, which contributed to an increase in sales of carpets and optional mats installed in automobiles. Increasingly, needle-punched carpeting is likely to be used to reduce the vehicle weight and cost, given its energy-saving function.

Compared with the results of the previous fiscal year by textile material, polypropylene found increased application in tile carpets, carpet pieces and automobile accessories, polyester grew generally, and the volume of use of nylon and wool changed little. The volume of use of acryl, on the other hand, decreased overall, despite the rise in rugs and mats.

Statistical data used in determining market size

1) Average unit price: gFact-Finding Survey on Shipments of Interior Fabrics, etc. (2000),h NIF

2) Domestic products: gSurvey Report of Consumed Volume of Fibres in Interior Goods,h Japan Chemical Fibres Association

gStatistics of Yearly Tufted Carpet Production,h Japan Carpet Association

3) Imported products: Trade Statistics, Ministry of Finance

4)Statistical materials from Japan Automobile Manufacturers Association, Inc.

5)gNumber of Housing Starts in 2000h (outline), Ministry of Land, Infrastructure and Transport

Table 6. Market Size of Carpets (wholesale basis)

(Unit: 100 million yen; figures in parentheses are percentages of previous yearfs figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

2,925 (97.4)

2,574 (88.0)

2,347 (91.2)

2,427 (103.4)

@ Domestic Products

1,648 (104.4)

1,507 (91.4)

1,425 (94.6)

1,422 (99.8)

Imported Products

1,277 (89.6)

1,067 (83.6)

922 (86.4)

1,005 (109.0)

@

Table 7. Market Size of Domestic Carpets (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Category

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

1,648 (104.4)

1,507 (91.4)

1,425 (94.6)

1,422 (99.8)

@ Tufted

1,023 (109.4)

912 (89.1)

871 (95.5)

857 (98.4)

@ Regular use

912 (109.4)

811 (88.9)

767 (94.6)

749 (97.7)

Automotive use

111 (109.9)

101 (91.0)

104 (103.0)

108 (103.8)

Tufted tile

331 (104.1)

319 (96.4)

296 (92.8)

311 (105.1)

Woven carpet

69 (83.1)

62 (89.9)

65 (104.8)

66 (101.5)

Plain weave

6 (85.7)

6 (100)

3 (50.0)

6 (200.0)

Hooked rug

56 (86.2)

54 (96.4)

63 (116.7)

69 (109.5)

Needle punch

156 (96.9)

150 (96.1)

117 (78.0)

110 (94.0)

@ Regular use

63 (81.8)

61 (96.8)

61 (96.8)

42 (68.9)

Automotive use

93 (110.7)

89 (95.7)

65 (73.0)

68 (104.6)

Others

7 (77.8)

4 (57.1)

10 (250.0)

3 (30.0)

@

[Plastic Floor Covering Materials]

The market size of plastic floor covering materials in fiscal 2000 was determined for composition tiles, regular vinyl floor sheets and cushioned flooring.

Among composition tiles, semi-hard types were mainly employed to determine the market size. Having long been in use with its high durability, the composition tile market had been in gradual decline for some time, owing to the diversification of flooring materials and the decline in the number of building construction start, although there was stable demand for these tiles as inexpensive PVC tiles for general-purpose applications in offices and schools.

The fiscal 2000 market size slowly declined following a radical contraction, especially in fiscal 1999.

A regular vinyl floor sheet lacks a foam layer and is called a double PVC sheet. It is used as a highly-durable basic sheet flooring material in schools, hospitals, factories and offices. The market size in fiscal 2000 grew dramatically to 11.3 billion yen (a year-on-year increase of 9.7%), thanks to active investment in private facilities and especially a rise in the floor area of construction starts of IT-related plants.

The cushioned floor is a highly-decorative flooring sheet with a form layer. The product comes in two types: one for housing and the other for commercial premises. Demand for cushioned floors for commercial premises are in decline; products with a thickness of 2-3-mm that were originally developed for commercial premises are now finding greater application in residential properties, such as housing estates.

Meanwhile, 1.8-mm thick products are mainly used in wet areas such as kitchens, washstands and toilets, and only a small quantity are used per house or apartment. Nonetheless, the market for these products has been stable. Accordingly, sales of cushioned flooring in fiscal 2000 rose to 24.7 billion yen (a year-on-year increase of 4.7%) while the floor area of residential constructions declined 1.8% from the previous year.

The market size for the three kinds of plastic floor covering materials was therefore determined to be 41.4 billion yen (a year-on-year increase of 5.1%).

