MWV reports significant losses following reorganization
Weighed down by a loss from “corporate and other” of $175m, the company posted a net loss of $79m in the quarter compared to a loss of $4m last year.
Quarterly turnover was also down from $1,518m in 2008 to $1,354m this year as sales figures slipped across all divisions except community development and land management.
Healthcare prospers, personal care struggles
In the consumer solutions division sales fell 12 percent to $533m. Within the business, MWV said healthcare packaging prospered on the continued success of its Shellpak solution.
However, sales fell slightly in beverage, tobacco and home and garden, and in personal care and media packaging, MWV suffered more pronounced sales declines.
Despite the declining sales picture, the division generated a bigger profit in the quarter. Organizational changes and lower input costs helped take segment profit up to $13m from $9m last year.
Shifting product focus in consumer business
To further protect the bottom line and bolster sales MWV is shifting its business focus in the consumer division towards higher value, differentiated packaging products.
In both personal care and healthcare, MWV is reducing its involvement in secondary packaging but plans to strengthen its primary packaging portfolio.
The company has already closed two secondary packaging factories, in Louisa, Virginia, and Caguas, Puerto Rico, that convert visual and paperboard packaging for the personal care and pharmaceutical markets.
MWV is reducing its secondary packaging portfolio to products like Insight Visual Packaging where patents provide it with a comparative advantage. Meanwhile, the company is on the lookout for profitable primary packaging opportunities.
Commenting on the realignment of the business in March, Jim Buzzard, president of MWV said: “The alignment of our resources into more profitable markets will enable us to improve performance and better support the development of differentiated solutions.”
