News Analysis

Forbo Linoleum for Sale

The news is not necessarily bad for Forbo’s linoleum manufacturing business, argues Denny Darragh, Forbo Flooring’s general manager: “The flooring business is the only business that could get a partner.” He explained that, while the linoleum business is struggling in Western Europe, it has significant potential in other parts of the world. Manufacturing linoleum is capital-intensive, with a cost of $85 million to build a factory and a large inventory tied up for weeks in drying lines. Forbo isn’t in a position to finance the needed expansion on its own.

Other industry observers are not as optimistic. “You don’t go and sell the flagship of your fleet, if that’s the one with the highest potential profit margins,” noted one source. Nevertheless, for the time being the news has not affected Forbo Flooring’s activities, including a full marketing campaign for its new color lines. And with the right partner, linoleum could yet reestablish a factory in North America. “Whoever is going to come in to lay out that kind of money is going to be very committed,” Darragh says. “We’re approaching that critical mass at which a [North American] linoleum factory could be sustained,” he notes.

Published October 1, 2004

(2004, October 1). Forbo Linoleum for Sale. Retrieved from