Gildan Activewear Inc. announced that it had completed the acquisition of Shahriyar Fabric Industries Limited for a total purchase price of approximately U.S. $15 million, including the assumption of all of Shahriyar's indebtedness.
Shahriyar owns and operates a vertically-integrated knitting, dying, finishing, cutting and sewing facility for the manufacture of high-quality ring-spun T-shirts near Dhaka, Bangladesh, with annual T-shirt production capacity of 2.2 million dozens.
As a first phase of further expansion, Gildan plans to increase the facility's annual production capacity to 3.5 million dozens, to support the Company's strategy to grow its international business in Asia and Europe. Gildan's previously announced textile expansion plans in its Central American and the Caribbean Basin manufacturing hubs remain unchanged, including the construction of a third state-of-the-art textile manufacturing facility in Honduras (Rio Nance V) to support the Company's projected future sales growth in the North American screenprint and mass retail markets. Gildan expects that its acquisition of Shahriyar will generate a return on investment in excess of Gildan's risk-adjusted cost of capital.
The acquisition of Shahriyar is the end-result of substantial analysis carried out by Gildan to identify a strategic location to begin the development over time of a potential major vertically-integrated manufacturing hub in Asia, with an infrastructure and geographical location to position Gildan as a low-cost, high-quality producer to serve its target markets. Gildan intends to utilize its operating expertise and established manufacturing processes to further enhance the operating efficiency of the Shahriyar facility. In addition, Gildan is committed to ensure that its vertically-integrated manufacturing operations in Bangladesh are operated in full compliance with the Code of Conduct for social responsibility and leading practices for sustainability which have been implemented throughout its existing operations.
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