Yarn maker Unifi Inc is shutting two production lines and downsizing its recently acquired Kinston, North Carolina facility with the loss of nearly 500 jobs.

Unifi, which currently operates four production lines at the facility, says it plans to shut one line in December 2004 and another by 31 March 2005.
The Greensboro, NC-based company acquired the Kinston, California plant in September in a deal estimated to be worth around $22.5 million. It added polymer spinning to Unifi's textured yarns business.

"At the time we announced this acquisition, we stated that our first priority would be to streamline the product mix and production lines between Kinston and our existing domestic polyester operations to optimize capacity to fit the market," explained Bill Lowe, chief operating officer and chief financial officer for Unifi.

"This is one of the first major steps that we are taking quickly to get this operation on track and contributing positively to our operating results. This is a coordinated effort with our other polyester operations to exit non-profitable business and establish a solid base upon which to build value in the future for our shareholders, bondholders, and employees."

Unifi has recorded continuously lower net sales recently, due to slow sales of yarn and decreases in average unit prices.

The Kinston facility currently employs 740 full-service and contract workers. Unifi estimates that after production ceases on these two production lines that it will employ approximately 250 full-service employees at the site.