General State of Interior Fabrics Business

for Fiscal 1997

<Market Size Determination>

General Remarks

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Current State of the Interior Fabrics Product Market

In fiscal 1997, the interior business market continued to deteriorate with each month owing to the reaction to the upsurge in demand in the previous year attributable to the anticipation of a hike in the consumption tax, flagging consumer spending and economic uncertainties. The large decrease in construction starts, which serves as the demand index for the interior goods business, had particularly severe repercussions for the industry, which greatly depends on new demand, and produced the sluggish demands in all product areas.

Heavy discounting in construction order allied with discount competition among stores continued, making it extremely difficult for the industry to generate profits. The fact that the fall in value outstripped the decline in volume is a key characteristic of this fiscal year.

The market size (wholesale conversion base) in fiscal 1997 was calculated at 309.49 billion yen for window treatment products, 335.40 billion yen for floor covering products and 199.09 billion yen for wall covering products.

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Window treatment products

The market size for window treatment products in fiscal 1997 was calculated at 187.6 billion yen for curtains (year-on-year decrease of 8.4%), 45.82 billion yen for blinds (3.1% decrease), 32.89 billion yen for screens and shades (4.2% increase), and 43.18 billion yen for curtain rails (4.9% decrease). Therefore, the total market size was 309.49 billion yen (5.9% decrease).

Weaker curtain sales during the period were a reflection of an 18% decline in the number of housing starts, which are the main source of demand for curtains, and a falling unit price rate owing to increasingly severe competitive discounting. Although the market topped 200 billion yen during the previous fiscal year, it fell back to 180 billion yen this year. A look at the domestic product market size by type shows that all product areas experienced slower demand this year, compared with the previous year. Only print curtains managed to limit the scale of decrease, owing to the popularity of cloth-dyed products. The market size for imported products fell to fiscal 1994 levels, partly because of the weakness of the yen.

Blind sales have fallen on a year-on-year basis for the last consecutive three years, reflecting a decline in mainstay office applications and a market trend towards fabrics. Further, lower end products are grabbing a greater share of the market in this area.

Turning to screens and shades, roll screens still continued to post steady growth, while Roman shades, with its expanding selection owing to a market trend in favor of fabrics, also showed growth of 5%. Pleated screens managed double-digit growth (16.2%), although the size of the market is small.

Sales of curtain rails were down approximately 5% over the previous fiscal year, reflecting significantly fewer housing starts, although decorative rails maintained the previous year sales. There are concerns that unit prices may fall in this market segment as well, owing to more intense competition with imported products.

Floor covering products

Floor covering products are highly diverse, although the leading three products are fabrics, plastics and wood. As in the past, the markets for carpet and plastic floor products were determined, as these are the products which Nippon Interior Fabrics Association (NIF) members most frequently handle.

The market size for floor coverings for fiscal 1997 was 292.5 billion yen for carpet (a year-on-year decrease of 2.6%) and 42.9 billion yen for plastic floor material (2.7% decrease), bringing the total to 335.4 billion yen (2.8% decrease).

In the fiscal 1997 floor covering market, domestic products posted a year-on-year increase (4.4% increase) centered on tufted carpets, reflecting a market trend toward rugs combined with wooden flooring and demand for tile carpets created by office renovations. However, demand for imported products declined considerably (10.4% decrease) owing to the weak yen, which brought the total to a 2.6% decrease. Both tufted and needle punch carpets showed continued growth both for automobile applications.

As in previous years, market size was determined for only three types of plastic flooring for which data are available, namely composition tiles, regular vinyl sheets and cushioned flooring. The market growth for the last several years has been sluggish and this trend was sustained with a 2.7% decline this fiscal year over the previous year. However, demand for renovations of commercial floor areas increased and demand from medical and welfare facilities has been growing in this area, though this does not appear in the figure for the three types. The reason is that homogeneous and PVC sheets with a foam layer, two mainstay products, are not included in the figure. More work is required in producing the determination in this area.

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Wall covering products

The association again used wallpaper as a yardstick to determine the size of the wall covering market. 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 as do-it-yourself (DIY) outlets, which are not included in the above statistics, the Association took an excerpt from the wallpaper statistics produced by the Household Fusuma and Wallpaper Association.

