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July 24, 2017 02:00 AM

Ansell launches transformation plan following business divestment

European Rubber Journal Report
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    SYDNEY—Ansell Ltd. is implementing a four-point transformation program following the agreed divestment of its Sexual Health business in May.

    In a news release issued July 19, Ansell said it will be making a cash investment anywhere between $70 million and $100 million during the next three years, mainly on "business transformation," with between $20 million and $30 million in non-cash asset write-downs.

    Ansell plans to invest between $40 million and $50 million of the investment amount in a cost-reduction program, which the company said would deliver pre-tax savings of more than $30 million annually by 2020.

    The Australian company said it will increase growth through focus on core businesses selling to industrial and healthcare end markets, streamlined operations, and accelerated investment in manufacturing technology. Optimistic about the momentum it has from fiscal year 2017, the company said will invest in new manufacturing technology and capacity to support top line expansion.

    During financial year 2018, which began July 1, Ansell will streamline its global business units to two, merging its Single Use and Medical units into a new Healthcare unit that will manage all single-use exam products, surgical and life science products and account for approximately $750 million in sales.

    The Industrial unit will manage all mechanical and chemical hand and body protection solutions accounting for about $700 million in sales.

    The simpler business structure will help reduce distribution cost and improve service to customers, Ansell said.

    In terms of manufacturing operations, Ansell's 13 plants will be linked to the streamlined business units with three sites part of Healthcare, nine sites part of Industrial and the Sri Lanka site supporting both businesses.

    Additionally, the company will be working on improving manufacturing optimization within its Industrial unit, and also investing in automation and technology to add further capacity.

    "We completed our fiscal year 2017 with good momentum in all businesses, achieving 3.5 percent organic growth for the full year and 6 percent in 2H in the ongoing business excluding Sexual Wellness," Magnus Nicolin, CEO and managing director at Ansell, said in a statement.

    The Sydney-based company agreed May 25 to sell Sexual Wellness business for $600 million to Humanwell Healthcare (Group) Co. Ltd. and CITIC Capital China Partners III L.P.

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