AptarGroup facility closures 'not a reaction to the current economic situation in Europe'

15-Nov-2012 - Last updated on 03-May-2013 at 08:44 GMT

The personal care packaging manufacturer is to close two of its European sites and restructure twelve of its facilities in a bid it says, to boost future growth in the region.

President and CEO Stephen Hagge tells Cosmetics Design that the move "is not a reaction to the current economic situation in Europe," but from an evaluation process the company started 18 months ago and recently completed on 19 different facilities, where the "optimum scenario ultimately involved the transfer of production across 12 facilities, with 2 expected to close when we are finished.”

The Dispensing specialist is planning to transfer and consolidate production capacity on the continent, costing an estimated €14m (€18m using current exchange rates) which is also said to ultimately affect 170 employees in the process.

Restructuring

According to Hagge; “We are benefiting from our continual investment in efficient production equipment and our ability to adapt to the changing needs of the markets we serve. In this instance, we looked at product lines, supply chains and production capacity, and the plan will harmonize certain processes and better focus our facilities on the needs of the market."

"By reducing the logistical complexities, we are also becoming more efficient and able to reduce cost and react faster. We will also be more efficient with our use of capital and in better position to benefit from economies of scale as we grow,” he adds.

The CEO further reveals that the company has identified ways to streamline certain product technologies, reduce complexity and optimise it’s production footprint. “This will allow for a more efficient deployment of capital to support our growth in Europe."

Results reveal beauty and home care takes a dive

Earlier in the month, Aptar reported that it's beauty and home care division seen a significant drop in sales by per 6 cent to $358.47m, which represented an increase of 1 per cent in local currencies after the negative impact of foreign currencies.

"Certain customers in the European beauty market remained cautious but this weakness was offset by increased demand from the personal care market," says Hagge.

Overall, sales were said to be down by 2 per cent to $589.6m (Euros459.5m), which the company said was primarily down to softness in the European market, which was counterbalanced by a more dynamic performance in the Latin America and Asian markets.

“The US dollar continued to be strong relative to numerous other currencies and this had a significant negative impact on our results," he added.