The market size for wallpaper in fiscal 1997 was 199.09 billion yen (a year-on-year decrease of 10.0%).

With a considerable drop in the number of housing starts, the main source of demand for wallpaper, the wallpaper market in fiscal 1997 was down from the previous year both in terms of production and shipment volumes, the first fall in five years, and dipped below the 800 million square meter mark. The percentage of mass-produced, lower-priced products increased, encouraging a decline in value terms.

Although environmental issues have come to the forefront in this area and demand for environmentally-friendly wallpaper has increased, as seen in the growth in demand for particular wallpapers, it cannot be denied that the market remains price-oriented. A rapid response is therefore required, such as wholehearted measures by the entire industry to address environmental issues and the implementation of an industrial waste disposal system.

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[Reference Material]

Trend in New Housing Starts (By Use)

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

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Total

Lived in by owner

Rental

Employee housing

Condominium

Fiscal 1993 1,510 (106.3) 537 (111.5) 652 (94.9) 31 (89.5) 290 (134.0)
Fiscal 1994 1,561 (103.4) 581 (108.2) 574 (88.1) 28 (89.6) 378 (130.1)
Fiscal 1995 1,485 (95.1) 551 (94.8) 564 (98.2) 26 (92.4) 345 (91.3)
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)

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[Reference Material]

Trend of Floor Area of New Homes (By Use)

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

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Total

Lived in by owner

Rental

Employee housing

Condominium

Fiscal 1993 134,809 (110.8) 73,600 (111.2) 33,263 (99.4) 2,204 (91.3) 25,741 (131.6)
Fiscal 1994 146,616 (108.8) 80,605 (109.5) 30,347 (91.2) 1,998 (90.7) 33,667 (130.8)
Fiscal 1995 138,139 (94.2) 75,632 (93.8) 29,479 (97.1) 1,808 (90.5) 31,221 (92.7)
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)

[Reference Material]

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

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

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Office

Store

Factory

Warehouse

School

Hospital

Others

Fiscal 1993 12,796 (69.2) 10,528 (85.2) 14,167 (74.8) 11,460 (75.4) 5,930 (91.3) 2,686 (105.3) 26,610 (88.6)
Fiscal 1994 11,073 (86.5) 10,627 (100.9) 13,663 (96.4) 10,555 (92.1) 5,416 (91.3) 3,221 (119.9) 26,297 (98.8)
Fiscal 1995 10,972 (99.1) 12,201 (114.8) 14,182 (103.8) 10,275 (97.4) 5,376 (99.3) 3,831 (118.9) 26,460 (100.6)
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)

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Window Treatment Products

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[Curtains]

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The curtain market size in fiscal 1997 was calculated to be 187.6 billion yen, representing a year-on-year decrease of 8.4%.

The favorable growth in demand for order-made curtains of the previous year reversed itself, significantly impacted by the social phenomenon that is the recession that followed the rise in the consumption tax, and the constant growth trends over the past several years ended with a considerable year-on-year decrease.

The market trend in the first half of fiscal 1997 was somehow maintained by the aftermath of the boom in the previous year. However, it appears that the second half experienced its worst ever drop.

A breakdown by domestic and imported products shows that both products fell considerably. For domestic products, the result was 172.4 billion yen (year-on-year decrease of 8.2%) and for imported products, it was 15.2 billion yen, a decline of 10.6% from the previous year.

A look at the domestic product market size by type reveals that order-made curtains reached 134.6 billion, the 7.4% decline reversing the double-digit growth of the previous year, and with ready-made products reaching 37.8 billion yen, down 11.1%, the overall market was weak.

This likely reflects the considerable drop in the number of housing starts (1.34 million, or 82% as percentage of previous year's figures), a slump in the housing environment with, for example, sluggish rates of new condominium contracts, and an accelerating trend toward lower prices, which was also the case in the previous year. This presents a significant problem and calls for future action.

Among product types, cloth-dyed products posted a small decrease of 5%, while both yarn-dyed products (ready-made products in particular) and lace casement products fell by nearly 10%.

Total production of curtain products in fiscal 1997 was 200.895 million square meters, up 3.4% from the previous financial year. This is because the production volume was not completely in hand by the end of the strong previous year and the production basis grew more than 3%, revealing a growing divergence from the wholesale basis market size.

