As the federal government prepares to pump $550 billion in new funding into transportation and other infrastructure projects under a new spending plan adopted by Congress last month, a Chattanooga-based geotextiles manufacturer is poised to grow its erosion control systems under a new owner.
Chattanooga-based Propex, a leading North American geosynthetics manufacturer with more than $100 million a year in sales to the construction, transportation, flood protection and other industries, was acquired last month by Solmax of Montreal, Canada, a geosynthetics pioneer that has grown to over $1 billion in annual sales. Propex CEO Mike Gorey said the new owners should help expand both the market reach and new product development for Propex.
"The combination of strengths between our companies will lead to long-term growth and increased capacity to address the expanding demand for environmentally sustainable solutions," Gorey said.
Terms of the recent purchase were not disclosed, but company officials said Propex is positioned to capitalize on the coming investments in infrastructure to build in a greener manner with more vegetation and less of a carbon footprint than conventional rip rock and other construction methods.
"This strategic acquisition enables Solmax to expand its sophisticated geosynthetics product portfolio for the benefit of engineers, distributors, contractors, operators and others working in the environmental containment and civil infrastructure sectors," said Jean-Louis Vangeluwe, president of Solmax. "As a global leader in the industry, Solmax is accelerating the promotion and awareness of highly technical and specialized geosynthetic solutions, reducing the carbon footprint of conventional building solutions and mitigating the environmental impact of human activities."
Solmax acquired Propex from a Minnesota investment firm, Wayzata Investment Partners, which bought Propex out of bankruptcy in 2009 after Propex suffered during the Great Recession from a downturn in both carpet and construction. Propex later sold its carpet backing business and its concrete fibers division before looking for a strategic buyer for its remaining geotextiles manufactured at the company's plant in Ringgold, Georgia.
Propex, which has pioneered a number of distinctive geotextile products, once had nearly 2,500 employees at 10 plants around the globe. Propex Fabrics was created in 2004 when BP Amoco Fabrics and Fibers adopted the Propex name. Two years later Propex acquired Synthetic Industries, the Chickamauga, Georgia-based carpet backing manufacturer.
After the housing collapse and Propex's bankruptcy in 2009, Wayzata Investment Partners hired Gorey in 2011 as a turnaround specialist to help transform the former oil company subsidiary from a manufacturing-driven culture into a market-centric company focused on its distinct product lines.
Under Gorey's leadership, Propex has sold off key parts of the company in carpet backing and concrete solutions and the company currently has under 300 employees, including about 225 workers at the company's manufacturing plant in the Rollins Industrial Park in Ringgold, Georgia, and more than 50 employees in the field and at the company's headquarters on Industry Drive in Chattanooga.
Although Propex sold off much of its manufacturing capacity and product lines after its bankruptcy reorganization and realignment, Gorey said the surviving business has plenty of room for growth in the surviving geotextile products and erosion control systems made by Propex.
"The elements of momentum right now — increased infrastructure investment and concerns over climate change and coastal flooding — are areas where we have products in demand, and there are a lot of opportunities for growth right now," Gorey said.
Leveraging geotextiles in transportation construction and erosion control applications has the potential to save billions of dollars in construction costs annually, Gorey said.
The purchase of Propex complements Solmax's existing product portfolio by expanding its presence into the turf-reinforcement market, with a focus on erosion control on steep slopes and vegetated waterways. In addition, innovative products that have been developed by Propex for the pavement-rehabilitation market will also complement Solmax's portfolio.
Propex will continue to operate under its own name and will maintain business as usual for the short term, officials said.
"In time, the expertise of both companies will be combined across all facets of the business, covering manufacturing excellence, quality systems and engineering solutions for the global geosynthetics community," Solmax said in a statement.
Solmax's purchase of Propex comes six months after Solmax acquired TenCate Geosynthetics in Georgia to solidify its position as the world's leading geosynthetics solutions provider.
Contact Dave Flessner at firstname.lastname@example.org or 423-757-6340