UNIFI IN ASIAN POLY VENTURE
NEW YORK — In a move to boost its textile presence in Asia, Unifi Inc. said Monday it is preparing to enter a joint venture with Korean polyester maker Hankook Synthetics Inc.
In a statement, the companies said they “will work towards a global alliance, with Unifi managing and subsequently acquiring a controlling interest in Hankook’s worldwide textured-polyester business.”
The announcement of that intended purchase comes less than a month after Unifi and DuPont revealed they had entered into an agreement that would give Unifi the option of buying the fiber giant’s polyester-filament operations.
Unifi’s role in the alliance will be overseeing the management of Hankook’s plants in the U.S., South Korea and China, and making them run more efficiently.
Brain Parke, Unifi’s president and chief executive officer, said in a statement that the venture “combines Hankook’s intimate and expansive knowledge of Asia with our production efficiency, quality and innovation.”
Unifi is not the only major fiber maker seeking to extend its reach into the Asian market through joint ventures.
Celanese AG recently said its acetate-filament unit would enter into a deal with Japan’s Teijin Ltd. to make and sell fiber. DuPont also has set up a number of overseas joint ventures.
Meanwhile, Unifi this week is expected to report that earnings results for the recently ended quarter have missed Wall Street’s expectations. Last week, the company said it expects results for its fourth quarter ended June 25 to be about 10 percent lower than the 23 cents a diluted share reported in the third quarter.
In the fourth fiscal quarter of 1999, the company posted earnings of 24 cents a diluted share, for net income of $14.4 million on sales of $307.7 million.
The First Call consensus for the just-ended quarter had been earnings of 25 cents a share. The company attributed the earnings slide to a number of factors, notably that polyester costs had risen about 8 percent through May and June, but that it had been able to pass along those increases during the quarter.