Rehau Americas will shutter a window manufacturing plant in Winnipeg, Manitoba, by the end of the year because it hasn't been a profitable part of the global company's construction division.
The Leesburg, Va.-based subsidiary of Rehau AG + Co., which also serves automotive and industrial markets, said it is "adjusting" its North American product portfolio.
The Winnipeg plant is winding down production of rigid PVC profiles for residential and commercial window manufacturers in the U.S. and Canada. The closure will affect 75 employees in Canada and small number of people in the U.S.
Christian Fabian, president of Rehau Americas, said customer orders will be completed and the inventory sold off during the transition to a North American focus on technologically advanced, sustainable profile designs.
"The decision to cease operations at our window profile extrusion plant in Winnipeg was difficult but necessary," Fabian said in an April 18 news release. "There is no realistic prospect for profitability and therefore we have reached the unfortunate but inevitable decision to close this facility."
Rehau had an estimated $178 million worth of pipe, profile and tubing production in North America for 2016, placing them at No. 25 in Plastics News' annual ranking. It has plants in Quebec, Alabama and two sites in Mexico.
Fabian didn't elaborate on specific financial challenges facing the Winnipeg plant but the window industry in general is experiencing a lot of consolidation.
To move forward with its own growth strategy, Rehau says it will shift resources to products like its proprietary PVC and fiberglass composite window profiles (RauFipro), high-performance Passive House-certified systems, and security features (Rehau SmartGuard).
Rehau expects to launch the second generation of the composite material (RauFipro X) in the fall. Rehau says the material enables windows to reach larger dimensions and support greater glass weights, which aligns with contemporary architectural designs.
"We have a compelling business need to better align our assets with marketplace trends and customer requirements," Fabian said. "To that end, we are setting up our manufacturing network to serve innovative production lines — in strategic geographic areas — to better meet current and future production needs and the evolving needs of our customers."
Rehau also said it is looking to strengthen its window business in developing markets in Central and South America.
In Winnipeg, Fabian said Rehau recognizes the contributions of employee and is placing "the highest priority on treating them fairly and respectfully," but again no details were given.
Rehau is a privately held company with about 20,000 employees at 170 locations all over the world.