Statistical data used in determining market size

@

Shipment volume: Statistical volume from the Interior Floor Industrial Association

Table 8. Market Size of Plastic Floor Covering Materials (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Category

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

429 (97.3)

401 (93.5)

394 (98.3)

414 (105.1)

@ Composition tiles

62 (89.9)

62 (100.0)

55 (88.7)

54 (98.2)

Regular vinyl sheets

110 (95.7)

103 (93.6)

103 (100.0)

113 (109.7)

Cushioned flooring

257 (100.0)

236 (91.8)

236 (100.0)

247 (104.7)

Wall Covering Products

[Wallpapers]

The size of the wallpaper market in fiscal 2000 was 139.62 billion yen, a year-on-year decrease of 12.2%. A breakdown by category shows that the market size was 7.79 billion yen (a year-on-year decrease of 5.6%) for paper wallpaper, 4.46 billion yen (15.0% decrease) for cloth wallpaper, 108.94 billion yen (15.5% decrease) for vinyl wallpaper, 360 million yen (14.3% decrease) for chemical fiber wallpaper, 10.33 billion yen (6.3% decrease) for inorganic wallpaper, 7.67 billion yen (51.9% increase) for special wallpaper and 70 million yen (30.0% decrease) for others. Demand for imported products also experienced a drastic fall, to 510 million yen (67.5% decrease).

Total shipments of domestic wallpaper were up slightly (69,000 m2) from the previous year, to 737,460,000 m2, staying over the 700,000,000-m2 market for the second consecutive year. By product category, double-digit growth was achieved for paper-made wallpaper (a year-on-year increase of 11.9%) and special wallpaper (increase of 81.0%), similar to the previous year.

The key factors in the double-digit decrease in market size likely include a response to the rise in housing constructions triggered by the increase in public-sector financing and the tax system reform of the previous fiscal year. For reference, the number of housing starts of housing for fiscal 2000 was 1,210,000 (a year-on-year decrease of 1.1%). Even more, the severe situation of the wallpaper market also reflects the continued downward trend in sales prices given fierce competition in the market, as well as the growing percentage of mass-produced wallpaper, shown in the decline in the market size in yen terms, even though it expanded on a volume basis.

Judging by shipment volumes, remarkable growth can again be seen this fiscal year in demand for paper-made wallpaper, including non-wooden materials, as well as demand for special wallpaper including non-PVC resin products (olefin wallpaper) such as acrylic and EVA wallpapers. This suggests that suppliers drastically elevated the number of such product items and the materials are being accepted in the market in response to such growing environmental concerns as contamination of room air and issues concerning disposal and recycling. Major developers tend to employ non-PVC wallpaper for buildings and the next year should witness continued further growth in the market share accounted for by these products.

Vinyl wallpapers continue to account for a high proportion of overall demand for wallpaper. At 85.4% on a volume basis, the share held by vinyl wallpapers was down a slightly 2%, but still maintained an overwhelming share. These products still fall into the low-price group, although safety-conscious and environmentally-friendly wallpapers are more developed and industry PR activities are starting to show success. The industry hopes that the market for old houses will pick up and the demand for reform will expand as a result of the Housing Market Arrangement Action Program (Action Program) published by the Ministry of Land, Infrastructure and Transport in August 2001.

Statistical data used in determining market size

1) The Wall Covering Association of Japanfs gWallpaper Production and Shipmenth extracted from the gWACOA REPORTh was used. The Wall Covering Association of Japan is the leading domestic organization in its industry, consisting of approximately 90 domestic wallpaper manufacturers. To control fire retardant wall decoration materials in accordance with the provisions of the Building Standards Law, the Association required member companies to compile a monthly report on both production and shipments, which are compiled as the gWallpaper Production and Shipment Volume.h This report was therefore used as it was seen to have sufficient reliability.

In the absence of official data on imported products, the Association used the gReport on Imports of Interior Fabricsh complied by the NIF as a basis for estimating the market share held by imported products in NIF member market.

* There may be some discrepancies in the totals for each item in each wallpaper tables because of rounding.

@

Wallpaper sold at outlets such as mass merchandisers involved in the Do-It-Yourself market is not included in gWallpaper Production and Shipment Volumes,h produced by the Wall Covering Association of Japan and used for this Market Size Determination. Hence the wallpaper section in the gVolume and Value of Products Soldh by the Household Fusuma and Wallpaper Association was extracted and included here for reference.

The market size in fiscal 2000 was 2.06 billion yen (a year-on-year decrease of 21.5%). This shows a greater slump that outdid the decline in the market for wallpaper as a construction material. Vinyl wallpaper sales decreased 23% from the previous year, while paper-made wallpaper rose 71%. The result obviously reflects usersf stronger interest in paper-made wallpaper given concerns about indoor environment issues.

