T-shirt maker Gildan Activewear Inc is to close its two Canadian yarn-spinning plants and axe 285 jobs as it focuses on expanding its textile operations in Central America and the Caribbean.

The Montreal-based company also reported record profits in the latest quarter, and said the closures should result in an annual cost saving of $4.0 million. It predicts one-time closure expenses of around $7.8m after tax.

Gildan said the rising Canadian dollar, higher electricity costs, and a trade pact between the US and Caribbean countries that requires all garments imported to the United States to contain US-made yarn, made the plants uncompetitive.

In a statement Gildan added that most of the machinery from its operations in Long Sault, Ontario, and Montreal, Quebec, will be moved to the company's new yarn-spinnning plant in Clarkton, North Carolina.
 
The Canadian plants are due to be shut down by the end of March, while the company hopes to have the Clarkton facility up and running by the end of the 2005 financial year.

The company said that it would put in place measures to "alleviate the transition" for the plants' 285 workers, but didn't give any further details.

In a separate announcement Gildan today delivered 2005 first-quarter results ahead of expectations, with continued increases in unit sales volumes as well as higher retail prices and a better product mix.

First-quarter net earnings totalled $8.4m compared with $2.9m in 2004, while first-quarter sales increased 39.8 per cent from $109.0m last year.