Essentra confirms strategic review of Packaging wing
Friday, November 26, 2021
Essentra has confirmed it plans to exit the packaging market, and has begun a strategic review of its £363m turnover Packaging division.
Last month the group announced that it planned to focus on its Components operation, with the Filters and Packaging divisions likely to be sold off as a result.
The Packaging wing is currently £897m turnover Essentra’s biggest business unit.
It has 25 facilities in three geographic regions and produces cartons, leaflets, self-adhesive labels and printed foils used for blister packs.
Packaging's UK sites are in Bangor, Bradford, Newmarket and Newport. It has a tear tapes operation in Nottingham, while the Jarrow site also houses a Filters business.
The division serves clients in a range of markets including pharma, beauty, industrial and consumer goods.
In a statement, Essentra said: “This review will run in parallel with the previously announced strategic review of Filters, which is progressing as planned. The board remains focused on maximising shareholder value and it is anticipated that both reviews are likely to conclude in Q2 2022 at the earliest.”
Essentra will end up as a much smaller business as a result. The highly profitable components operation has sales of £255m.
Essentra is also looking for new finance chief. CFO Lily Liu, who joined the business three years ago from Xaar, is leaving the PLC to join £1.6bn turnover chemicals business Synthomer in the same role. She will remain in her post until 30 June 2022.
Chairman Paul Lester said the business wished Liu well for the future: "On behalf of the board I would like to thank Lily for her contribution to Essentra over the past three years. She has played an important role in helping the team deliver on the group's strategy and growth objectives.”
Essentra acquired Clondalkin’s Specialist Packaging division in 2014 in what was a $455m (£346m) deal, and the group’s biggest acquisition to date, at the time.
The PLC went on to consolidate nine of the 24 sites purchased into its other operations, but the “challenging and complex” process did not go smoothly and proved costly and disruptive for the group.
The Packaging operation specialises in secondary packaging for healthcare and pharma. The division made a near-£9m operating loss last year on sales down 6.1% after making a £13.6m write-off of acquired intangible assets and a £9.1m charge related to restructuring. The operating profit prior to these charges was £13.8m.