Shaw's move directly reflects the consumer market move from carpet to hard surfaces. And both parties are driven in part by the fact that it's less expensive to operate and maintain.

Chuck Dobbins, Jr. (left), director of corporate assets for Shaw, works with John Wilkinson (right), director of corporate real estate, to lead a 25-person team. Behind them is the repurposed plant in South Pittsburg, Tenn.

The operative goal is to be the low- cost producer of affordable, quality products.
   The hard surfaces division got its start in a repurposed facility. Jeff Williams, director of manufacturing for the division, says the company started close to home, opening a laminate flooring operation in Ringgold, Ga., in a former distribution center. Then, in 2004, Shaw acquired a former formica manufacturing facility in Algona, Wash., where it now makes the same product. In June 2005, Also part of the division's portfolio is a laminate paper treating facility in Welcome, N.C., outside Winston- Salem, which Shaw purchased from Dynea in June 2005.
   That was the same month that the finishing touches were being put on the South Pittsburg deal, said Williams in an interview this summer at the plant, which was already employing 40 as it ramped up to full speed.
   "This time last year I was down here sweating and buying an additional 13 acres," he says, referring to adjacent farm property that the company wanted for potential expansion. "We got the funding approved and started on the upgrades immediately. The equipment started arriving in late 2005, and we started up our mill line officially about three months ago, our finishing line two months ago and our press line two weeks ago. Now it is a fully integrated engineered flooring manufacturing facility, from material to finished product."
   "Over the years we've gotten better – with real property assets as well as equipment – at looking for an internal use first," says Dobbins. "Disposition normally brings pennies on the dollar, and a new facility and equipment is so much more, when we can repurpose it, we significantly improve our ability to produce at a cost we're happy with."
   A key factor, says John Wilkinson, Shaw's director of real estate, is the plethora of plants Shaw maintains within 200-300 miles of corporate headquarters. "Proximity range is an advantage," he says, whereas a plant in the middle of Kansas or Utah would be less likely to be repurposed. It's only an hour to the Ringgold plant, where employees can get hands-on experience in similar work activities and then be transferred to permanent positions in South Pittsburg.
   Keeping assets around can also mean leasing them out to third parties. That has been the case with facilities in Trenton and Allendale, S.C., the former having been leased to a division of Rheem from 2002 until Rheem terminated the lease in 2005 and paid a fee. That was just in time for Shaw, as it turns out, as Shaw assumes ownership of Evergreen Nylon Recycling in Augusta, Ga., from DSM Chemicals North America and Honeywell. It's positioning both Palmetto State properties as raw material warehouses. (Shaw recently purchased Honeywell's fiber business.)
   Woods says this particular plant is in a very good geographic location for raw material access, for both hard wood veneers and pine, with much coming from Alabama and Tennessee. Looking across the Shaw regional portfolio, cost of fuel and raw materials can make a one- company cluster an enticing proposition.
   "Drive- time analysis is definitely a part of our decision-making process, and with diesel prices going from 90 cents to $2.30 a gallon, it's an even bigger factor now," says Wilkinson. "If you have and asset sitting idle, and decide to reuse it, if it's nowhere near other operations you might be better off to go build a new plant than try to repurpose an existing one. Owning and operating our own fleet, this may even be a bigger issue, because you're tying up your own fleet."
   At the same time, the reassurance of, for instance, other large yarn facilities in relatively close proximity eases pressure to have large amounts of raw materials on site, as long as they are in decent proximity and available, says Dobbins.
   "Between Six Sigma and lean manufacturing initiatives, we are continuing to move toward what we hope is the most efficient supply stream model of raw materials to finished goods," he says. "We seem to have an ever- growing number of warehouses, but it's largely because our volume is going up."
   It also helps logistics when you have the heft of being the world's largest carpet fiber producer.
   "We're as important to them as they are to us, so we are able to work with many of them on a just- in- time basis," says Dobbins of the key raw material suppliers. "In some situations, they own the inventory in the railcars until such time as we drop them into the bin and start extruding them into fiber. The cost of petroleum is changing the cost of raw materials and cost of end product, but I haven't seen it driving our facility need in any way – we've always tried to keep location costs and how it fits into our logistics model as one of the key components of our site selection process."
   "The strategy we have taken is if it's within reasonable proximity, we'd prefer to keep it, rather than dispose of the asset and end up needing space later," says Wilkinson of Shaw's real estate strategy. It's about "not disposing of assets that are within striking distance of re-use if you're a growing company."
   The only idle asset as of June was a three- story wooden- floored cotton mill from the late 1800s, said Wilkinson.