Back in January, MWV reported a loss in continuing operations for the fourth quarter and reported that its yearly results were affected by the economic situation in Europe and North America.
Company president James Buzzard has come out and explained that results in the Consumer segment which affected the figures heavily were due to a weaker demand for personal care packaging in Europe, as well as a weaker euro.
Europe hit hard
“More than half of our beauty and personal care business is in Europe where the economic crisis had an impact on consumer demand and resulted in more aggressive inventory management by customers, particularly in November and December,” he said.
Whilst the financial situation is far from stable at the moment, Buzzard believes that business will pick up again in Europe and denies that the situation is anything like it was in 2008; the last recession.
“In the personal and beauty care, it's a mix. The high-end, the prestige, fragrance and those sorts of things, are down dramatically and not unexpectedly given the economy. In some of the more masstige end markets, we're doing quite well.”
According to Buzzard, in Europe, demand fell off more in the personal and beauty care markets as spending is more discretionary, thus MWV is reacting both to a falloff in demand, as well as fewer new product launches.
Due to this, the fourth quarter was weaker than MWV had anticipated, however the company believes this is mostly attributable to the crisis in Europe and economic challenges in North America, and that these packaging markets still have very attractive long-term growth rates.
“We have grown our market share position in fragrance and continued to win market share in the skin category in Asia,” quipped Buzzard.
“Some of our customers are talking about new project launches and the potential for growth in 2012, and we are positioned to win more than our share of this business through commercial excellence initiatives and a strong pipeline of innovative products,” he added.