Mohawk Announces JV with Leading Chinese Tile Producer - SanfiBy Mohawk Industries Inc., PRNE
Monday, July 5, 2010
CALHOUN, Georgia, July 6, 2010 - Mohawk Industries, Inc. (NYSE: MHK) announces today the expansion of its
international presence with an investment of a minority interest in Sanfi
Ceramics. Sanfi is a leading manufacturer of ceramic tile in China and this
joint venture provides the foundation for Mohawk's participation in the
largest ceramic tile market in the world. Mohawk has opportunities to
increase its equity investment in Sanfi in the future.
Ceramic tile is estimated to make up 70% or more of all flooring sold in
China and is 25 times larger in units than the U.S. ceramic tile market with
anticipated growth of 10% or more per year. Presently, the top 10
manufacturers in China only comprise about 10% of the market creating
significant opportunity for expansion. This year, Sanfi has increased sales
revenues about 50% from the prior year by continuing its focus on the local
Sanfi began manufacturing ceramic tile in 2003 and, with its strong
management team, has quickly grown to one of the top 10 participants in the
Chinese industry. It presently specializes in mid to high end polished floor
and glazed wall tile segments using product innovation and multiple brands to
maximize its market position. The company has a reputation for superior
quality and value supported by two large, efficient manufacturing facilities.
Sanfi's original manufacturing site is in Foshan supplying the national
market and a new facility is starting up this year in Inner Mongolia focusing
on Northern China. This fall, new equipment will be installed allowing
Sanfi's participation in glazed floor tile which is the fastest growing
segment of the Chinese tile industry.
"This new business venture clearly reinforces our continued commitment to
being a global manufacturer in the flooring industry. We are excited to
partner with a world class company such as Sanfi," said Jeffrey Lorberbaum,
Mohawk Industries Chairman and CEO.
"Our joining forces with Mohawk gives us access to the latest technology
and a partner with a history of excellence in selling and distribution. We
are eager to leverage our combined strength and expand our market presence,"
said Mr. Chen Xiongzai, Chairman and CEO Sanfi.
Together, Sanfi and Mohawk have extensive opportunities to increase
market share in China by broadening product offerings, providing leading
style and innovation, improving efficiencies, marketing and distribution
capabilities. In 2010, Mohawk expects its investment to be slightly accretive
excluding one-time accounting charges.
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, Ralph Lauren, Lees, Bigelow, Dal-Tile, American Olean, Unilin and
Quick Step. Mohawk's unique merchandising and marketing systems assist its
customers in creating the consumer's dream. Mohawk provides a premium level
of service with its own trucking fleet and over 250 local distribution
Certain of the statements in the immediately preceding paragraphs,
particularly those anticipating future performance, business prospects,
growth and operating strategies and similar matters and those that include
the words "could," "should," "believes," "anticipates," "expects," and
"estimates," or similar expressions constitute "forward-looking statements."
For those statements, Mohawk claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform act of 1995. There can be no assurance that the forward-looking
statements will be accurate because they are based on many assumptions, which
involve risks and uncertainties. The following important factors could cause
future results to differ: changes in economic or industry conditions,
including those in China; changes in foreign exchange rates; competition; raw
materials and energy costs; timing and level of capital expenditures and
implementation of operational improvements; integration of acquisitions;
rationalization of operations; claims; litigation and other risks identified
in Mohawk's SEC reports and public announcements.
Frank H. Boykin, Chief Financial Officer, +1-706-624-2695
Tags: Calhoun, georgia, July 6, Mohawk Industries Inc., Scandinavia, Western Europe