Dairy group Dean Foods has announced that it is to cease operations at its Reiter-Akron plant in Barberton, Ohio, due to excess capacity in the region, but will be investing US$1m in building a new distribution centre in Akron.

Production will cease at the Reiter-Akron plant, which employs some 242 people, in early-February. The new distribution facility will come on stream in autumn 2007.

The company said the new distribution unit will employ approximately 45 drivers and eight to 15 warehouse staff.  In addition, Reiter's existing sales staff will remain in place, the company said. "We will stay an integral part of the community," said group vice president John Gillam. "We have been part of this area for over 70 years and we don't plan to leave any time soon."
 
Around 50% of the volume from the Akron-Reiter plant will be transferred to two Pennsylvania operations and the other 50% to the company's unit in Springfield, Ohio. While there are opportunities for drivers at the new distribution unit, the situation for the 165 workers at the Reiter-Akron facility who do not hold commercial drivers' licences, which would qualify them for those positions, looks bleaker. The company said that these workers will be the ones "most affected" by the closure.

The company added that the Reiter brand remained "a solid asset" for the company, and one that it planned to continue to grow with ongoing advertising, promotions and partnerships with local retailers.