Essentra to close some packaging sites after review of global footprint
Pharma, filters and tapes packaging giant Essentra is set to close some sites this year following a detailed review of its global footprint.
Essentra Packaging, supplying a full secondary packaging range to the health and personal care sectors, will see some downsizing,
The division features 24 facilities across four regions making products including cartons, leaflets, self-adhesive labels and printed foils used in blister packs.
Essentra Components is also being affected by the cuts, and features 14 manufacturing facilities and 29 logistics centres.
The exceptional cost related to these closures is estimated to be around £17m. “We expect to start generating savings in 2021, with annual savings of c£13m from 2022 onwards, helping to underpin the profitability potential of the company,” read a company statement.
There were no details of which sites will be closed and how staffing levels will be affected, with more information expected in a Final Results statement.
Business in Q4 picked up considerably compared to earlier in the year – Group Q4 revenue was -1.1% on the prior year, while Q2 was almost 10% down compared to 2019.
The Packaging division experienced a dip in certain end markets owing to a reduction in the levels of prescriptions and elective surgeries through lockdown periods.
Last year’s Packaging division H2 results closed 4.9% below 2019. “However, recent order book trends have been somewhat improving, as the pharmaceutical and beauty markets start to slowly recover and we build on strong customer relationships. The division continues to play its part in supporting the healthcare industry in its fight against Covid-19, helping to produce secondary packaging for anti-viral and vaccine products, and has recently been honoured with the coveted award of UK Packaging Company of the Year, as adjudicated by Packaging News. The integration of 3C! into the division continues to progress well and is in line with our expectations.”
Essentra added that it is expecting to deliver a total FY20 operating profit number in line with the consensus of analysts’ forecasts of £59m-£63m.