Kraft Foods has confirmed that it plans to close a production plant in the US, with the loss of 120 jobs.

The facility in Waupaca in Wisconsin produces speciality spreads and cheese, including under the Athenos, Kraft and Hoffman‘s brands, for retail and foodservice customers.

A spokesperson for Kraft told just-food that the move will “significantly” reduce costs.

Capacity will be transferred to Kraft’s Wausau plant or external manufacturers in Wisconsin “gradually over the next eight to 11 months” and the plant is expected to close by the second quarter of fiscal 2013, the spokesperson added.

“We are taking this action for several reasons. First, Waupaca doesn’t have enough volume to support its overhead in a cost-effective way for the future. Second, as a smaller, somewhat older facility, it also has limited space to be able to accommodate additional volume. Third, by combining Waupaca Feta volume with Wausau and the process cheese volume with our external manufacturers, we will significantly lower our overhead costs and increase our scale,” the spokesperson explained.

The plant’s employees were notified of the company’s decision yesterday (12 June).