UNIFI®, Makers of REPREVE®, Announces U.S. Manufacturing Transition and Facility Consolidation
Unifi, Inc. (NYSE: UFI), a leading innovator in recycled and synthetic yarns, has announced a significant transition in its U.S. manufacturing operations. The company will be relocating yarn production from its facility in Madison, North Carolina, and plans to place the property for sale in the 2025 calendar year. This strategic move aims to enhance efficiency, streamline operations, and optimize resource utilization across UNIFI’s North and Central American facilities.
Strategic Objectives and Benefits of the Transition
UNIFI has long been a pioneer in sustainable textile innovation, particularly through its flagship REPREVE® brand, which focuses on recycling plastic waste into high-performance fibers. The decision to transition operations away from the Madison REPREVE facility is part of a broader initiative to align the company’s production footprint with evolving customer needs and market demands.
Several key benefits are expected from this move:
- Enhanced Efficiency and Operational Strength
By consolidating production activities into other UNIFI facilities in North and Central America, the company aims to optimize efficiency while maintaining uninterrupted service to its customers. The transition will not affect sales volume or production capacity, ensuring a seamless supply chain for clients who rely on UNIFI’s high-quality yarns. - Improved Facility Utilization and Cost Absorption
Shifting production to existing locations will lead to higher utilization rates at these facilities, allowing for better fixed-cost absorption. This will support long-term financial sustainability and help drive profitability. - Strategic Equipment Relocation for Market Growth
To meet growing market demands, UNIFI will strategically relocate certain equipment from the Madison plant to other facilities. This will ensure that the company continues to innovate and expand its capabilities while maintaining high-quality manufacturing standards. - Debt Reduction and Financial Strengthening
The proceeds from the future sale of the Madison property will be used to pay down existing debt, reinforcing UNIFI’s financial position and supporting its long-term growth strategy.
Commitment to Employees and Community Support
As part of this transition, UNIFI is deeply committed to supporting its employees and the surrounding community. CEO Eddie Ingle emphasized the company’s appreciation for the dedication and contributions of the Madison facility workforce, both past and present.
“We are very grateful for the hard work, contributions, and support from everyone involved with the Madison facility, including the community and employees. Our top priority is ensuring a smooth transition for all those affected,” said Ingle. “We are offering existing employees opportunities at our other facilities in North Carolina, and we will work closely with local organizations to facilitate this change.”
UNIFI plans to provide job placement assistance, relocation support, and other resources to affected employees to help them transition into new roles within the company or elsewhere.
Aligning with Long-Term Business Strategy
UNIFI’s manufacturing REPREVE realignment is part of a larger strategy to better position the company for future growth. This transition allows the company to focus on:
- Expanding the REPREVE® Portfolio: As sustainability remains at the forefront of the textile industry, UNIFI continues to innovate with REPREVE®, its flagship line of recycled fiber solutions. The company is committed to driving sustainable practices and increasing the use of recycled materials in textiles.
- Investing in Innovation and R&D: UNIFI will leverage the cost savings from the facility consolidation to further invest in research and development, ensuring it remains a leader in textile technology and sustainability.
- Strengthening Financial Health: By reducing operational costs and allocating capital more efficiently, UNIFI aims to enhance its financial standing, enabling it to make strategic investments and navigate market fluctuations more effectively.
Market Demand and Competitive Positioning
The global textile industry is increasingly shifting toward sustainability and circular economy models, with major brands seeking eco-friendly materials. UNIFI’s transition ensures that the company remains agile and competitive in meeting these demands. By consolidating manufacturing and optimizing operations, UNIFI strengthens its ability to serve a growing customer base in North and Central America.
Furthermore, the company’s strategic adjustments will not compromise its market position. UNIFI reassures its customers that supply chain REPREVE stability and product quality will remain top priorities throughout the transition process.
Upcoming Financial Update and Future Outlook
Additional details on this strategic transition will be shared during UNIFI’s second-quarter fiscal 2025 earnings conference call. The call is scheduled for February 6, 2025, at 8:00 a.m. Eastern Time, where company executives will provide further insights into the expected impact of the transition and long-term business objectives.
As UNIFI moves forward with these operational adjustments, the company remains committed to delivering value to its customers, employees, and shareholders. By realigning its manufacturing footprint, UNIFI is positioning itself for sustainable growth, REPREVE financial resilience, and continued leadership in the recycled fiber industry.
