published Thursday, May 9th, 2013

Investments could bring jobs back to Dalton

FLOORING JOBS ZOOM

2010: Engineered Floors opens Dalton, Ga., and Calhoun, Ga., plants to serve multifamily carpet market, eventually hiring 1,400 workers.

2011: Belgian company IVC spends $75 million on state-of-the-art vinyl flooring facility, hiring more than 130 workers.

2012: Shaw Industries, Mohawk Industries spend billions revamping plants and making hard surface acquisitions.

2013: Engineered Floors announces plan to spend $450 million on two new plants in Dalton metro area, creating up to 2,400 additional jobs.

2013: Mattex to spend $60 million on new carpet backing plant in Murray County, creating 200 jobs.

Source: News reports

The weather-aged facades of Dalton, Ga.'s shuttered carpet mills soon may receive a fresh coat of paint as the flooring industry prepares to shake off its housing hangover and get the good times rolling.

Industrialists are investing hundreds of millions of dollars in Northwest Georgia -- the carpet capital of the world -- in an attempt to meet demand for new flooring, which is leaping off store shelves in almost every market across the highly segmented industry.

"It's definitely picking up," said Dalton Mayor David Pennington. "We fully expect our community to outperform the national economy and state economy for the next couple years."

That would be a welcome reprieve. Employment in Dalton's manufacturing sector, primarily dependent on a healthy housing market for its livelihood, continued to shrink through March even as employment grew across the U.S.

Manufacturing employment in the Dalton metro area peaked in 2000 at 34,100, which was 11,000 jobs up from a then-low water mark set during the 1991 recession. But a bursting housing bubble along with advances in technology led manufacturers to lay off 14,000 workers in Dalton over the last 13 years, leaving the number of industrial workers at just 20,700 in March.

That's all in the past, said Pennington, who expects pent-up demand for housing to lift Dalton's fortunes.

The problem now is that some workers won't return to the job until their unemployment benefits run out, he said, and others are no longer skilled enough to run the next generation of carpet machines.

"Our issue at the moment is getting enough people back," he said.

New plants

Mattex, a Dubai-based carpet-backing producer, is the latest company to signal its confidence in Georgia's flooring industry. Mattex announced Wednesday it will build a $60 million, 375,000-square-foot extrusion plant in Murray County, creating 200 jobs over the next three years.

"Mattex's expansion speaks to the continued revitalization of the floorcovering industry in Northwest Georgia," said Gov. Nathan Deal.

Industry giants Shaw Industries and Mohawk Industries, which together have spent billions revamping their production lines and buying other manufacturers during the housing crisis, also are expanding, officials say.

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Shaw Industries is rehiring workers, spokeswoman Susan Rich said.

"In 2012 we hired 2,218 associates, which included 176 rehires and 450 new jobs created," Rich said. "With improvements in new home construction and existing home sales, Shaw is experiencing growth in all flooring categories."

The Mattex construction, slated to begin in 2014, will happen alongside another massive project by one of its customers -- Dalton-based Engineered Floors -- which will spend $450 million to build two plants and hire as many as 2,400 workers over the next five years.

And it's not only carpetmakers that are growing. Belgian flooring manufacturer IVC, which built a $75 million vinyl flooring assembly line in 2011, added a third shift in 2012. Mohawk Industries spent more than $1.5 billion over the last few months acquiring hard surface manufacturers The Marazzi Group and Pergo to bolster its noncarpet offerings.

"Everybody's making investments," said Kemp Harr, publisher of Floor Focus magazine. "There is no doubt that all of the markets are on an upward trajectory."

With the rise in home values, officials expect the remodeling market to strengthen by the middle of 2013, Harr said. Along with the white-hot multifamily market and growing new-home construction, luxury sales also are picking up, he said.

Barclay Payne, general manager of Mattex USA, said this is his company's first foray into U.S. manufacturing. Previously, the Dubai-based business operated a trio of factories in Jeddah, Saudi Arabia, as well as in Dubai. A fourth plant in Al Jubail, Saudi Arabia, is also coming online, and Mattex will continue to operate its distribution center in Calhoun, Ga.

"Our demand has increased some 20 percent a year minimum for the last five years, and our existing facilities are oversold," Payne said. "We've maxed our capacity there."

New competition

There are significant cost savings from operating carpet-backing plants -- which extrude petroleum byproducts -- next to the oil reservoirs and refineries in the Middle East, he said, which has helped the company grow. But increasing demand from U.S. customers such as Engineered Floors and shifts in the petroleum market have drawn the eye of the Arabian manufacturer to Northwest Georgia.

"The market, we feel, is at a bottom; we feel that there's going to be some growth over the next three to four years," Payne said.

However, some of the company's growth will come at the expense of competitors, he said.

Mattex will compete indirectly with Chattanooga-based Propex in the carpet-backing and geotextiles market. Propex did not respond to requests for comment.

"There are plenty of people who have looms sitting idle, but we are not one of those companies," Payne said. "We don't have one single loom sitting idle."

Contact staff writer Ellis Smith at esmith@timesfree press.com or 423-757-6315.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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