The Rexburg laboratory that manufactured materials for the nationwide Diet Center chain will not be rebuilt after a major fire destroyed it Aug. 22, company officials say.

The decision will affect about 50 employees."The decision was very difficult," said Sybil Ferguson, president of the company. "But the cost-benefit factors stacked clearly on the side of contracting with outside suppliers to meet the growing needs of the Diet Center organization."

Since the fire, the company has been meeting its needs through California companies.

A news release said the decision was further supported by its new strategic focus to a distribution and sales company.

The 50 Rexburg employees will be paid for another 30 days while the company looks for ways to put them into other operations or to formalize a severance and job placement program.

The Diet Center operation started 20 years ago in Rexburg when Ferguson found a successful way to lose weight. The company now has more than 850 franchises and more than 6,000 operators and counselors.

American Health Companies, the parent company of Diet Center, recently was purchased by CDI Holdings Inc. and DC Acquisition Corp., a Boston investment firm organized by the Thomas H. Lee Co. of Boston. It was a $150 million transaction.

"We regret this decision," said Rexburg Mayor John Porter. "If there is anything the city can do to get them to change it, we'll do it," he said. "We'll feel the impact on the Rexburg economy. No question about that."