Unifi Textured Yarns Europe, Letterkenny, is owned by Unifi Incorporated in the United States, one of the largest processors of synthetic yarns worldwide with annual sales of €1.6 billion and 5,400 employees. In 1999, a number of events led to a flood of lower cost Far Eastern fibre, yarn and fabric into the US and European markets. This was primarily due to the expansion of capacity in the Far East and the Asian crisis of 1998 which caused demand there to drop and led to Far Eastern producers seeking markets in the US and Europe at any price. Unifi and other textile players responded to this increased supply by forming alliances, cuts in plants, employment and capacity to restructure the industry.
In the year ended June 2000, Unifi Textured Yarns Europe experienced a loss of €2.9 million and a further loss of €10.8 million in June 2001. The company responded by addressing inefficiencies and cost reductions, eliminating loss leaders in certain markets and developing a new strategy to secure the future of the operation. This strategy focused on moving the company out of the commodity segment of the apparel market and into higher margin areas – industrial and automotive.