After a time of uncertainty, executives and employees at Propex say they’re glad to be back on track.
A merger in the middle of a tumultuous economy led Chattanooga-based Propex, a carpet-backing manufacturer, to enter Chapter 11 in January 2008, according to company officers.
Now newly diversified and with significantly reduced debt Propex officials say they’re still the world’s largest independent producer of carpet-backing material, but that’s only a small part of where they want to go from here, said Randy Powell, executive vice president for operations.
“There was a significant debt following the purchase of SI’s geosynthetics and concrete businesses by Propex,” Mr. Powell said. “Then the credit crisis hit, and they couldn’t refinance that debt.”
Wayzata Investment Partners, a Minnesota-based equity group, bought Propex at an auction in 2009 and helped the manufacturer focus on its core competencies, according to Mr. Powell. Propex also emerged from Chapter 11 bankruptcy reorganization in 2009.
“Their (Wayzata) interest was in our competitiveness, our technology and our brand name,” Mr. Powell said. “Now we have very little debt, and we have the time to invest and grow. (Wayzata) has been investing in people, innovation, and brands.”
Propex diversifies
While Propex’s heritage is in carpet backing, the company has been rapidly diversifying its offerings for six months as it capitalizes on being a vertically integrated polypropylene producer.
Propex has 480 employees in the Chattanooga area and about 2,000 worldwide.
CEO and President William S. Brant, Jr. has overseen the development of four technology platforms and 20 products since being appointed to the position following the company’s sale to Wayzata.
Executives are especially excited about the Opus Roof Blanket, which replaces traditional tar paper on roofing jobs, and Curv, a hard woven material that combines ballistic strength with flexibility for a variety of uses. Both have seen success in limited commercial applications, and the company is marketing these and other new technologies.
The challenge for the company will be to fend off rising oil costs, which contribute most of the cost for basic polypropylene, according to Kemp Harr, publisher of Floor Focus magazine.
“Polypropylene is closely tied to the price of oil, so it’s a very volatile business to be in,” Mr. Harr said.
The company has made other changes as well. Propex is now divided into four operating units, including the traditional furnishing and geosynthetics divisions, which have been joined by the concrete and performance technologies divisions, according to Ralph Bruno, executive vice president for global sales and marketing.
“We’re the largest producer of geosynthetics, and we have the world’s largest nonwoven plant,” Mr. Bruno said.
Companywide changes
The plant in Ringgold, Ga., produces synthetic products for site development, road construction, erosion control, landfill membrane reinforcement and automobile airbags, he said.
The Ringgold factory is a microcosm for the changes taking place throughout the company. The 300-employee, 750,000-square-foot structure has seen dozens of successful efforts to increase efficiency, reduce cost and speed up production, according to Vance Grant, plant leader.
“This plant’s come a long way. We’re actually exporting product to China,” he said. “There’s a lot of pride in this community.”
He added that since implementing lean-production techniques, unit cost has dropped 20 percent, sales are rising and the plant is activating an additional line to bring up capacity.
TIMELINE
January 2006 — Propex purchases SI Corp.’s geo and concrete businesses
January 2008 — Propex seeks protection under Chapter 11 bankruptcy to enable restructuring
March 2009 — Bankruptcy Judge approves Wayzata’s bid for Propex’s assets through auction process
April 2009 — Wayzata acquires Propex assets; final sale concluded; William S. Brant Jr. appointed president and CEO
Propex worldwide locations
United States
* Chattanooga
* Bainbridge, Ga.
* Hazlehurst, Ga.
* Nashville, Ga.
* Ringgold, Ga.
International
* Curitiba, Brazil
* Gronau, Germany
* Gyor, Hungary
* Matehuala, Mexico
* Chesterfield, United Kingdom
Source: Propex