Company at a glance
Name: Engineered Floors
Headquarters: The historic city hall building in downtown Dalton, Ga.
Founder, chairman and CEO: Bob Shaw, former head of Shaw Industries
Plants: 800,000 square foot plant in Carbondale under construction, could grow to 2.4 million square feet; other plants include Dalton, Ga. and Calhoun, Ga. locations.
Staff: Growing to 2,400 employees
Products: Carpet for multi-family, residential and commercial customers sold direct to builders and distributors as well as through stores like Home Depot and Lowe’s.
Source: Engineered Floors
The first phase of flooring magnate Bob Shaw's 2.4-million-square-foot carpet mill in Carbondale, Ga., will come to life in June, completing the initial step toward construction of what Shaw says could one day be the largest carpet plant in the world, and one of the largest single manufacturing buildings of any type under the sun.
Boeing's airplane assembly plant in Everett, Wash., generally acknowledged as the largest factory in the world, measures 4.3 million square feet.
Engineered Floors' first 800,000 square feet of carpet manufacturing space will grow the company to 2,000 employees, a workforce that could eventually double to 4,000 employees when the $450 million carpet plant is fully complete in 2016, the carpet pioneer said.
The approaching milestone at the third, and by far the largest of Engineered Floors' new plants, caps five years of explosive growth. The privately-held firm has grown into a fierce competitor in the high-stakes flooring market from what began as an idea he had during his short-lived retirement.
Shaw is no stranger to making waves. He made a name for himself as the carpet industry's original rebel, after he kicked off a chain-reaction of consolidations in the 1980s. Through the years, dozens of independent mills were eventually gobbled up by a few flooring giants. Among those that were doing the gobbling was his namesake, Shaw Industries.
Shaw Industries, which is now a competitor, as well as Mohawk Industries, together produce more than three fourths of all carpet in the United States today. However, Engineered Floors this year moved into the third spot by yardage behind the two venerable giants and the fifth-biggest by revenue, Shaw said, which the company accomplished mostly through straight growth and more efficient production methods that require less water and less manual labor.
Shaw's game plan for Engineered Floors -- which has so far met with success -- is to build new mills using advanced technology, producing a large amount of inexpensive polyester carpet for apartments, duplexes, businesses and other uses that require a high volume of floor covering that will be replaced when landlords sign up new tenants.
Competitors are beginning to follow him down that low-cost road, moving to compete using new machines and recycled content to fend off his attacks on their flank.
"There's nothing brand new about what we're doing," Shaw said. "The difference is we color the polymer before the carpet is made versus some of the other processes. In the polyester business, they have certain amounts of pre-dying, but we have the bulk."
Though Engineered Floors is still working to increase market share in the middle and upper end of the carpet market -- segments that typically make use of tufted nylon and woven wool, respectively -- his solution-dyed tufted polyester carpet continues to gain market share at the expense of his rivals.
"The market hasn't been growing for the period of time we've been in business," Shaw said. "If the market's not growing, we're obviously taking market share."
The carpet market has faced an uneven recovery following the Great Recession, and Shaw has taken advantage of competitors who haven't adapted to the new realities of a post-housing crash economy, he said.
The industry's overall sales fell an estimated 40 percent from the pre-recession peak, but the good news is that it will have recovered 10 percent of that by the end of 2014 if sales continue to grow, Shaw said.
"We are far from being in total recovery," he said. "But if you can average on a compound basis, 5 percent growth over a 5-year period, you've recovered about 70 percent of what you've lost."
Even with a recent uptick in single-family housing starts and continued strength in the apartment market, Shaw believes there's still plenty of room to expand his operations.
"We really do not have anything that says that demand will not return, simply because we don't have a shrinking population, we have a growing population," he said. "When the time comes, I think the carpet industry is going to be very healthy."
If the industry does recover in line with Engineered Floors' recent growth, it still won't bring back the tens of thousands of manufacturing jobs that were lost during the recession. Manufacturers permanently shed 700 million pounds of stapled fiber production, which was more labor intensive, and only partially replaced it with less labor intensive continuous filament process production.
Shaw's solution-dyed polyester production lines, which uses state-of-the-art machines, continue this progression.
"We're more productive," Shaw said. "We eliminate a process."
And for now, that's all he intends to do: produce as much carpet as he can sell as efficiently as he can, priced as low as it takes to gain market share.
It's a simple plan. He's not thinking about any acquisitions, other than his purchase of Dreamweaver Carpet in 2011, at least until he's done building his new plant. He's also not sweating any foreign competitors, which he says can't touch American manufacturers for quality, cost and ease of distribution. And he wants to keep everything right here in Northwest Georgia, where 80 percent of the world's carpet is made.
"Very few carpet manufacturers outside 40-mile radius of Dalton that's ever survived," he said. "We have a moat built around us."
Contact Ellis Smith at firstname.lastname@example.org or at 757-6315
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, ...