07072010 Mohawk Joint Venture with Chinese Ceramic Tile Maker

MOHAWK IN JOINT VENTURE WITH
CHINESE CERAMIC TILE MAKER

CALHOUN, GA – Mohawk Industries, Inc. has entered into a joint venture with Sanfi Ceramics, a manufacturer of ceramic tile in China. The move expands Mohawk's commitment to global markets, according to Jeff Lorberbaum, chairman and chief executive officer of Mohawk.

"Together, Mohawk and Sanfi have extensive opportunities to increase market share in China by broadening product offerings, providing leading style and innovation, improving efficiencies, marketing and distribution capabilities," according to Mohawk.

 Initially, Mohawk will have a minority interest in Sanfi. The joint venture will provide Mohawk the opportunity to increase its equity investment in Sanfi in the future, according to Mohawk.

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 market.

Sanfi began manufacturing ceramic tile in 2003.  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.

"This new business venture clearly reinforces Mohawk's continued commitment to being a global manufacturer in the flooring industry. The company is pleased to partner with Sanfi," said Lorberbaum.

In 2010, Mohawk expects its investment to be slightly accretive excluding one-time accounting charges.