Aloterra Packaging LLC is shutting down its Ashtabula, Ohio, facility and laying off almost 40 people, according to a WARN letter filed with the state.
On its website, Aloterra describes itself as a "next generation agribusiness," which aims to both grow crops and turn those crops into finished products in the same community. Aloterra grows miscanthus, a type of noninvasive grass, and uses it to make products like compostable packaging.
Layoffs of the 39 employees will begin on or around Oct. 6.
In a news release, Aloterra attributed the closure to a decision by Fabri-Kal Corp., a thermoforming company based in Kalamazoo, Mich.
In an email, Jon Griswold, Aloterra CEO, said Fabri-Kal has owned an increasing portion of the Ashtabula facility since 2017. Today, Aloterra LLC owns less than 10 percent of the Ashtabula facility, he said.
Fabri-Kal in an email confirmed that it was "one of several investors" in Aloterra Packaging. It described Aloterra Packaging as a standalone entity and said the closure was due to the discontinuation of a product line.
Fabri-Kal is the No. 8 thermoformer in North America, according to Plastics News data, with estimated sales of $410 million.
In the release, Griswold said the Ashtabula facility was "excellent for proving the technology and miscanthus pulp as a commercial fiber, but it was inefficient."
"Both parties knew expansion was necessary to reach acceptable levels of profitability, but in the end the facility's location had too many issues related to space, utilities and a difficult landlord relationship," he continued.
Griswold said in the email that Aloterra LLC, the parent company, retains its intellectual property. The company plans to reassess locations in Northeast Ohio "to build a more efficient operation at a better location," according to the news release. The company's farming, research and development and other manufacturing facilities will continue.