Enfield's STR Holdings Inc. will close its new East Windsor manufacturing facility by the end of this quarter as the company will lose its top customer and needs to restructure.
The solar encapsulant manufacturer announced after the stock market closed Tuesday that its long-standing customer First Solar, Inc. will end its relationship with STR sometime this year, necessitating the need for STR to eliminate a large swath of its workforce.
STR purchased the 275,000-square-foot East Windsor facility for $4.9 million in 2011 to consolidate all its U.S. operations into one location. The company has 500 employees and produces protective encapsulants for solar photovoltaic cells.
The company did not specify the exact number of job reductions.
First Solar is STR's largest customer with sales of roughly $39 million during 2012. First Solar named STR one of its top suppliers in 2011, but STR President and CEO Robert Yorgensen would not specify in the announcement why First Solar was ending the relationship.
Yorgensen did not return calls for comment on Wednesday morning.
Yorgensen said in the announcement STR added three new customers in China, but it won't make up for the loss of First Solar's business.
STR rode the wave of solar growth in 2010 and early 2011 as government subsidies, particularly in Europe, fueled worldwide demand. At one point, STR held one-third of the total global encapsulant market.
As demand increased, competition in the solar encapsulant market did as well. Then the global solar market plunged with oversupply, sending STR's revenues spiraling to multimillion losses each quarter. In the third quarter, the company did manage to have its first positive quarter since the third quarter 2011, earning $667,000.
In addition to the loss of First Solar, STR also announced Tuesday it hired UBS Investment Bank to help the STR board review strategic alternatives.