Engergizer Holdings has announced that it will close it Montreal production facility as part of efforts to restructure and consolidate its soon-to-be separated personal care business.
The facility manufactures feminine care products and future production is expected to be incorporated into the company’s Delaware facility by early 2017, as a means of consolidating costs.
The move is part of a previously announced restructuring program that should add approximately $350m in total restructuring costs and $300m in total restructuring savings, according to the company.
Closure will mean the loss of 430 jobs
Currently there are 430 people employed at the facility, with the consolidation expected to take place in phases from the Summer of 2015 through to early 2017.
"This was a difficult but necessary decision to maintain the company's position in this highly competitive business," said David Hatfield, President and Chief Operating Officer, Energizer Personal Care.
"This decision is being announced now to maximize planning and transition time for all colleagues and the community. We will support our colleagues through this transition, and will work with local officials to ensure that support and resources to help colleagues re-enter the labor market are made available."
Energizer business to be split in two
Back in April Energizer Holdings announced that it would split its business into two independent publicly traded companies, one for personal care and the other for its household division, focused on Energizer batteries.
The company has said that the separation should be finalized by the second quarter of financial year 2015, which could ultimately make the two companies a takeover target for investors.
For many industry experts the company’s two divisions have looked incongruous as part of the same operation, and it is widely thought that the split will give the two businesses better focus.
Personal care includes big brands
The household products division reported sales of $1.9bn in the 12 months up to March 31 this year, whereas the personal care unit had sales of $2.6bn for the same period on the back of brands such as Hawaiian Tropic sunscreen and Schick razors.
The announcement comes off the back of a dip in the company’s second quarter revenues, with sales down by 3.1% to $1.06bn, which represented a fall in organic sales of 6.1%, which was mainly due to a poorer performance from the Household products division.
However, the company said that its net earnings were up from $84.9m to $98.5m, a figure that was mainly down from gains from cost savings on the back of its restructuring plan.