SSL International P.L.C. will streamline its European operations to reduce overhead costs, in the process eliminating about 300 jobs.
Included in the restructuring is closure of the company's Cheshire Toft Hall headquarters and relocation of its base to a smaller corporate facility in central London, a spokeswoman said. Employees at Toft Hall will be relocated either to existing facilities in the northwestern section of England or to the London corporate site.
The move to London from Cheshire likely will take place this summer, she said.
The restructuring of the organization's European functions will be split evenly between the United Kingdom and the remainder of Europe, the spokeswoman said. The job cuts primarily will be administrative and manufacturing positions probably won't be affected, she added. The company did not say if any facilities besides Toft Hall will close.
However, SSL's board of directors is conducting a probe of the firm's logistic and distribution processes as part of an ongoing business review, including a re-examination of manufacturing systems and plants. The board is expected to conclude the study at the end of the year.
A key part of the firm's plan is implementation of better information systems company-wide, Chairman Ian Martin and Chief Executive Brian Buchan said in the medical glove and condom maker's preliminary results report, released May 28. The introduction of integrated business systems has begun, they said, and will continue into next year to ensure improvements are made quickly and without disruption in the firm's operations.
In addition, the spokeswoman said, SSL will ``significantly improve'' its supply chain processes and service levels, in part by expanding a customer service improvement program successfully launched in the United Kingdom in late 2001 to other parts of the world.
``This radical plan'' to cut overhead, streamline and restructure, ``is necessary to improve margins and shareholder returns, while maintaining vital investment in brand development,'' the two officials said in the preliminary report. To continue to upgrade the company's primary brands, SSL is emphasizing research and development and employee development along with better systems.
The firm's existing high level of operating costs, particularly in Europe, reflects overmanning, duplication of activity and increased insurance costs, they said.
The restructuring possibly will result in a one-time charge of about $26.2 million in 2002 and produce similar annual cost savings, which will accrue progressively through March 31, 2003, the company said.
SSL's operating and cost issues that required attention are well on their way to being fixed, Buchan said. ``Our primary objective is to bring the improving pipeline of products and marketing ideas to the market quickly in order to accelerate our sales growth.''
The company's focus will be on growth of its top lines: Durex condoms, Scholl foot care goods, Regent Biogel medical gloves and Hibi hand antiseptics. Supplementing those lines will be additional midsized brands, which will give SSL the critical mass needed to utilize local facilities more efficiently in its consumer health care and medical divisions, the firm indicated.
SSL will make sizable increases in its research and development and marketing investments in fiscal 2002 after doing the same last year to help expand key businesses, the spokeswoman said.
To boost sales further, SSL is combining its Hibi range of hand products with Biogel latex and synthetic latex surgical gloves under an umbrella brand, Regent Infection Control, marketed as a complete hand hygiene and protection solution, both in the operating room and non-sterile hospital environments, the company said.
Martin said SSL-which had sales of about $865 million for the fiscal year ended March 31, down from the $948 million recorded the previous year-achieved its objectives during the last several months, ``both in terms of our results and in redefining and refocusing our business. Our task now is to ensure that we realize the benefit from reinvigorating our brand portfolio by establishing a firm grip on our operating methodologies and on our cost base. The proposed changes...underline our determination to deliver a sustained improvement in operating margins.''