Dixie Group ponders buying yarn dyeing facility

Dixie Group ponders buying yarn dyeing facility

September 13th, 2012 by Ellis Smith in Business Around the Region

Pictured is a detail of one of the spools, or packages, of thread in the creeling area of the Dixie Group plant in Eton, Georgia.

Photo by Jake Daniels/Times Free Press.

The Dixie Group soon could acquire a continuous yarn dyeing facility in Calhoun, Ga., according to a news release.

The Chattanooga-based carpetmaker's purchase will mark a turnaround from the carpet industry's recession-era trend of shuttering plants, slashing jobs and selling assets.

"It's been really quiet for a while, and it's good to see some investments and shifting of resources," said Kemp Harr, publisher of Floor Focus Magazine.

For Dixie, which has not owned a continuous dye facility since it sold its North Georgia dyeing operation to Shaw Industries in 2003, the modern plant will help Dixie save money when creating its high-end carpet, said Dan Frierson, chairman and CEO of Dixie.

"For certain product categories, continuous dye is more efficient and lower cost method of dyeing," Frierson said.

Dixie is set to acquire the facility in October from Milliken & Company, which manufacturers specialty chemicals, floor coverings and performance materials.

"It's all about being more competitive," Frierson said. "It will make us more competitive in every area that we produce through this plant."

The company has sought to cut costs and shake up its management structure after a second-quarter earnings report showed a drop in overall sales.

Sales in the second quarter fell by $1 million to $129 million in the quarter over the prior year. That reflected a 17.3 percent decrease in commercial carpet sales, even as residential carpet sakes ticked up 5.6 percent over the prior year.

Though the thrust of the purchase is lowering the cost of residential carpet production, the plant's ability to quickly change from one color to another also helps Dixie with contract jobs and commercial carpet as well, Frierson said.

"This simply will set us up for growth in some product categories that we have not been heavily in for the last several years," he said.

The Calhoun plant Dixie is set to acquire was formerly owned by Bob Weiner of Constantine Carpets, who sold his company to Milliken & Company.

Milliken, however, has its own dye plant.

"They don't need it and Dixie can use it," Harr said, "This is another feather in Dixie's Hat."