Textile company Comerama is to close its Kilkenny and Donegal factories for the month of December due to a slump in demand on global markets for its wool.

The company's 370 workers at two plants in Castlecomer, Co Kilkenny, and Bunbeg, Co Donegal, have been working a three-day week since June due to difficulties at the company.

Management met workers and unions yesterday and informed them that the two factories will close for December with a view to reopening in January.

The group, which is owned by Thai company Indorama, is working on a restructuring plan. Management will meet unions in December to outline that plan.

It is believed the group is considering shifting its emphasis from wool to other more popular synthetic materials. It is understood jobs may be lost under the restructuring.

A statement from the group last night said a decision had been taken to close the factories because of "very low demand for wool products in major retail outlets". Inventories of finished goods are at unsustainable levels and are equal to about three months normal production, it said.

"In light of the present market conditions, the group is carrying out a review of its worldwide operations and management anticipate that this review will provide a degree of clarity and stability for re-structured business," the statement said.

As well as wool textiles, Indorama produces polyester, plastic packaging and "speciality chemicals". It has operations in Asia, Europe and the US.

Indorama acquired Comer International, as it was then, in 1999 for around €40 million. The Irish operations have a turnover of around €60 million and exports the bulk of that to Germany and France.

Donegal-based SIPTU official Mr Kevin McKinney said that while workers are anxious about possible job losses, there is a sense of relief that a review is under way and the restructuring plan will be made known in December.

"The latest developments were not entirely unexpected," he said.