Engineered Floors to spend $500 million, create 2,400 jobs in North Georgia

Engineered Floors to spend $500 million, create 2,400 jobs in North Georgia

May 2nd, 2013 by Ellis Smith in Local Regional News

Larry Kilgo, left, and Walt Turner work on a coating machine at the Engineered Floors carpet manufacturing plant near Calhoun, Ga.

Photo by John Rawlston/Times Free Press.

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BY THE NUMBERS

* Investment: $450 million

* Jobs: 2,000 to 2,400

* State incentives: $70 million plus sales tax exemptions

Source: Georgia Department of Economic Development

REGIONAL MEGA PROJECTS

Engineered Floors -- Announced May 2013:

* Investment: $450 million

* Jobs: 2,000 to 2,400

Amazon -- Announced Nov. 2010:

* Investment: $164 million

* Jobs: More than 1,600

Wacker -- Announced Feb. 2009:

* Investment: $2 billion

* Jobs: 650

Volkswagen -- Announced July 2008

* Investment: $1 billion

* Jobs: 2,000

CARPET'S SPREAD

Jobs and payroll in third quarter of 2012

* 22,374 jobs in 195 facilities

* 225.1 million in wages

* $601.7 million product exported (all of 2012)

Source: Georgia Department of Labor

Carpetmaker Engineered Floors will spend almost half a billion dollars on two new facilities that together will employ up to 2,400 workers in North Georgia's industrial heartland.

The private investment marks the largest expansion of permanent jobs in the Chattanooga region since Volkswagen announced its Passat plant in 2008, and the biggest private investment since Wacker's 2009 decision to locate its polysilicon plant in Bradley County, Tenn.

Over the next five years, Engineered Floors will build a manufacturing and distribution facility in Whitfield County and another factory in Murray County, Gov. Nathan Deal announced Wednesday. Though officials declined to reveal the exact locations, the plants will be outside Dalton, the "carpet capital of the world" and manufacturing hub for Georgia.

"The story of Engineered Floors is the story of a Georgia-grown company's continued commitment to, and investment in, Northwest Georgia," Deal said. "Georgia provides the business environment, workforce training and unparalleled logistics infrastructure to fuel growth for the floor-covering industry, which has been a cornerstone of the state's economy."

More than 90 percent of all carpet sold in the U.S. and 54 percent of the country's carpet exports are made in the state, according to the Georgia Department of Economic Development.

But until today, the state's floorcovering industry has struggled to shake off the effects of the Great Recession. While the less-profitable apartment market has grown, the demand for carpet in single-family homes and commercial facilities has recovered more slowly in a stagnant housing market. Engineered Floors has bucked the trend and built market share since its founding in 2009 by building new plants that save time, water and energy compared to competitors' older plants.

"The expansion of Engineered Floors is uplifting news for Northwest Georgians, who have persevered through the recent years of economic hardship," U.S. Rep. Tom Graves, R-Ga., said in a news release. Murray and Whitfield counties lie in Graves' 14th Congressional District.

"Many families will be relieved to hear about the thousands of new job opportunities, and we're all proud to see Dalton and the surrounding area remain the Carpet Capital of the World," he added.

As a qualifying "mega project" under Georgia's tax code, Engineered Floors' new mills will be eligible for up to $69.7 million in tax credits and Quick Start training, and also will get sales tax exemptions on energy use and construction materials, said Alison Tyrer, spokeswoman for the economic development.

Carpet pioneer and Engineered Floors founder Bob Shaw, who already employs 1,400 workers in Northwest Georgia, credited the state's business-friendly tax breaks as a big factor in his privately-held company's latest expansion.

"We are pleased that these new facilities will allow for further job creation for the area," Shaw said. He lauded lawmakers for passing a law exempting manufacturing from energy sales taxes in the 2012 session, saying it "makes a significant difference to manufacturers looking to grow and succeed."

While officials cheered Engineered Floors' expansion as a positive development for the state, Floor Focus magazine publisher Kemp Harr said it could be bad news for competitors Mohawk Industries, Beaulieu of America and Shaw's former company that he sold to billionaire Warren Buffet, Shaw Industries.

"He'll end up taking market share from other people," Harr said. "We've suffered almost a six-year slump, and the numbers are looking better, the market is recovering -- but not at that pace."

The carpet market improved somewhat in 2012, growing at 2.5 percent in terms of dollars, and 5 percent by volume, Harr said. Engineered Floors has blown those numbers out of the water, and the latest expansion is only a continuation of its upward trajectory.

Since 2009, the company has hired 1,400 workers, built more than 1 million square feet of manufacturing space and acquired Dream Weaver Carpets to enter the single-family residential market and gain a foothold with retailers.

"They came out of nowhere, and they've developed a substantial level of business," Harr said. "I think he'll branch out into other areas."

The Associated Press contributed to this report.

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