Yarn giant Unifi Inc is to close its unprofitable Textured Yarns Europe division, based in Letterkenny in Ireland, at the end of October with the loss of around 300 jobs.

From November onwards the North Carolina-based company will re-focus its European operations solely on the sales, distribution and service of textured yarn. 

The company expects the cost of the shut-down to be in the range of $20-24 million.

"This facility has been unprofitable for a few years now, and although we took major steps in March this year to restructure our operations to fit anticipated market needs, it appears that the on-going volume will be lower than we estimated resulting in a loss again this next fiscal year," said Fintan McGrath, president of Unifi Europe.

"Therefore, we do not see that we have an opportunity to continue manufacturing here in Ireland."

The company is currently evaluating the options available to it with regard to the sale of land and buildings at its Letterkenny site, together with the redeployment or sale of all spinning and texturing equipment.

Brian Parke, chairman and CEO of Unifi, said the decision had been "very difficult…but one that is necessary."

Yarn produced in the United States and through Unifi Asia will be used to supply customers in the United Kingdom and continental Europe.

In March, Unifi Inc announced plans to cut about 400 jobs and shut down production facilities in the US and UK in an aggressive cost-cutting exercise. A month later it reported a net loss of $50 million for the third quarter.

It has repeatedly cited challenges including excess capacity in the US market, rising raw material prices, and continued pressure from imports for its cost-cutting measures.

Earlier this week Unifi announced its intention to buy Invista's polyester filament manufacturing operations in Kinston, NC for around $21 million.