Wallcovering maker Norwall has announced plans to outsource its North American manufacturing to DID Co. Ltd. of South Korea. Ontario-based Norwall operates in the United States through its subsidiary, Patton Wallcoverings.
Under the agreement, announced Feb. 18, DID will purchase Norwall's manufacturing equipment at its Brampton, Ontario facility for US$1.9 million and relocate the equipment to its facilities in Seoul, South Korea.
Norwall will retain ownership of all of its engravings, print and embossing rollers, designs and collections and will continue to service all present and future product lines worldwide, including the design of all new Norwall products, the company said.
Norwall said it anticipated that manufacturing in Canada would cease by the end of the third quarter of 2010; it has listed its land and buildings in Brampton for sale.
DID has been manufacturing wallcoverings for more than 60 years and is the largest manufacturer of wallcoverings in South Korea. DID is part of a much larger manufacturing conglomerate, with annual sales in excess of US$190 million.
Norwall president and CEO James Patton said increased manufacturing costs due to the decline in the wallcovering market, coupled with the strength of the Canadian dollar, had made it impossible to maintain the company’s profitability.
"Our new arrangement with DID will allow us to maintain our competitive price point, while at the same time preserving our quality of design, our product service and our trade programs,” said Patton. “We are excited with the prospect of returning our company to profitability and, with the involvement of DID, expanding our business in North America as well as export markets.
“We anticipate that we will be introducing four new wallcovering collections in the first quarter of 2010 which, based on preliminary reaction, are expected to be favorably received by both foreign and domestic markets."
Norwall Group (TSX:NGI) designs and distributes quality residential wallpapers and borders to thousands of home centers, specialty stores and mass merchants in Canada and through its wholly owned operating subsidiary, Patton Wallcoverings, in the United States.