Unifi Sells Yadkinville Plant
December 8, 2008
YADKINVILLE, North Carolina – Unifi, Inc., a polyester yarn producer, will sell one of its texturizing plants in North Carolina for $7 million in the first fiscal half of 2009. Company officials reported to the Securities and Exchange Commission that some of its subsidiaries will expect to gain about $5 million from the sale. According to Roger Berrier, executive vice president of Unifi, the sale marks the latest in efforts to consolidate its manufacturing resources.
The negotiations took six months and were in the process of closing at the time of interview in October. Due to ongoing contractual agreements, Berrier was not at liberty to disclose the buyer's name.
He did, however, indicate that the sale of this plant will not greatly affect Unifi's production capacity because its employees and texturizing machines will be moved to another plant in the Yadkinville site. While neither of its two texturizing plants previously functioned at 100 percent capacity, the consolidation of the plants will guarantee efficient use of Unifi's resources. "The objective of this was consolidating the production and equipment in one facility," said Berrier. "So it was about streamlining our assets and running more efficiently."
The driving factor in this decision, he noted, was the decline in demand for U.S.-made polyester in the last five years due to offshore production. "This led Unifi to take steps to consolidate operations," he said. "Over the last two years, we've consolidated different plants, including some operations in Rockingham County and Kinston. This was one of the last steps." Unifi closed its Kinston plant in 2007 and its Rockingham County plant in 2005. The Kinston plant produced partially orientated yarn (POY) for internal consumption, and Plant One in Rockingham produced nylon.
Although a decline in polyester led to the Yadkinville sale, a shortage of U.S. producers has brought more customers to Unifi in recent months. "While it's unfortunate that these yarn and fiber companies have gone out of business, we want to be there to support the clients with what they need so that they can stay in business," he said. "Unifi is very dedicated to our domestic consumer base. We want to be one of the main suppliers in this region."
"Certainly one of our key initiatives here is to develop new products," he continued. "One of our newest products is Repreve®. Repreve is our umbrella brand of sustainable product, offering 100 percent recycled products. We place a lot of emphasis on innovation."
The negotiations took six months and were in the process of closing at the time of interview in October. Due to ongoing contractual agreements, Berrier was not at liberty to disclose the buyer's name.
He did, however, indicate that the sale of this plant will not greatly affect Unifi's production capacity because its employees and texturizing machines will be moved to another plant in the Yadkinville site. While neither of its two texturizing plants previously functioned at 100 percent capacity, the consolidation of the plants will guarantee efficient use of Unifi's resources. "The objective of this was consolidating the production and equipment in one facility," said Berrier. "So it was about streamlining our assets and running more efficiently."
The driving factor in this decision, he noted, was the decline in demand for U.S.-made polyester in the last five years due to offshore production. "This led Unifi to take steps to consolidate operations," he said. "Over the last two years, we've consolidated different plants, including some operations in Rockingham County and Kinston. This was one of the last steps." Unifi closed its Kinston plant in 2007 and its Rockingham County plant in 2005. The Kinston plant produced partially orientated yarn (POY) for internal consumption, and Plant One in Rockingham produced nylon.
Although a decline in polyester led to the Yadkinville sale, a shortage of U.S. producers has brought more customers to Unifi in recent months. "While it's unfortunate that these yarn and fiber companies have gone out of business, we want to be there to support the clients with what they need so that they can stay in business," he said. "Unifi is very dedicated to our domestic consumer base. We want to be one of the main suppliers in this region."
"Certainly one of our key initiatives here is to develop new products," he continued. "One of our newest products is Repreve®. Repreve is our umbrella brand of sustainable product, offering 100 percent recycled products. We place a lot of emphasis on innovation."
