American Fiber & Yarn Company has filed for bankruptcy protection

According to the news: The American Fiber & Yarn Company has submitted an application for bankruptcy protection, and the culprit is the economic downturn. The Chapel Hill-based company, which supplies dyed yarn to automotive and home furnishing businesses, once employed 800 people in the southeastern region. But soaring raw material costs, increasing foreign competition and a weakening overall economy finally crushed the company. According to the bankruptcy filing, American Fiber owes between $10 million and $50 million to dozens of suppliers and public benefit corporations. Among these creditors are Dow Chemical, Sonoco Products and Georgia Energy.
RAS management consultant Tim Boates said the future of the company and its remaining 350 employees was uncertain. He said the company would consider a number of options under bankruptcy protection, including auctioning assets. The company was founded in 1999 as a subsidiary of Amoco Fabric Fibers, but was later acquired by Monitor-Clipper Cambridge Partners, a private equity firm. In 2002, the company’s headquarters moved to Chapel Hill, employing approximately 20 people in sales, marketing and administration. In 2006, the company expanded a factory in Bainbridge to meet the needs of overseas customers. The company’s second manufacturing plant is in Afton.
​ ​ ​ Other textile companies, especially apparel companies, have moved overseas or closed due to foreign competition. American Fibers produces fibers that are used in theater seating and office furniture, so the company has not relocated. However, in recent years, fuel costs have increased significantly, and the company’s raw material costs have followed suit, because the raw materials used by the company basically come from petroleum. Coupled with the economic downturn, the company’s business has been affected and it is now unable to repay its debts. The company is likely to be sold as a whole. Last year, many companies discussed acquisitions with American Fiber.
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