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 thorough a fact-finding survey of NIF members, based on the curtain production volume results of the Chemical Fibres Associationfs "Survey Report of the Consumed Volume of Fibers in Interior Goods" (excluding accordion and blind cloth).

            2) Imported products: Owing to a lack of official data, the market size was determined by estimating the share in the curtain market held by NIF members based on fact-finding survey concerning imports of NIF members.

  • The market size of both domestic and imported products are based on the average unit price of NIF members and any difference between this price and the actual average price in the market cannot be verified.

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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's figures)

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total size 1,810 (107.0) 1,875 (103.6) 2,047 (109.1) 1,876 (91.6)
@ Domestic products 1,657 (105.5) 1,700 (102.6) 1,877 (110.4) 1,724 (91.8)
Imported products 153 (126.4) 175 (114.4) 170 (97.1) 152 (89.4)

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Table 2. Market Size of Domestic Curtains by Type and Category (wholesale basis)

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 1,657 (105.5) 1,700 (102.6) 1,877 (110.4) 1,724 (91.8)
@ Ready-made products 388 (104.6) 404 (104.1) 425 (105.1) 378 (88.9)
Order-made products 1,269 (105.8) 1,296 (102.1) 1,452 (112.0) 1,346 (92.6)
Yarn-dyed products 910 (100.1) 909 (99.9) 1,023 (112.5) 932 (91.1)
@ Ready-made products 194 (85.1) 209 (107.7) 225 (107.6) 200 (88.8)
Order-made products 716 (105.1) 700 (97.8) 798 (114.0) 732 (91.7)
Cloth-dyed products 368 (116.1) 398 (108.2) 440 (110.5) 418 (95.0)
@ Ready-made products 103 (121.2) 101 (98.1) 101 (100.0) 91 (90.0)
Order-made products 265 (114.2) 297 (112.1) 339 (114.1) 327 (96.4)
Lace casement 379 (110.2) 393 (103.7) 414 (105.3) 374 (90.3)
@ Ready-made products 91 (103.4) 94 (103.3) 99 (105.3) 87 (87.8)
Order-made products 288 (112.5) 299 (103.8) 315 (105.3) 287 (91.1)

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[Reference Material]

Curtain Production by Product Category (Source: Japan Chemical Fibers Association)

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 171,685 (104.2) 177,455 (103.4) 194,356 (109.5) 200,895 (103.4)
@ Yarn-dyed products 77,427 (96.3) 75,268 (97.2) 83,138 (110.5) 85,278 (102.6)
Cloth-dyed products 35,120 (118.4) 38,932 (110.9) 44,878 (115.3) 48,032 (107.0)
Lace casement 59,138 (108.0) 63,255 (107.0) 66,340 (104.9) 67,585 (101.9)

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[Blinds]

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The market size for blinds in fiscal 1997 came to 37.77 billion yen (a year-on-year decrease of 3.5%) for Venetian blinds (horizontal type), and 8.05 billion yen (1.1% decrease) for vertical blinds, producing a total size of 45.82 billion yen (3.1% decrease). (See Table 3.)

The fall in the fiscal 1997 blind market compared to the previous year reflected the sluggish growth in demand in the office market and the considerable drop in the number of housing starts, with background factors including a hike in the consumption tax, the early stating of demand encouraged by low interest rates, flagging consumer spending, and uncertainties in the economy.

The shift from blinds to fabrics also impacted the drop in unit prices and the downsizing of the market.

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Statistical data used in determining market size

1) Market size was determined using "Report on the Shipment of Interior Fabrics, etc." issued by Textile Division, Consumer Goods Industries Bureau, Ministry of International trade and Industry and a fact-finding survey of NIF members.

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Table 3. Market Size of Blinds (wholesale basis)

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Blinds total 507.9 (95.6) 487.1 (95.9) 472.7 (97.0) 458.2 (96.9)
@ Venetian blinds 421.6 (96.1) 403.2 (95.6) 391.3 (97.0) 377.7 (96.5)
Vertical blinds 86.3 (93.1) 83.9 (97.2) 81.4 (97.0) 80.5 (98.9)

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[Screens]

The screen market size in fiscal year 1997 amounted to 25.22 billion yen (a year-on-year increase of 3.5%) for roll screens, 6.38 billion yen (5.1% increase) for Roman shades, and 1.29 billion yen (16.2% increase) for pleated screens, resulting in a total of 32.89 billion yen (4.2% increase). (See Table 4.)

