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Home appliance giant Electrolux AB's factory in the Montreal-area town of L'Assomption can no longer compete in a world of low-cost production and will have to close, the company says.

An estimated 1,300 jobs are expected to be lost as a result of the closure of Stockholm-based Electrolux's decision to shutter the facility, which makes cooking appliances.

It is Electrolux's only manufacturing plant in Canada.

"This has been a very difficult decision to make but it has become a necessary decision," Electrolux North America spokesman Tony Evans said As we make competitive analyses of our various markets and businesses, it became very apparent that in the cooking-appliance segment we needed to radically alter our cost structure to stay competitive," he said.

Production at the plant in L'Assomption – east of Montreal – will be transferred to an unnamed facility starting in mid-2010, said Mr. Evans.

Production will be completely phased out by the end of 2013, he said.

Other major appliance manufacturers have shifted production to lower-cost markets over the years, Billy Benson, vice-president of operations for Electrolux Major Appliances North America, said in a statement.

"We are sensitive to the impact of this announcement on our employees and the community," he said. "We are announcing this decision more than a year in advance of the first production moves – and in some cases up to three years – to allow employees to make their plans for the future, and to provide the community time to attract new investment."

The company intends to keep about 75 jobs at its R&D centre on the site for a further six to eight months after production ceases.

Electrolux has seven manufacturing plants in North America.

"Apart from the challenges of the recession, consumers are demanding competitively priced products featuring the latest technologies, requiring manufacturers to continually reinvest in product innovation while managing costs," Mr. Benson said.

Electrolux is the second-largest household-appliance maker in the world, after U.S. giant Whirlpool. Among its products are refrigerators, dishwashers, dryers, ranges, air conditioners and vacuum cleaners.

Sales in 2009 topped $14-billion (U.S.)