Plains Cotton Cooperative Association announced on Feb. 23 it has purchased the cutting, sewing and laundry equipment of Koramsa, a gigantic factory located in the heart of Guatemala City, Guatemala, to maintain blue-jean production there.

The deal was made so that Plains Cotton Cooperative Association in Lubbock has a steady market for its denim produced at its American Cotton Growers Denim Mill in Littlefield. Terms of the purchase were not revealed.

“Clearly Koramsa has unique capabilities in this hemisphere, which has been confirmed to us by a lot of our customers,” said Wally Darnielle, president and chief executive of the Plains Cotton Cooperative Association, which produces and markets Texas-grown cotton. “They have a laundry for washes, do finishing and their creative design capabilities is really unique.”

The marriage between the cotton producers, the denim mill and the apparel factory is the ultimate example of a vertical operation. Darnielle said this is the first time the cooperative has purchased an apparel factory, but felt it was an important business move for the future. “Gosh, if we don’t have a good cut-and-sew and design factory in this hemisphere, why are we making denim?” Darnielle asked.

The new company will be called Denimatrix. The Koramsa management team will remain, with Carlos Arias, formerly Koramsa’s president, becoming the president of Denimatrix.

Arias said that Denimatrix already had received substantial orders from two large brands. “We expect to deliver our first units in early May and expect Denimatrix to continue to rely on a well-established supply chain for jeans in the Americas,” he said in a statement.

At its peak, Koramsa was making 750,000 pairs of blue jeans a week and employed an army of 19,500 workers in 2003 on a sprawling tree-lined campus that rivaled the size of any small town. Workers occupied rows upon rows of sewing machines. Huge European washing machines were purchased a few years ago for various denim washes. A newer creative campus was established where designers from the United States could work on new looks with the Koramsa staff.

But over the last few years, Koramsa cut back its production to about 250,000 pairs of blue jeans a week, looking to make higher-quality pants that produced a higher profit margin.

That seemed to work until the recent downturn in the U.S. economy, which has had a ripple effect on factories all around the world.

Late last year, Koramsa dismissed thousands of its workers when the owners of Koramsa, the Klose family, decided to cut their losses and sell certain assets of the factory, which was established in 1988.

The American Cotton Growers Denim Mill, founded in 1975, produced denim almost exclusively for Levi’s for the past 20 years. But that has changed in recent years. Currently the mill is producing about 30 million yards of denim a year (out of a 37-million-yard capacity) for a variety of labels such as Calvin Klein and Levi’s and companies such as VF Corp., Eddie Bauer and Abercrombie & Fitch.