The fiscal 1997 screen market achieved steady expansion despite the deterioration in the market environment.

An increase in adaptations of roll screens for home renovations and replacement while the number of housing starts fall, along with an increase in the volume of roll screens sold at mass merchandisers and home centers, helped achieve the expansion in market size. Another factor is that the product is now a standard contender in the office market.

Roman shades performed well, aided by the trend of making greater use of fabrics, and the fact that they are available in such a wide range of designs (greater availability of fabrics and styles).

Pleated screens achieved steady growth as a new contender without being affected by the market environment owing to the small size of the market.

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Statistical data used in determining market size

1) Market size was determined by using "Report on the Shipment of Interior Fabrics, Etc." issued by the Textile Division, Consumer Goods Industries Bureau, Ministry of International Trade and Industry and a fact-finding survey of NIF members.

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

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 268.9 (117.8) 292.1 (108.6) 315.6 (108.0) 328.9 (104.2)
@ Roll screens 224.3 (116.9) 230.1 (102.6) 243.8 (106.0) 252.2 (103.5)
Roman screens 34.1 (111.8) 51.4 (150.7) 60.7 (118.1) 63.8 (105.1)
Pleated screens 10.5 (181.0) 10.6 (101.0) 11.1 (104.7) 12.9 (116.2)

[Curtain rails]

The curtain rail market size in fiscal 1997 was determined to be 39.0 billion yen (a year-on-year decrease of 4.8%) for curtain rails, 3.14 billion yen for related products (14.4% decrease) and 1.04 billion yen (40.5% decrease) for others, or a total of 43.18 billion yen (4.9% decrease). (See Table 5.)

In the fiscal 1997 curtain rail market, the overall volume was reduced from the previous year owing to a considerable drop in the number of housing starts against a backdrop of a reaction to hike in the consumption tax, the early sating of demand in the residential market encouraged by low interest rates, and other factors. While overall volume fell, the needs for decorative rails remain high and kept the overall drop minor. However, the market for functional rails contracted considerably owing to the overall reduction in volume and a shift to decorative rails.

The fact that the unit prices at mass merchandisers and home centers fell because of the price competition with imported products also encouraged a downsizing of the market for curtain rails and related products.

Statistical data used in determining market size

1) Market size was determined using data by Japan Curtain Rail Industry Association.

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

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Curtain rail total 403.1 (109.4) 417.7 (103.6) 453.9 (108.7) 431.8 (95.1)
@ Curtain rails 362.8 (110.7) 376.5 (103.8) 409.8 (108.8) 390.0 (95.2)
@ Functional rails 269.8 (106.9) 273.2 (101.3) 287.0 (105.1) 267.3 (93.1)
Decorative rails 93.0 (123.7) 103.3 (111.1) 122.8 (118.9) 122.7 (99.9)
Related parts 33.7 (105.3) 34.2 (101.5) 36.7 (107.3) 31.4 (85.6)
Others 6.6 (75.0) 7.0 (106.1) 7.4 (105.7) 10.4 (140.5)

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Floor Covering Products

[Carpeting]

The market size for carpeting in fiscal year 1997 was determined to be 292.5 billion yen (a year-on-year decrease 2.6%). A breakdown of this figure shows the market for domestic products amounted to 164.8 billion yen (4.4% increase) and that for imported products 127.7 billion yen (10.4% decrease). While domestic products performed well, the market for imported products was down from the previous year owing to the weak yen. In determining market size, the Association used wholesale unit prices derived by taking into account the situation at each NIF member company based on "Report on the Shipment of Interior Fabrics, etc.," compiled by the Ministry of International Trade and Industry and a fact-finding survey of NIF members, as well as figures from other statistical data.

In the fiscal 1997 carpet market, the main product, tufted carpets for regular use, showed nearly double-digit growth from the previous year, helped by a shift from wooden flooring to carpet owing to lower priced condominiums and the combination with the wooden flooring (the development of rug applications). Tufted carpets for automobiles also showed similar growth owing to the trend towards higher end models in the automobile market.

