ORANGE COUNTY, Va. (WVIR) - A company in Orange County that makes adhesive products is consolidating.

Lohmann Corporation announced it will close its San Jose facility by the end of the year and transition that work to its facility in the Thomas S. Lee Industrial Park in Orange County.

In a release, the company’s president said Virginia's tax and regulatory environment is more favorable.

04/10/2017 Release from the Lohmann Corporation:

San Jose, CA –April 10, 2017 – Lohmann Corporation announced today that it will consolidate adhesive engineering and die cut operations within its newly expanded plant located in Orange, Virginia. The move is one component of an overall strategy designed to improve the efficiency of its operations, speed customer turnaround time, and ensure the continued cost-competitiveness of its business units.

By December 2017, Lohmann plans to close its San Jose facility, effectively eliminating 35 positions at the California plant. All die cutting activities will transition to the new 25,000 square foot facility now under construction at Lohmann’s manufacturing facility in Central Virginia’s Thomas S. Lee Industrial Park.

Lohmann acquired G&L Precision Die Cutting and its San Jose plant in 2009 to complement its adhesive engineering capabilities and state-of-the-art coating plant in Virginia. Lohmann’s products are used in graphics, wearable electronics, construction, medical, and automotive sectors.

“Relocating and closing facilities are extremely difficult decisions,” said Steven De Jong, president of Lohmann Corporation. “In a highly competitive environment, however, vertically integrating operations in a centralized location is a strategic step in ensuring the continued growth of our businesses.”

Another key consideration is that the Orange plant also has the advantage of more direct access to North American automotive OEMs, automotive tier suppliers, and the north-south transportation infrastructure that services them.

“We do understand that Northern California remains an integral area for innovation and for this reason we will maintain an office with engineering support and limited production for prototyping and fast responses to our customers,” De Jong said. “The rapidly growing demand we continue to see in our medical specialty, flexographic printing, and automotive tape businesses requires a constant assessment of our strategic options. Virginia’s highly competitive tax and regulatory environment is more favorable to Lohmann operations and future growth plants,” said De Jong.

As part of the consolidation, all program work and some employees will transition to Virginia, creating operational efficiencies and reducing costs.

“We regret the impact this action will have on our employees in California, but this step allows us to more vertically align our operations which will lead to greater service and value to our customers.”

Lohmann is working closely with its employees to help make the transition as smooth as possible, including generous severance and ample time to find new employment in a region with already low unemployment. When fully implemented, the consolidation is expected to result in a net gain of six employees at the new facility in Virginia.