Dixie Cranks Up New Plant

Eton, GA, May 15, 2005--According to a the Chattanooga Times, the problem Dan Frierson had a year ago was one any CEO would envy--his carpet company, The Dixie Group, had too much business. "When we came into 2005, business continued to be good," he said, "but it got too good. By April of last year, we couldn't respond (to orders) on a timely basis. He said he couldn't pinpoint a specific reason for the torrent of orders, which forced him to outsource some production. At about the same time, however, Dixie bought a onetime Beaulieu distribution building here. Frierson said there was a specific plan for the 400,000-square-foot structure. "We decided to buy it as a distribution center and then put in tufting equipment," he said. "We'd planned to do that in late 2007 or early 2008." Last year's spike in demand, though, forced Frierson to accelerate that timeline. Dixie got a warehouse up and running there last June, installed the first of six tufting machines in October and the last just this month. John Faulkner, the company's vice president for planning and development, said that means the new tufting plant is running full out. In the next 12 months, he said, some 90 employees, working three shifts, will produce an estimated 5.5 million square yards of carpet, mostly under the Dixie Home brand. "We also have $20 million in finished goods in the warehouse," Faulkner said. Frierson, who also is Dixie's chairman, said the company's investment in the building will be about $10 million. The new facility is roughly the same size as Dixie's Santa Ana, Calif., tufting factory, he said, and slightly smaller than Dixie's Atmore, Ala., tufting plant. "This will allow us to continue pretty rapid growth," he said. "We have room for up to six more tufting machines, so we've got some nice flexibility there." John Baugh, a carpet industry analyst for St. Louis-based Stifel, Nicolaus & Co. Inc., said completion of the Eton plant is a big step for Dixie because the company can control quality and cost to a far greater degree. "They'd been using outside sources" during last year's high demand, he said. "They're expensive and present quality challenges." The new plant is also a big deal for Murray County, said Dinah Rowe, president of the Chatsworth-Murray County Chamber of Commerce. "That building had been empty for a number of years," said Rowe, who added that Beaulieu never had more than "in the neighborhood of 20" full-time workers there. "Ninety jobs is considerably more, of course, and that's good for Eton and Murray County. We love our existing industry, but anytime there's new business, it helps everyone prosper," she said. Establishment of the Eton operation represents another milepost passed by Dixie since its shift from textiles to carpet around the turn of the century. Known for decades as Dixie Yarns, the company once had 10,000 employees, annual sales of $600 million and net income of $20 million, according to Frierson. But the domestic textile industry began to labor in the 1980s, he said, and by the early 1990s, Dixie's top management decided the company had to get out of textiles. Baugh said that decision "in hindsight, was brilliant." "The textile industry slowly eroded to the point where it had virtually no presence in the U.S.," he said. Dixie turned to carpet, for which it was already making yarn. The company bought nine smaller carpet companies in the 1990s, then spent most of the early 2000s streamlining its operations. The company sold Carriage Carpets, one of its 1990s acquisitions, to Shaw Industries in 2003 and set its sights on the high-end commercial and residential markets. Dixie also introduced Dixie Home, a lower priced companion to the company's Masland and Fabrica brands. "We are entering 2004 as a new company," Frierson said at the time.

Print the Article