Tufted tiles staged a recovery with year-on-year growth of 4.1%, thanks to booming demand for office flooring renovation.

Needle punch carpets enjoyed sustained high growth from the previous year. This is a result of changes in the specifications of commercial automobile flooring from PVC to needle punch carpets and an increase in the production volume of RV wagons owing to the decrease in that of sedans.

Demand for woven carpets fell considerably, reflecting the development of imports from such countries as Korea and Indonesia as standard products in the lower price band.

Imported products continue to fluctuate each year, primarily because of the adjustment of distribution stocks and also reflecting a weak yen throughout fiscal 1997. According to the report on Japanese Trade prepared by the Ministry of Finance, carpet imports in fiscal 1997 fell 15.0% in terms of volume, and 10.4% by value.

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Statistical data used in determining market size

1) Average unit price: NIF fact-finding survey

2) Domestic products: Japan Chemical Fibres Associationfs "Survey Report of Consumed Volume of Fibers in Interior Goods" and Japan Carpet Association's "Tufted Carpet Production Monthly Report"

3) Imported products: Ministry of Finance Monthly Report of Japanese Trade

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Table 6. Market Size of Carpets (wholesale basis)

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 3,049 (94.7) 2,935 (96.3) 3,003 (102.3) 2,925 (97.4)
@ Domestic Products 1,593 (81.7) 1,552 (97.4) 1,578 (101.7) 1,648 (104.4)
Imported Products 1,456 (114.6) 1,383 (95.0) 1,425 (103.0) 1,277 (89.6)

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

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

Category

Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 1,593 (81.7) 1,552 (97.4) 1,578 (101.2) 1,648 (104.4)
@ Tufted 937 (86.0) 940 (100.3) 935 (99.5) 1,023 (109.4)
@ Regular use 811 (87.3) 835 (103.0) 834 (99.9) 912 (109.4)
Automotive use 126 (78.8) 105 (83.3) 101 (96.2) 111 (109.9)
Tufted tile 361 (85.1) 314 (87.0) 318 (101.3) 331 (104.1)
Woven carpet 83 (46.6) 77 (92.8) 83 (107.8) 69 (83.1)
Plain weave 3 (50.0) 7 (233.3) 7 (100.0) 6 (85.7)
Hooked rug 61 (77.2) 51 (83.6) 65 (127.5) 56 (86.2)
Needle punch 141 (87.6) 151 (107.1) 161 (106.6) 156 (96.9)
@ Regular use 80 (80.0) 74 (92.5) 77 (104.1) 63 (81.8)
Automotive use 61 (100.0) 77 (126.2) 84 (109.1) 93 (110.7)
Others 7 (53.8) 12 (171.4) 9 (75.0) 7 (77.8)

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[Reference Material]

Carpet Production Volume by Product Category

(Unit: 1000 m2; figures in parentheses are percentages of the previous year's figures)

Category

Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 133,223 (98.7) 135,130 (101.4) 140,205 (103.8) 137,537 (98.1)
@ Tufted 75,634 (96.4) 76,722 (101.4) 76,395 (99.6) 82,370 (107.8)
@ Regular use 60,410 (100.1) 63,527 (105.2) 63,846 (100.5) 69,978 (109.6)
Automotive use 15,224 (84.3) 13,195 (86.7) 12,549 (95.1) 12,392 (98.7)
Tufted tile 19,933 (98.7) 18,025 (90.4) 19,713 (109.4) 20,860 (105.8)
Woven carpet 2,422 (87.3) 2,227 (91.9) 2,216 (99.5) 2,032 (91.7)
Plain weave 332 (102.5) 335 (100.9) 338 (100.9) 243 (71.9)
Hooked rug 1,537 (91.8) 1,280 (83.3) 1,321 (103.2) 1,189 (90.0)
Needle punch 32,959 (105.8) 36,193 (109.8) 39,976 (110.5) 39,097 (97.8)
@ Regular use 15,671 (108.9) 16,160 (103.1) 16,791 (103.9) 13,464 (80.2)
Automotive use 17,288 (103.2) 20,033 (115.9) 23,185 (115.7) 25,633 (110.6)
Others 406 (100.0) 348 (85.7) 246 (70.7) 214 (87.0)

[Source: Japan Chemical Fibers Association]

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[Plastic Floor Covering Materials]

As in previous years, the market size of plastic floor covering materials was determined for only three types of plastic flooring, namely composition tiles, regular vinyl sheets and cushioned flooring. Homogeneous tiles, PVC sheets with a foam layer, and soft composition vinyl flooring tiles are not included in the figure.

