Shipping company Maersk Container Industry (MCI) has announced the closure of its factory in Chile's San Antonio, just three years after it opened. 

Maersk's facility in San Antonio. (Source: Maersk Container Industry San Antonio's Facebook page)

The decision to cease operations at the refrigerated container plant means 1,200 employees will be laid off, Diario Financiero reported.

In a public announcement, the company said the decision was final and was due to the overproduction of containers around the world, along with the ongoing difficulties of finding suppliers of essential inputs and materials.

"I would like to say that this is a necessary decision, but one that is painful at the same time. We are very sorry for the effect that this will have on our workers and their families; many of whom have been with us since the beginning," MCI general manager Ronnie Jensen was quoted as saying.

The move was announced on Thursday to the workers, authorities and the company's clients.

The company added that the closure would not affect any of A.P. Moller - Maersk's other operations in Chile.

Plans to build the factory near to one of the South American country's biggest ports were first announced in 2011, with an expected investment of US$250 million. The plant began producing containers for international shipping companies in 2015.

The company mentioned that it had built seven container plants in Chile in just six years. It added that 90% of the materials needed for the production of containers had to be imported, which increased both costs and the time required to fulfill customer orders.

Local media Biobio Chile reported that the chief of worker union Sindicato 2, Alejandro Villatoro, said formal complaint would be made against the company for allegedly threatening workers and infringing on their rights.

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