Leading European dye manufacturer Yorkshire Group and its long-standing German trading partner, Dohmen, have formed an alliance in an attempt to cut costs and improve their purchasing power.

The announcement was made as Yorkshire Group posted a pretax loss of £6.4 million for its first half compared to a profit of £0.8 million a year earlier. Turnover fell to £56.3 million from £65.9 million, hit by an "unexpected downturn" in June and July.

Chairman Pat Barrett warned that the Group wouldn't return to profit until 2003.