After more than two years in operation, a plastics manufacturing plant south of the city of Rio Communities has announced it will be closing its doors soon, leaving more than 100 people without jobs.
Keter U.S. Inc., which began operation in the Rio Grande Industrial Park in late 2017, will cease production on July 31, Tom Lombardo said Friday evening.
Lombardo, the company’s strategic business unit leader, notified the plant’s nearly 60 full time employees and the dozens of part time workers of the decision via video Thursday, May 28 and Friday, May 29.
Because of travel restrictions in response to the novel coronavirus pandemic, Lombardo wasn’t able to come to Valencia County to notify employees in person.
“Regardless, either across a desk, face to face, or by video, this is a very difficult decision” he said. “This is not a reflection on the workforce – the associates there are a very dedicated, hard working, technically sound workforce. This is a wonderful community. We’ve been active in the community, as has our (human resources) director, Daniel Aguilar.
“Everyone there is talented and passionate; we are thankful for the team. This is an economic, business decision, and it’s a tough one. But at the end of the day, it was a business decision that had to be made.”
As a global enterprise, Keter went through a review of its plants in different parts of the world and North America, Lombardo said, making sure its network of warehouses and distribution centers was optimized for its customers and the company itself.
“After we went through that analysis, we needed to make adjustments in our networks and did a rationalization of our facilities,” he said. “Through that, we determined we needed to make a consolidation and have a closure of the Belen site.”
The plant will continue to manufacture products through the end of July, then the inventory will be warehoused and distributed from there through the end of September. Manufacturing will be consolidated to Keter’s North Carolina and Indiana facilities, Lombardo said.
“This analysis and decision predates COVID-19, absolutely,” he said. “Our original intention was to be a little earlier in the announcement but because of the current environment, we delayed. It was the right thing to do with the impact to employees.”
There are about 60 full-time employees at the facility, and between 40 and 50 part-time workers. All of the associates will have the opportunity to transfer to another Keter facility, Lombardo said. The company has plants in North Carolina, Indiana, near Pittsburgh and in Milton, Ontario, Canada.
“All of those are open for potential transfers for all associates, all the way down to our operators, the direct labor,” he said. “If there is interest, we will work with them on these opportunities.
“We do understand the Belen marketplace has a strong culture and family ties, so we’re not sure how that will work out, but we do know there are already some who are going to make moves.”
As for specific plans for the facility, which sits on a bit more than 39 acres, Lombardo said the company’s intentions would be to work with the state and city of Belen to put it on the market for sale or lease, if the right fit could be found.
The plastics company bought the old Solo Cup facility in the Rio Grande Industrial Park and 14 acres to the south of it in the spring of 2014. Solo Cup closed it’s 165,000-square-foot Valencia County plant in early 2009, eliminating about 215 local, full-time jobs. The late Herman Tabet purchased the property in 2011, then sold it to Keter.
When Keter made the purchase, due to changing standards in manufacturing, the ceilings at the Solo Cup plant weren’t high enough, so the company built a brand new 80,000-square-foot manufacturing plant on the vacant portion of the property, leaving the existing building for warehousing and shipping. Lombardo said the company’s investment in the property was just shy of $30 million.
To close the deal between Keter and Tabet, the city of Belen traded 27 acres of municipal-owned land in the Belen Industrial Park south of the city off N.M. 116, and 30 acres of water rights to Tabet for the 14 acres south of the Solo Cup facility. The city council also approved $40 million in industrial revenue bonds for Keter.
Lombardo said any funds the company did not qualify for under the terms of the contracts for the IRBs it had with the city and the state would be paid back.
“There are two different pieces – money granted through the city will go back to the city and money from the state will go through the city and back to the state,” he said. “There were some funds available that we never received because we were not qualified.”