The company is honouring existing contracts and expects the division will be wound up by the end of August.
Director Paul Harlow said timber frame was only a small part of business, contributing about £1.5m to the company’s £40m turnover.
He emphasised that the move did not affect other areas of the business – Harlow Timber Merchants, Harlow Poultry Houses, Harlow Stables & Shelters, Harlow Engineered Floors and Harlow Timber Systems, which produces roof trusses and spandrel and roof panels.
The timber frame division, which manufactures open and closed panel systems for the housebuilding and commercial sectors, was set up nine years ago at the company’s Loughborough headquarters.
Mr Harlow said the division’s closure was largely down to the building industry not valuing timber frame. It was often perceived as expensive and that was because the sector was "not prepared to embrace" its full benefits.
"At the end of a lot of contracts the whipping boy always seems to be the timber frame company," he said.
Harlow had supplied some traditional housebuilders because they were unable to source other construction materials but Mr Harlow said he couldn’t guarantee that would continue once supplies improved.
"The closure is regrettable but there are other facets of the business that we can concentrate on which are profitable. We are very much open for business in all other aspects," he said.
