Applied Extrusion Technologies Inc. has notified the 126 employees of its Covington, Ky., films facility that it will be closing the plant by the end of March.
The New Castle, Del.-based company develops and produces specialized oriented polypropylene films used primarily in labeling and flexible packaging. The work will be shifted to two other sites, in Terre Haute, Ind., and Varennes, Quebec. The three plants do business as AET Films.
``AET will conduct an orderly shutdown and transition, maintaining supply capability by utilizing existing AET manufacturing capacity to support our current and future business initiatives,'' said Thomas Mohr, president and chief executive officer of Applied Extrusion Technologies, in a news release.
Mohr said the company studied options for Covington during the past year and ``the plant's relatively small size and large infrastructure costs have hindered its long-term competitiveness, and this ultimately led to our decision to close the plant.''
Salaried employees will receive severance pay and benefits, and the company will negotiate with the union over the effects of the closure, Mohr said.
The Covington plant was acquired by AET in 1994 when it purchased Hercules Inc.'s films business.
The building was built by DuPont Co. in the 1920s, according to Brian Crescenzo, vice president and chief financial officer. AET does not use all of the building's 517,000 square feet, and the site requires a great deal of maintenance, he added.
AET once was publicly traded on the New York Stock Exchange, but entered a Chapter 11 reorganization plan to recapitalize its debt. It emerged as a private entity in March 2005.
According to its Web site, AET is an industry leader in the research and development of OPP films. It holds 50 patents and about 15 trademarks and applications.
AET did say it is improving its financial performance by optimizing its product portfolio and redesigning its North American business platform.