SSL International P.L.C. has put its medical division, which includes latex and synthetic latex gloves, up for sale to create a leaner operation that will focus solely on the firm's consumer division.
The company said March 31 it will invest most of the proceeds from a sale into the consumer unit, which includes its condom business, making it more competitive on the global market, while the remainder will be used to cut debt.
The medical division consists of the firm's wound management and compression therapy, Regent Biogel latex and synthetic latex surgical and dental gloves, and Hibi antiseptic businesses. The consumer division makes condoms, including the Durex brand, as well as Scholl-brand foot-care products and some over-the-counter medicines.
SSL decided to sell the medical operation in late March after its board of directors completed a company strategic review that began several months ago, a spokesman said. It concluded both the medical and consumer operations were large and each had great growth potential.
The board also recognized the importance of adding resources to develop both divisions. The company believes ``it can grow faster concentrating on one division rather than both,'' the spokesman said.
A timetable has not been set on the sale, he said, adding that working out the best deal is more important than the time frame.
SSL has a long history in the glove business, manufacturing its Regent brand of surgeons' and dentists' gloves at two plants in Malaysia. Medical products constitute about one-third of SSL's annual $950 million in sales, with the consumer unit making up 55 percent and its Marigold industrial and household glove unit 8 percent.
The decision to sell its medical glove business marks the second time the company has put a glove operation on the selling block in less than a year.
The firm quietly put its Marigold industrial and household glove unit up for sale in June 2002. At the time, an SSL spokeswoman said the segment was doing well and there was no pressure to find a buyer.
The spokesman said SSL continues to review proposals for the business, but would not comment on the status of discussions with possible buyers.
The Marigold segment offers a variety of industrial and household gloves-most made from natural rubber, nitrile rubber or vinyl-that run the hand protection gamut.
The company has been restructuring and streamlining since mid-2002, and the efficiency program is proceeding on course, the firm said. During the last several months it has sold its headquarters in Cheshire, England, and relocated its base to a smaller facility in central London, trimmed an estimated 300 administrative jobs throughout its European operations, invested heavily in its research and development unit, and improved its supply chain processes and service levels.
SSL said revenus of all business units have been impacted by difficult market conditions, particularly in the U.S. and Italy, and sales for the fiscal year ended March 31 are expected to fall from last year. Financial results likely will be released in early June, the company said.