Last year, DyStar celebrated 125 years of indigo production at a German facility. This year, it’s closing those doors.

On April 21, the specialty chemical company said it will “restructure” its Ludwigshafen plant in response to changing business conditions and market shifts.

“This is an important strategic move for DyStar. We will focus on developing key emerging markets, which have been shifting over a decade,” Xu Yalin, managing director and president of DyStar Group, said. “In the wake of higher energy costs and inflation, DyStar is determined to further improve cost efficiency and drive sustainable productivity as we continue to deliver the highest quality of innovative products that support the global supply chain.”

The facility has been integral to the Singapore-based company’s global network. DyStar inherited the site from its founders, who started indigo research and manufacturing more than a century ago.

“The restructuring of this facility will be carried out in a phased manner. DyStar will diversify the production activity out of Europe and start with the reduction of manpower as a consequence,” Eric Hopmann, chief commercial officer of DyStar Group and former CEO, said. “DyStar’s customers can be further assured of undisrupted supply, hence their production should not be affected as we will work closely to meet their specific requirements.”

Terminated employees will receive severance packages. DyStar said it will work with the appropriate local resources to support affected employees and their families during the transition. The company also said it will work with customers and suppliers to meet current obligations and discuss the restructuring timeline.

“We understand the change will impact our employees, customers and suppliers. We want to assure you that we are committed to treating all affected parties with due respect and dignity throughout the restructuring process,” DyStar said in a statement. “DyStar Group remains committed to our customers and will continue to serve them through our other facilities in our global network. We value the trust and support of our customers, suppliers, and the local community, and we are committed to maintaining these relationships.”

The news comes three months after DyStar Group’s board appointed Xu as managing director and president of the company he first joined in 2010 and has served as executive board director. After serving as CEO since 2014, Hopmann was named chief commercial officer with a focus on sales and marketing, continuing to report to Xu.