The UK manufacturing division of carpet yarn producer Aquafil Group is to close following continued losses.
Italian based Aquafil has confirmed that it will close its carpet factory on Mill Road in Kilbirnie, Ayrshire, Scotland, which will impact around 40 jobs.
Aquafil said that the Covid pandemic and Brexit had impacted trading conditions with the business finding it “increasingly difficult to fulfil planned capacity through existing clients”.
Acquired in 2014 from Knox Fiber, the division of Scottish-based company W & J Knox Ltd is dedicated to the processing of carpet yarn. The Kilbirnie plant represents a logistical base to supply customers in the UK and other Northern European countries. This facility carries out interlacing and twisting for the carpet yarn sector.
In a statement, Aquafil said: “We need to consider changes to the structure of Aquafil UK in order to protect the overall business. We have had to consider how we can reduce our overhead costs and consider the viability of a site that has continued to make losses for five years and further losses are unsustainable.
“Although making redundancies is a last resort for the business, itis necessary to put forward this proposal to ensure we are doing everything we can to help the Company survive the current trading difficulties. We are keen to consult with all parties to explore alternative options to loss of jobs.
“We have considered the situation very carefully. We are doing all we can to secure more work, but have not secured any further contracts at present, due in part to the strong competition that exists outside the UK.”
The group recently posted a decline in half year sales by 11.4% €311.1m from €351m, with EBITDA down 39.2% €31.3m compared to €51.5m. Net losses resulted at €4.1m, down 123.4% from its profit of €17.7m for the period ended 30 June 2023.