New Ulm-based Associated Milk Producers, Inc. (AMPI) recently informed the 130 employees at its Dawson plant that the facility will close and their positions will be eliminated.

Communications Director Sarah Schmidt told Twin Cities Business on Wednesday that the plant closure stems from the company’s sale of its “aseptic” business, which makes shelf-stable cheese sauces and puddings. The sale of the business to Illinois-based Bay Valley Foods is expected to close in December, and production at the Dawson plant will gradually be transferred to Bay Valley Foods’ Illinois facility through that time, Schmidt said. Terms of the deal were not disclosed, and the plant will officially close sometime after January 1, she added.

AMPI, a dairy marketing cooperative that is owned by 3,000 Upper Midwest dairy farmers, reported $2 billion in sales in 2011 and currently employs about 1,400. In addition to the plant in the small west central Minnesota city of Dawson, which is located about 150 miles west of Minneapolis, AMPI operates 11 facilities throughout the Midwest, including plants in Paynesville, New Ulm, and Rochester.

The company will conduct one-on-one meetings with its Dawson employees to inform them of available “transition packages” and to encourage them to apply for open positions at other AMPI facilities, Schmidt said. Most affected employees work in food manufacturing jobs, although the Dawson plant also houses a small administrative staff, according to Schmidt.

The Dawson plant was the only AMPI facility that produced aseptic dairy products; the others focus on cheese, butter, and powdered dairy products.

The sale of its aseptic business will allow AMPI “to focus assets and resources on our growing area of consumer packed cheese and butter”—for which sales have climbed roughly 40 percent during the past five years, Schmidt said.

According to a report by the West Central Tribune, AMPI purchased the Dawson plant in November 1982, and news of the planned closure came as a shock to employees, as the aseptic line has been running at full speed and workers believed it was profitable. AMPI is a significant employer in the small town, which has a population of roughly 1,500.

Bay Valley Foods considered continuing operations in Dawson but decided against it due to the plant’s distance from Illinois, where its only other cheese sauce and pudding plant is located, the West Central Tribune reported.

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