Branded and private label clothing maker Delta Apparel Inc has closed the sale of its yarn manufacturing plant in Edgefield, South Carolina, to cotton producer Parkdale America LLC.

In connection with the $10 million sale, Delta has also signed a five-year contract with Parkdale in which the latter will exclusively supply Delta's yarn requirements.

The price of the yarn will be based upon the cost of cotton alongside a fixed conversion charge.

Robert Humphreys, president and chief executive officer of Delta Apparel said that the transaction completed the company's "long-term yarn strategy of obtaining high quality, low cost yarn" and lowering its working capital investment.

Humphreys added: "Our business partnership with Parkdale through the supply agreement will allow us to acquire quality yarn that has been manufactured from the most modern equipment available."

Delta Apparel Inc, along with its wholly owned subsidiary M J Soffe Co, makes active wear apparel throughout the US, Honduras, Mexico and Costa Rica.

Parkdale America LLC, a joint venture between Unifi and Parkdale Mills, produces cotton and cotton yarn using open-ended and air jet spinning technology.