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Propex To Shutter Nashville, Ga., Plant, Expand Hazlehurst, Ga., Plant

Propex Operating Co. LLC — a Chattanooga, Tenn.-based producer of man-made carpet backing and a provider of infrastructure and packaging solutions — has announced plans to shutter its Nashville, Ga., plant and consolidate most of the woven geotextiles production at that location to its carpet backing manufacturing facility in Hazlehurst, Ga., over the next six months.

The company reports it has a surplus of North American capacity directly resulting from Federal defense cuts, stimulus elimination and the industry's shift to nonwoven products, and that it reduced staff at the Nashville facility over the past few months in an effort to better align the capacity and demand for its woven geotextiles products.

"While this activity had a positive impact on the unit cost, continued soft demand eroded the gains realized by that temporary action," said Mike Gorey, president and CEO, Propex. "The economic indicators tell us that it is prudent to consolidate our manufacturing operations into one location at this time as our current global footprint provides more than enough capacity to service the stabilization and woven GEO marketplace. Our strategic business model shifts our focus to be the worldwide solutions provider in growing markets, and therefore the Nashville facility will be closed.

"This decision is not a reflection on the workforce in Nashville. It is instead the reflection of an aggressive marketplace driving pricing pressure from domestic and imported competitors," Gorey continued.

In addition, Propex will make a multi-million dollar investment to expand the Hazlehurst plant's capacity to begin producing Isis®, its recycled polyester woven backing for commercial carpet tile. The company has seen increasing global demand for Isis, which it introduced in 2011 and currently manufactures at its plant in Germany.

"Our decision to manufacture Isis in Georgia shows our commitment to provide innovative products to support the continued growth of the US carpet industry," said Dave Gartshore, vice president, Propex Furnishings Solutions and Curv® Composites Divisions. "Our strategy is to maintain our leadership position continuing to innovate and enhance Isis for commercial tile as well as developing other innovative products for the markets we serve."

Propex expects the Hazlehurst expansion to be complete during the summer of 2013, and reports it will create a significant number of jobs.

June 11, 2013

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