Gildan Completes CanAm Acquisition, Expands Yarn-Spinning Operations
Montreal-based branded basic apparel manufacturer Gildan Activewear Inc. has finalized the
acquisition of CanAm Yarns LLC (CanAm) — its 50-percent-owned yarn-spinning joint venture (JV) with
Frontier Spinning Mills Inc., Sanford, N.C. — and is investing approximately $85 million to expand
CanAm's yarn-spinning operations.
CanAm, which was established in 2003 and sold its yarn exclusively to Gildan for use in knitted apparel, now will operate as Gildan's wholly owned subsidiary. Gildan plans to expand and modernize CanAm's existing open-end yarn-spinning facilities, which are located in Clarkton, N.C., and Cedartown, Ga., and employ approximately 230 people.
Gildan, through CanAm, also will open a ring-spinning plant in Salisbury, N.C., and will hire approximately 170 employees over the next two years. That project is funded in part by a North Carolina Job Development Investment Grant. Gildan expects production to commence in fiscal 2014.
In addition to its U.S. yarn-spinning facilities, Gildan operates 15 sewing, textile manufacturing and sock manufacturing facilities in Honduras, Nicaragua, and the Dominican Republic. The new U.S. plant in Salisbury will allow Gildan to take advantage of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which allows duty-free importation of finished goods made from yarn spun in the United States or Central America.
According to a statement from Gildan, "the strategic rationale for the company's investment in vertically-integrated yarn-spinning is to support its projected sales growth and to continue to pursue its business model of investing in global low-cost manufacturing technology and in product technology which will provide consistent superior product quality. The company is investing in ring-spun yarn technology which will provide enhanced quality features as well as qualify for duty-free access to U.S. markets under CAFTA-DR, which requires the use of U.S. yarn or yarn spun in other CAFTA-DR member countries. Ring-spun products will be utilized as part of the company's branded product offering in Branded Apparel."
Gildan reports it has secured new branded programs for fiscal 2013 and is increasing its investments in brand advertising - including launching the first national marketing campaign to support its retail brand. The company recently sponsored the New Mexico Bowl college football game, during which it awarded $10,000 for college tuition to the winner of its "Touchdowns for Tuition" sweepstakes; and will be running a television ad during the Super Bowl.
"In developing Gildan as a national brand, it's important that we make as big an impact as possible with our target audience," said Rob Packard, vice president of marketing and merchandising, Gildan's retail unit. "Quality products plus smart, targeted marketing are helping to define this brand as we greatly expand our presence at retail. It's a very exciting time at Gildan, and our marketing efforts bear this out."
January 8, 2013