Although there is stable demand for composition tiles as general tiles in offices and schools, the composition tile market has been in decline, as it has been a long time since tile carpets are replacing them in office floors and flooring in schools are diversifying. Partly because of the decline in school and office construction, the market size for fiscal 1997 was 6.2 billion yen (a year-on-year decrease of 10.1%).

The regular vinyl flooring sheet is called double PVC sheet and is used in schools, hospitals, factories and offices. Although it was supported by growth in factory related construction, the market size fell to 11 billion yen (down 4.3%) partly because of the increased use of composition PVC sheets etc. in schools, hospitals and welfare facilities for elderly people.

There are two types of cushioned floors, one used in for commercial premises and the other for housing. The first type is facing a declining market share, while the latter commands a strong share driven by applications for the floors of those rooms in the home that are subject to water, such as kitchens, bathrooms and toilets. Despite a decrease in the number of housing starts, the total market size for the fiscal 1997 reached 25.7 billion yen, on a par with the previous year owing to substantial demand from condominiums in the first half.

The market size for the three kinds of plastic floor covering materials was therefore determined to be 42.9 billion yen, down 2.7% from the previous year.

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Statistical data used in determining market size

1) Average unit price: NIF fact-finding survey

2) Production volume: Statistical materials of the Interior Floor Industrial Association

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

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 466 (96.9) 446 (95.7) 441 (98.9) 429 (97.3)
@ Composition tiles 79 (97.5) 76 (96.2) 69 (90.8) 62 (89.9)
Regular vinyl sheets 119 (88.8) 115 (96.6) 115 (100.0) 110 (95.7)
Cushioned flooring 268 (100.8) 255 (95.1) 257 (100.8) 257 (100.0)

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Wall Covering Products

[Wallpapers]

The wallpaper market in fiscal year 1997 contracted 10.0% from the previous fiscal year to 199.09 billion yen. A breakdown by category reveals that the figures were 7.22 billion yen for paper wallpaper (a year-on-year decrease of 17.7%), 7.23 billion yen for cloth wallpaper (down 12.0%), 167.47 billion yen for vinyl wallpaper (decrease of 10.2%), 500 million yen for chemical fiber wallpaper (decrease of 23.1%), 13.16 billion yen for inorganic wallpaper (decrease of 5.9%), 3.47 billion yen for special wallpaper (increase of 6.4%), and 200 million yen for other wallpaper (decrease of 33.3%).

The volume of shipments of domestic wallpapers in fiscal 1997 fell to 784.89 million square meters, compared to the previous fiscal year's total shipments, which exceeded 800 million square meters, which was the fourth consecutive year in which a new record was set. The results this year reflect fewer housing starts and the reaction following the upsurge in demand in anticipation of a hike in the consumption tax. Constant growth in new housing no longer exists and the market is facing a severe environment. The wallpaper market has been endeavoring to create demand for home renovation. This will become even more important in the future.

The fact that the reduction in value terms is large in comparison to the fall in volume terms is evidence of a further decline in sales prices, revealing severe market competition and a rise in the percentage of mass-produced wallpaper.

Judged by shipment volumes, demand for vinyl wallpaper as a proportion of overall demands remained at 90%, a slight reduction given the move away from polyvinyl chloride and vinyl in response to environmental concerns (manifested in the specification of other materials). It shows that manufacturers have made progress in their efforts to eliminate the misunderstanding surrounding vinyl wallpaper.

The size of the wallpaper market contracted 17.9% in fiscal 1997, a reverse from the strong growth of the previous year. The reason for the market decline, despite the support of environmental issues, is likely to line in the work method (despite significant progress, full understanding has yet to be achieved). Cloth wallpaper fell for the consecutive year (2.7% down from the previous fiscal year). Inorganic wallpaper fell 0.8% following a decline in the previous year.

