Pergo Unsure About Expansion Plans

Garner, NC, June 17--Swedish floor maker Pergo is still considering increasing its U.S. manufacturing capacity despite the recent collapse of its plans to take over a rival, but whether that will lead to an expansion of its Garner plant remains a question mark, according to the Raleigh News & Observer. When Pergo was in the process of buying German-based Witex, industrial recruiters in Georgia and North Carolina were vying for a $36 million expansion that could have created as many as 70 new jobs. The competing sites were Garner's Greenfield Business Park, where Pergo already has a manufacturing and distribution facility, and Kennesaw, Ga., where Witex has a plant. In January, Pergo announced it had signed an agreement to buy Witex, but Pergo canceled the deal late last month, citing Witex's "liquidity crisis." Even without the acquisition, Pergo still could use additional manufacturing capacity in the United States, said Annette Kumlien, Pergo's chief financial officer, who is based in Sweden. Although removing the Witex plant in Georgia helps Garner, Kumlien said Pergo isn't ready to commit to any specific course of action. "We haven't decided how we are going to decide our capacity issue," she said. "We are looking into the situation right now." She declined to say what other options the company might consider beyond expanding its operation in Garner, where the company has a 153,000-square-foot manufacturing building and a 180,000-square-foot warehouse on a 100-acre site. "I have not been in contact with them and do not know what their plans are," said Mary Lou Todd, Garner's town manager. "I would love to see an expansion, but that is a corporate decision that they have to make." Pergo has about 200 employees in the Triangle, including its plant in Garner and its U.S. headquarters in Raleigh. Pergo now imports the raw material used for its flooring, called high-density fiberboard, from overseas and U.S. suppliers. Pergo invented laminate floors in the mid-1980s. When the Garner plant opened in 1996, the company essentially had the market to itself. Today, however, the company has more than 30 competitors in the U.S. market. The company, which still sells about a third of all the laminate flooring in the United States, overhauled its product lineup last year, said Santo Torcivia of Marketing Insights/Torcivia, a market research firm in Reading, PA. "There is some feeling that their styling was a little less than some of their competition," Torcivia said. "So they revamped the line, styling-wise, and brought in some lower-priced products."