NEW YORK — Dominion Textile is restructuring its Canadian-based specialty yarns division and infusing $7.6 million ($10 million Canadian) to upgrade and modernize that sement of its business. Two plant closings, with a cutback of 380 positions, are included.
Dominion, based in Montreal, said the division will withdraw from declining or unprofitable product lines — mainly dyed yarns — and focus more on specialty yarns in growth markets, such as natural cotton yarns. In addition, the division offers polyester and cotton blended yarns and man-made fibers for apparel, household and industrial markets.
The restructuring will result in the closure of the company’s Domil spinning plant in Sherbrooke, Quebec, which employs 275 people, and of its yarn-dyeing operation at Mount Royal Dyehouse, Montreal, employing 105.
The plants will continue to provide service to customers until their final closure, which is slated for September. Mount Royal has been operating at less than 50 percent capacity, according to a company spokeswoman.
The specialty yarns division will continue to operate E.F. King, Montmagny and Saint George-de-Beauce — all in Quebec.
The first phase of the planned capital investment is the expenditure of $3.8 million ($5 million Canadian) this year for the modernizing of yarn production capacity at the company’s E.F. King plant. “The resulting specialty yarns unit will be focused on fewer business segments and customers and will be fully competitive in both cost and quality for the North American market,” said Charles Hantho, Dominion’s president and chief executive officer, in a statement.
In addition to a working notice of termination, employees will receive a severance package based on years of service. Dominion also said that, in conjunction with union representatives and appropriate government agencies, relocation and adjustment programs will be examined.
The specialty yarns division is one of three units in the Dominion Yarn Group. The others are Dominion Yarn Corp., which operates four plants in the U.S., and Dominion Yarn Co., with two plants in Canada. Dominion is also the parent company of Swift Textiles, a leading U.S. denim producer, and Klopman International, a European producer of polyester and cotton fabrics.
Dominion’s sales for the year ended June 30 were $1.01 billion ($1.34 billion Canadian). Total yarn sales comprise 22 percent of Dominion’s business, with specialty yarns contributing about $60.8 million ($80 million Canadian).