Table 9. Market Size of Wallpaper (domestic products, imported products, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

1,990.9 (90.0)

1,567.4 (78.7)

1,589.6 (101.4)

1,396.2 (87.8)

@ Domestic products

1,965.9 (89.8)

1,550.6 (78.9)

1,573.8 (101.5)

1,391.0 (88.4)

Imported products

25.0 (104.6)

16.8 (67.2)

15.8 (94.0)

5.1 (32.3)

@

Table 10. Market Size of Wallpaper (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Total

1,990.9 (90.0)

1,567.4 (78.7)

1,589.6 (101.4)

1,396.2 (87.8)

@ Paper wallpaper

72.2 (82.3)

71.7 (99.3)

82.5 (115.1)

77.9 (94.4)

Cloth wallpaper

72.3 (88.0)

56.1 (77.6)

52.5 (93.6)

44.6 (85.0)

Vinyl wallpaper

1,674.7 (89.8)

1,304.3 (77.9)

1,288.7 (98.8)

1,089.4 (84.5)

@ Chemical fiber wallpaper

5.0 (76.9)

3.5 (70.0)

4.2 (120.0)

3.6 (85.7)

@ Inorganic wallpaper

131.6 (94.1)

99.5 (75.6)

110.2 (110.8)

103.3 (93.7)

@ Special wallpaper

34.7 (106.4)

31.8 (91.6)

50.5 (158.8)

76.7 (151.9)

@ Other wallpaper

0.2 (66.7)

0.5 (250.0)

1.0 (200.0)

0.7 (70.0)

@

[Reference Material]

Wallpaper Production and Shipment

(Unit: 1,000 m2; figures in parentheses are as percentages of previous year's figures)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Paper wallpaper Production

16,789 (83.9)

18,769 (111.8)

26,077 (138.9)

29,079 (111.5)

Shipment

16,036 (82.1)

18,504 (115.4)

25,487 (137.7)

28,521 (111.9)

Cloth wallpaper Production

7,304 (97.4)

5,087 (69.6)

5,489 (107.9)

4,913 (89.5)

Shipment

7,653 (97.3)

5,526 (72.2)

5,678 (102.8)

5,070 (89.3)

Vinyl wallpaper Production

707,572 (97.0)

611,789 (86.5)

637,771 (104.2)

627,259 (98.4)

Shipment

701,990 (95.7)

622,169 (88.6)

644,674 (103.6)

629,695 (97.7)

Chemical fiber wallpaper Production

271 (46.1)

452 (166.8)

198 (43.8)

184 (92.9)

Shipment

236 (43.1)

440 (186.4)

202 (45.9)

203 (100.5)

Inorganic wallpaper Production

48,398 (98.1)

39,774 (82.2)

46,335 (116.5)

47,104 (101.7)

Shipment

48,651 (99.2)

39,954 (82.1)

46,536 (116.5)

47,550 (102.2)

Special wallpaper Production

10,810 (129.9)

11,057 (102.3)

15,180 (137.3)

26,939 (177.5)

Shipment

10,270 (134.4)

10,721 (104.4)

14,424 (134.5)

26,114 (181.0)

Other wallpaper Production

51 (83.4)

203 (398.0)

387 (190.6)

324 (83.7)

Shipment

51 (94.2)

191 (374.5)

391 (204.7)

308 (78.8)

Total Production

79,1196 (97.0)

68,9131 (86.8)

731,437 (106.1)

735,802 (100.6)

Shipment

78,4888 (96.0)

69,7505 (88.9)

737,392 (105.7)

737,461 (100.0)

[Source: Wall Covering Association of Japan]

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@

¡Reference Material

Household Fusuma and Wallpaper Association gVolume and value of products soldh

(Unit: 1,000m, 1,000 yen)

Fiscal 1997

Fiscal 1998

Fiscal 1999

Fiscal 2000

Percentages of previous year's figures

Adhesive Volume

3,182

2,917

3,450

2,562

74.3

Value (including imported products)

1,726,679

1,476,822

1,825,639

1,233,958

67.6

Re-damp PVC volume

1,431

1,277

6,618

1,037

15.7

@ PVC value

636,024

490,396

610,930

468,839

76.7

@ Cloth volume

0

0

2

0

@
@ Cloth value

0

0

758

0

@
@ Paper volume

864

867

637

770

120.9

@ Paper value

139,910

433,081

131,065

224,700

171.4

@ Imported volume

244

1

24

2

0.8

@ Imported value

150,000

100

3,560

2,290

64.3

Non-glue Volume

208

209

265

542

204.5

@ Value

34,091

40,865

54,185

134,119

247.5

Total volume

5,929

5,271

11,007

4,913

44.6

Total value

2,686,704

2,441,264

2,626,138

2,063,906

78.6

For fiscal 2000, from January to December 2000

Interior Fabrics Association

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Nippon Interior Fabrics Association JAPAN
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