Gildan Activewear Inc. has formed a 50%/50% owned joint venture company with Frontier Spinning Mills, Inc., and that the new joint venture company had acquired all of the assets of an existing yarn-spinning facility located in Cedartown, Georgia.
The equipment at the new facility reflects the latest generation of yarn- spinning technology. The total cost of the equipment and real estate for the Cedartown acquisition, including Frontier's 50% share of the investment, amounts to approximately U.S. $12.5 million, which represents a significant discount from book value.
The output of the Cedartown facility is expected to be consumed entirely by Gildan's integrated fabric manufacturing operations. Gildan will shortly be announcing detailed plans to build on the success of its recent major strategic investment in Rio Nance, Honduras by further expanding its offshore fabric manufacturing. Cedartown is a strategically located and low-cost source of yarn supply to support Rio Nance as well as Gildan's planned future expansion.
