IN THE HUNT: Remember when being Shanghaied was not a good thing? It was like being kidnapped or hijacked. Well, it seems that now it is the promised land for some businesses. Shanghai continues to attract foreign investment, and in 2007 there were 191 new non-Chinese enterprises, bringing in US$2.1 billion. Most of the investors, 147, chose to incorporate as a WOFE, while the remaining 44 adopted joint venture structures. WOFE is the acronym for Wholly Owned Foreign Enterprise, which means it is 100% owned by a foreign company which retains complete control and direction of the Chinese operation. The bulk of Shanghai’s foreign investment comes from Asia, particularly Hong Kong, followed by Singapore, U.S.A., Korea and Taiwan.

CHANGE BREWING: The dynamic might be changing in the United States. American companies have been manufacturing overseas at an increasing rate but don’t be surprised if our flooring companies start bringing production back home. It seems the weak dollar and higher overall costs are actually making it more expensive to produce products outside the country for consumption at home. The cost of fuel to ship products is staggering, especially if they’re coming from Shanghai or other Asian locations. Once landed in California, trucking material to major cities across the country is a profit-draining expense. Estimates indicate that last year the price of diesel fuel rose about 40%. Simply, what used to cost $2 to produce outside the U.S., and bring in, is now costing $3.30, eroding profit margins already squeezed tight.

VANGUARD: It seems odd that while some American companies were outsourcing a portion of their production, the reverse was happening with European flooring makers. As the Euro and the British Pound soared past the U.S. dollar, a number of major Italian and Spanish tile companies realized it was a sound business practice to manufacture a large percentage of their products in the U.S. that will be sold to American consumers. What’s made here, stays here. They have bought and upgraded existing facilities or built from the ground up. There must be something to this strategy. Several European-based laminate companies have done the very same thing— Pergo, Quick•Step, Kronotex/ Formica and Alloc, to name a few. The theory here has to be: The closer to the marketplace that you manufacture your goods, the less the freight and handling, and higher the profit.

DELAYED: Solutia has announced it will not emerge from bankruptcy this week as planned because “problems in the credit markets have left banks working with the chemical producer unable to come up with the necessary financing.” Solutia said the lead arrangers of its $2 billion exit financing package informed the company of the problem last Tuesday (Jan. 22). Solutia contends the banks committed to the financing plan in late October and are obligated to provide the funds. The banks claim that certain conditions changed since the deal was made that allows a legal exit. Anyway, both sides are now working together in order to work out a way for Solutia to come out of the Chapter 11 protection.

WINNER: The World Floor Covering Association and Creating Your Space have been recognized by the International Academy of Visual Arts for outstanding achievement in Web site design. WWW. WFCA.ORG received the highly acclaimed W3 Silver Award, which honors creative excellence on the Web. Web sites are judged on creativity, usability, navigation, functionality, visual design and ease of use. WFCA.ORG was designed and is managed by WFCA partner Bridgeway Interactive, a Sausalito, Calif., firm headed by Michael Vogel. With Bridgeway Interactive, the WFCA formed Creating Your Space, a company that designs retail sites for WFCA member retailers.