Greensboro, N.C.-based Unifi Inc. has discontinued discussions with China-based Guangdong Kaiping
Polyester Enterprises Group (Kaiping) and Guangdong Kaiping Chunhui Co. Ltd. (Chunhui) to set up a
joint venture to manufacture and sell certain polyester and nylon products. Unifi made the decision
to halt the effort after determining that Kaiping will not be able in the near term to finalize a
definitive agreement, which would result in a delay in receiving the necessary regulatory approvals
and push the closing further into the future.
Unifi announced that, in place of the joint venture, it plans to pursue a greenfield strategy
in China, by which it will establish a wholly owned subsidiary to manufacture and process textured
polyester and nylon yarns in that country. The company is investigating possible sites for the
operation, which will be furnished with equipment taken out of service in the United States,
England and Ireland. It expects to announce a location for the new venture shortly.
“[W]e believe that the decision to pursue a start-up activity with a wholly owned subsidiary
is the best strategy for getting on the ground in China during the calendar year 2004,” said Brian
Parke, president and CEO. “This strategy allows us to produce product sooner while using less of
our cash reserves. We plan to apply the same business model that grew Unifi into one of the world’s
leading producers and processors of textured yarns to our subsidiary in China.