RadiciSpandex Corp., the U.S. arm of Gandino, Italy-based Radici Group, is on the road to closing down its operations.
The company, which manufactures spandex yarn at its facility in Tuscaloosa, Ala., and provides finishing and distribution at its headquarters and distribution center in Gastonia, N.C., has given 60 days factory warning notice to its employees in Alabama and has advised employees in Gastonia of the likelihood of reductions in personnel over the next several months.
The exact length of the reduction in operations is unknown at this time, so the company is notifying employees and providing the notice, the firm said, adding that the actual timing of the operation reduction at both facilities will depend on business conditions and other business planning now under way.
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“The spandex market has been difficult the past several months with an oversupply of spandex in the global market driving prices down at the same time raw material prices have increased over 25 percent,” said chief executive officer Marty Moran. “These conditions look to continue for the foreseeable future and RadiciSpandex has made the decision to reduce operations to control the losses the company is suffering.
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The company intends to work with its employees, customers and suppliers for an orderly reduction of operations, while the company pursues alternative modes of business operations. The company is following market conditions to determine if U.S. production can be restarted.”
Moran said there will be around 95 people affected by the announcement.
RadiciSpandex manufactures a broad range of spandex fibers from 10 to 1680 deniers for use in the apparel, home furnishings and industrial markets. It’s U.S. production capacity is about 6,000 tons per year.
The parent Radici Group has about 4,900 employees at 48 production units in 15 countries with sales of about $1.5 billion. It’s diversified businesses include chemicals, plastics, synthetic fibers and textiles. In 2010, its synthetic fibers and textiles units had sales of 570 million euros, or $787 million at current exchange.
Competition in the spandex or elastane industry is global and broad. Among the top manufacturers, in addition to Radici, are Invista, which makes the Lycra and Elaspan brands, and Hyosung’s Creora brand.