Carpet is a global business for Mohawk Industries

By: | at 07:00 PM | Channel(s): International Trade  

By Karen E. Thuermer
That soft carpet that touches your bare toes or tiles that adorn your bathroom are not just important elements that make up your home or office. They may come from one of the largest manufacturers and distributors of flooring product in the world—Mohawk Industries Inc., a company that during the last four or five years has realized between $5-8 billion in sales per year.
Headquartered in Dalton, GA, Mohawk is a leading supplier of flooring for both residential and commercial applications. Mohawk offers a complete selection of carpet, ceramic tile, laminate, wood, stone, vinyl, and rugs. These products are marketed under the premier brands in the industry, which include Mohawk, Karastan, Lees, Bigelow, Dal-Tile, American Olean, Unilin and Quick Step. During the first three quarters of this year, net sales for Mohawk weighed in at $4.3 billion, an increase of approximately 5 percent. For that nine-month period, net earnings were $131 million.
Commenting on the third quarter results, Jeffrey S. Lorberbaum, chairman and CEO, stated, “The Company’s third quarter results reflect an improvement in sales and earnings over last year even with increased raw material costs and consumer reluctance to invest in renovation projects.”
Lorberbaum reveals that sales in both the residential and commercial categories expanded and that commercial renovation lead the growth and new residential continued to lag.
Global Business
The company has numerous manufacturing plants throughout the Southeast, particularly Georgia, the Carolinas, and Virginia. In addition, Mohawk has tile manufacturing facilities in Mexico, the result of a merger with Dal-Tile Mexico S.A. de C.V. It operates an engineered wood plant in Malaysia, and a joint venture in China where it has a minority interest in one of the top ten Chinese ceramic tile manufacturers. The company also recently purchased a building in Russia for laminate manufacturing.
Although Mohawk executives are not certain whether or not there’s much opportunity to expand in the United States other than through product diversification, they do see continued growth through acquisitions.
A good example is Dal-Tile Mexico, which Mohawk acquired four years ago. That business is expanding as product line is broadened to satisfy all price points. The plant near Mexico City is being constructed to produce non-porcelain ceramic tile at much lower costs, beginning in mid-2012. New workforce management systems, increased truck utilization rates and new shipping channels are reducing freight and distribution costs.
“In addition, the company is looking to expand its exports to foreign markets,” says Dan Sullivan, manager of global logistics, Mohawk.
Sullivan spoke to a large gathering of shippers and transportation providers during the Georgia Logistics Summit in Atlanta last May.
Lorberbaum reports that Mohawk’s European flooring business is gaining share.
The company is growing its presence in the United Kingdom, Russia, and – farther afield, Australia.
“We are growing our Russian customer base to support the new plant under construction near Moscow,” Lorberbaum says.” In addition, the consolidation and expansion of our Malaysian wood manufacturing operations should be complete by first quarter 2012.”
No. 1 Position
Currently, Mohawk enjoys a position of being the No. 1 brand in the industry. Sullivan attributes its success to being a low cost producer.
“We can make every product from door and bath mats and area rugs, any shape color,” he says. “We have our own designers, and we can design make any product if there is a demand.”
A reason for Mohawk’s success is the fact it has many customers to whom the company services. Of course, Sullivan adds that this can also be a challenge when it comes to logistics, since each customer has differing ways of doing business.
The customers in our home division, for example, are big retailers,” he says.
Such customers may have large orders and long lead times for orde

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American Journal of Transportation