3. ➔Official name: Shaw Industries, Inc.
➔Publicly owned by Berkshire Hathaway
➔Headquarters located in Dalton, Georgia
4. General Activities in the T&A Industry
➔fiber production
◆ largest producer of polypropylene fiber in the world
➔yarn production
➔carpet manufacturing
➔carpet finishing
◆ continuous dyeing plant
➔transportation & logistics
◆ own trucking subsidiary (since 1982)
5. Types of Products
➔ carpet fibers:
◆ nylon
◆ polypropylene (olefin)
◆ polyester (PET)
➔ carpet, area rugs, and carpet padding (hard
flooring & turf division)
◆ Brand names like Caress & Life Happens
◆ over 350 style & color combinations
Shaw Trade Names & patents:
➔ Anso Nylon
6.
7. Market & Carpet Industry
Market and Industry
➔ Carpet and Rug Mills Industry ~ 360 companies
➔ Half of companies based in Georgia
◆ Early 1900s; easy access to cotton farms
➔ Market for carpet correlates with economy
◆ housing market
◆ synthetic fiber prices affected by the oil
industry (production of nylon)
Shaw’s Position in Market
➔ Shaw is the world’s largest carpet manufacturer
➔ Industry’s low cost provider
Competitors
➔ Mohawk Industries
➔ Interface
➔ Beaulieu of America
➔ Milliken and Company
8. Our Thesis for Shaw Industries
“Shaw Industries, the world’s largest carpet manufacturer, has reached its high
level of success due to their ability to integrate the latest advances in technology
with an innovative business strategy within the textile pipeline; their ability to
efficiently use resources demonstrates their commitment to social responsibility
in making business decisions that are environmentally and economically sound in
order to provide their customers with an experience that guarantees high quality
in product design and aesthetics while still remaining affordable.”
9. Evidence
Degree of Success
➔ only company in the industry debt free
➔ substantial growth over last 30 years
◆ over $4 billion in annual sales & over 25,000 employees; Up
from $500 million in sales and 5,000 employees (in 1985)
“...latest advances in technology…”
➔ First started to modernized plants and equipment in the early 1980s,
allowing it to respond quickly to such breakthroughs as stain resistant
carpet.
➔ carpet manufacturing techniques have changed very little in past 20 yrs
◆ tuft spun yarn becoming obsolete (labor intensive)
➔ dyeing techniques are evolving more
◆ moving towards pre-dyed carpets
“... innovative business strategy…”
➔ Vertical Integration Strategy
➔ Created its own trucking subsidiary, dramatically improving shipment
10. (more) Evidence
“... efficient use of resources…”
➔ Decreasing the consumption of fuel, water, and
electricity in the manufacturing process and finding
innovative recycling solutions
➔ 2030 Environmental Performance Goals
“...environmentally and economically sound…”
➔ Anso Nylon recycling
◆ Evergreen facility in
Augusta, Georgia
➔ Cradle to Cradle certifications
➔ Re2E (Reclaim to Energy)
◆ in Dalton, Georgia
Editor's Notes
*involved in each activity of the production pipeline, as they are a vertically integrated company
http://www.accuval.net/insights/industryinsights/detail.php?ID=150
*based in Georgia because of the history of the industry; Labor was cheap and there was easy access to cotton farms.
*demand is expected to increase as the US economy recovers
*vertical integration is a huge advantage for Shaw, as it lowers costs & increases profit margins
-chart is from floor covering market share in 2009, (in the most recent year, the carpet and rug industry made $10.1 billion)
-1985 (the first year they showed up on the Fortune 500 list)
-2014 Forbes ranked them #8 best company to work for
-shaw (and competitor mohawk) have moved to close several plants manufacturing tuft spun yarn. move towards bulk continuous filament process-- automated process that is more cost effective in manufacturing.
-previously carpets have been dyed after the manufacturing processes
-first flooring company to fully vertically integrate
-trucking fleet is the largest in the flooring industry (14th largest in the US overall)
-2030 Goals: 100% Cradle to Cradle, reduce water intensity 50%, reduce energy intensity 40%, reduce total waste to landfills 100%!!
-Cradle to Cradle ensures that the carpets are made from the safest, most natural materials on the market. “designed with the end in mind”, all or mostly recyclable. **more than 60% of their products**
-have recycled more than 600 million pounds. 85% of collected carpets are recycled - Evergreen Nylon 6 recycling facility in Augusta, Ga
-Re2E waste to energy facility for materials that cannot be recycled -- provides power to adjacent carpet manufacturing operations