As environmental issues came into the spotlight, special wallpapers, with 34.4% year-on-year growth, were the only type of wallpaper to record growth, bolstered by growth in olefin, acrylic non-PVC wallpapers and painted wallpaper. These product types are expected to diversify as new materials arrive in the future.

Statistical data used in determining market size

1) In the absence of official data on imported products, the Association used the "Report on Imports of Interior Fabrics" complied by the Ministry of International Trade and Industry as a basis for estimating the market share held by imported products in NIF member markets.

2) The Wall Decoration Material Association's "Wallpaper Production and Shipment Volume" was also used. The Wall Decoration Material Association is the leading domestic organization in its industry, consisting of approximately 100 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 "Wallpaper Production and Shipment Volume." This report was therefore used as it was seen to have sufficient reliability.

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

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Table 9. Market size of Wallpaper (Domestic products, imported products, wholesale basis)

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 2,095.6 (109.9) 2,114.9 (100.9) 2,213.1 (104.6) 1,990.9 (90.0)
@ Domestic products 2,083.5 (109.5) 2,090.1 (100.3) 2,189.2 (104.7) 1,965.9 (89.8)
Imported products 12.1 (268.9) 24.8 (205.0) 23.9 (96.4) 25.0 (104.6)

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

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Total 2,095.6 (109.9) 2,114.9 (100.9) 2,213.1 (104.6) 1,990.9 (90.0)
@ Paper wallpaper 57.1 (95.5) 67.2 (117.7) 87.7 (130.5) 72.2 (82.3)
Cloth wallpaper 102.7 (93.2) 89.8 (87.4) 82.2 (91.5) 72.3 (88.0)
Vinyl wallpaper 1,759.1 (111.6) 1,782.5 (101.3) 1,864.0 (104.6) 1,674.7 (89.8)
Chemical fiber wallpaper 6.5 (75.6) 7.5 (115.4) 6.5 (86.7) 5.0 (76.9)
Inorganic wallpaper 165.9 (111.5) 149.7 (90.2) 139.8 (93.4) 131.6 (94.1)
Special wallpaper 3.6 (171.4) 9.2 (255.6) 32.6 (454.3) 34.7 (106.4)
Other wallpaper 0.6 (75.0) 9.0 (1500.0) 0.3 (3.3) 0.2 (66.7)

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[Reference Material]

Wallpaper Production and Shipment

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

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Fiscal 1994

Fiscal 1995

Fiscal 1996

Fiscal 1997

Paper wallpaper Production 10,555 (95.5) 12,162 (115.2) 20,002 (164.5) 16,789 (83.9)
Shipments 10,475 (98.0) 12,015 (114.7) 19,525 (162.5) 16,036 (82.1)
Cloth wallpaper Production 9,336 (84.8) 8,356 (89.5) 7,499 (89.7) 7,304 (97.4)
Shipments 9,667 (88.3) 8,640 (89.4) 7,869 (91.1) 7,653 (97.3)
Vinyl wallpaper Production 629,845 (114.4) 665,787 (105.7) 729,501 (109.6) 707,572 (97.0)
Shipments 627,288 (114.7) 666,757 (106.3) 733,202 (110.0) 701,990 (95.7)
Chemical fiber wallpaper Production 563 (199.6) 909 (161.5) 587 (64.6) 271 (46.1)
Shipments 557 (207.1) 924 (165.9) 547 (59.2) 236 (43.1)
Inorganic wallpaper Production 54,151 (120.1) 51,143 (94.4) 49,326 (96.4) 48,398 (98.1)
Shipments 53,044 (118.1) 51,206 (96.5) 49,052 (95.8) 48,651 (99.2)
Special wallpaper Production 408 (125.5) 1,864 (456.9) 8,322 (446.5) 10,810 (129.9)
Shipments 253 (137.5) 1,817 (718.2) 7,644 (420.7) 10,270 (134.4)
Other wallpaper Production 127 (81.4) 3,561 (2803.9) 61 (1.7) 51 (83.4)
Shipments 127 (81.4) 3,561 (2803.9) 54 (1.5) 51 (94.2)
Total Production 704,987 (114.0) 743,782 (105.5) 815,298 (109.6) 791,196 (97.0)
Shipments 701,409 (114.2) 744,920 (106.2) 817,893 (110.0) 784,888 (96.0)

[Source: Wall decoration Material Association]

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