SSL International P.L.C. will close its last European condom plant in early 2008 when it shuts down a factory in Spain and transfers production to Asia.
The company said it also plans to close a technical center in Cambridge, England.
The Manchester, England-based firm will relocate Durex condom production from Rubi, located near Barcelona, to existing factories in Thailand and India in the first quarter, a company spokesman said.
Work at the Cambridge center will be moved to manufacturing facilities in Thailand, India and Peterlee, England, no earlier than March 2008.
The transfer of production to factories in India and Thailand ``will help reorganize the supply chain,'' the spokesman said. The action is aimed at the rationalization of SSL's condom manufacturing capacity, he said. The move means that all of the firm's condom manufacturing now will be done in the Far East.
According to a company statement, SSL has begun negotiations with its employees at the Rubi plant, a process that is expected to take about three months. The factory closure is subject to authorization from the Spanish Employment Authorities.
The approximately 40 people employed at the Cambridge technical center will be relocated to the company's headquarters in Manchester or to factories in the Far East and Peterlee, which handles health care products, the spokesman said.
By relocating the firm's technical service activities to its principal manufacturing sites, the firm will be able to market its products and innovations at a faster clip, he said.
A one-time charge will be incurred in the current fiscal year because of the two closures, the company said. The shutdowns are expected to improve operating margins beginning in the next fiscal year.
Paced by a 16-percent jump in Durex condom sales, SSL's earnings and revenues rose 6 percent to about $948 million for the year ended March 31. Pretax profits jumped 31 percent to $92.7 million. SSL said sales by its Durex condom division increased 16 percent in the period.