Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • Women in Tire & Rubber
    • ITEC
    • International Elastomer Show
    • HEXPOL Sponsored Content
    • Latin America faces tough recovery from COVID-19, KraussMaffei executive says
      Tactile Mobility adds depth to connected tire technology
      GM to restart Spring Hill production next week, cancel Chevy Blazer downtime
      Detroit 3 execs join voting rights debate in Michigan
    • Tactile Mobility adds depth to connected tire technology
      5 for 50: Bruce Meyer's five most memorable work trips
      Japanese R&D cooperative claims breakthrough in sustainable butadiene sourcing
      Apollo isn't planning U.S. tire plant—yet
    • Evco Plastics buys Georgia plant to add LSR, white room molding
      Annual CAR MBS will be held as hybrid event
      Goodyear Ventures, partnerships carrying tire maker into the future
      Cancarb recognized for sustainability efforts
    • World Rubber Summit to be virtual this year
      Kuraray raising elastomer prices again
      AirBoss unveiling high heat-resistant EPDM
      Synthomer launches Asia innovation center in Malaysia
    • 5 for 50: Bruce Meyer's five most memorable work trips
      AirBoss unveiling high heat-resistant EPDM
      Evco Plastics buys Georgia plant to add LSR, white room molding
      Saint-Gobain unveils new silicone tubing for food, beverage market
    • Latin America faces tough recovery from COVID-19, KraussMaffei executive says
      Titan Tire to offer free COVID-19 vaccines at Iowa facility
      Bridgestone hosts vaccination events for plant employees
      USTMA reveals data showing COVID-19 impact on tire industry
    • Detroit 3 execs join voting rights debate in Michigan
      Harwick Standard hires Marc Pignataro to executive role
      Motion Industries promotes industry veteran Jim May
      Hutchinson names new chairman, CEO
    • Detroit 3 execs join voting rights debate in Michigan
      Avon Rubber expects 40 percent rise in half-year sales
      Top Glove says U.S. withhold order bears no financial impact
      AirBoss gets U.S. glove pact worth up to $576 million
    • Column: Ramping up to an RPN milestone
      Our view: It may be time to rethink, rebuild supply chains
      Editorial: Auto industry's rebound a bright spot in difficult year
      Future looks positive for Goodyear-Cooper combo
    • Material to give tire compounds lower density, lower hysteresis and improved wear
      Technical notebook: How to control porosity in extruded EPDM dense profile
      Part 2: Studying RPA ASTM methods for detecting compound quality differences
      Studying RPA ASTM methods for detecting compound quality differences
    • WORD Conversations: Charles Goodyear Medalist Puskas says academia needs to ease time commitments
      Women find success, opportunity in petrochemicals
      Rubber Division to host WORD webinar series
      Rubber Division introduces WORD webinar series
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Rubber Division preparing for Spring Technical Meeting
      Rubber Division introduces WORD webinar series
      Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: MonTech adds to LP 3000 lab press lineup with custom options
      New Products: 3M rolls out new silicone adhesive for medical use
      GRI gains OE fitment for KION Group forklifts
      New Products: Hexpol develops new salt-water hydrophilic waterstops
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Latin America faces tough recovery from COVID-19, KraussMaffei executive says
      Tactile Mobility adds depth to connected tire technology
      GM to restart Spring Hill production next week, cancel Chevy Blazer downtime
      Detroit 3 execs join voting rights debate in Michigan
    • 5 for 50: Bruce Meyer's five most memorable work trips
      AirBoss unveiling high heat-resistant EPDM
      Evco Plastics buys Georgia plant to add LSR, white room molding
      Saint-Gobain unveils new silicone tubing for food, beverage market
    • World Rubber Summit to be virtual this year
      Synthomer launches Asia innovation center in Malaysia
      Sunflower rubber research expands with new funding
      Top Glove says U.S. withhold order bears no financial impact
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • HB Chemical
      Sponsored By HB Chemical
      The HB Chemical and Ravago Partnership: Taking Customer Service to a New Level
      Sponsored By HB Chemical
      Above and Beyond with HB Chemical
      Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By AirBoss
      AirBoss introduces next-gen EPDM compound: HeatBoss EPDM
      Sponsored By Uncountable Inc.
      Labs of the Future: How to Choose a Laboratory Information Management System in 2021
      Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2021 International Latex Conference Virtual Edition
      2022 ITEC
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
October 22, 2018 02:00 AM

Ansell prepared to continue evolution

Mike McNulty
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    ISELIN, N.J.—Ansell Ltd. has changed significantly in the last year and it's likely the giant health and safety product maker will evolve more in the next two years.

    It reached a deal to sell its Sexual Wellness business in May 2017 and launched an extensive four-point transformation program in July 2017 aimed at streamlining its entire operation to accelerate growth and profitability of the firm's remaining businesses.

    Ansell completed the sale of the SW business—including its rubber latex and non-latex condom unit and plants in three countries—to a China-based consortium for about $600 million on Sept. 1 of last year. The company plans to spend about $100 million in cash during a three-year span to cover the transformation project.

    Net cash proceeds from the sale of the SW business, after tax and costs, totaled about $523 million, a spokesman said. Sale of the operation "removed a key source of complexity in the business, providing Ansell with the opportunity to sharpen its focus on its core markets and move to enhance its leadership and engagement in workplace safety markets," he added.

    Once the transaction was completed, the firm merged its three business units into two: Health Care and Industrial. The company's Single Use and Medical operations became part of the Health Care business that manages all single-use examination and surgical gloves along with its life science products. Its Industrial business makes and markets multi-use protection goods for hand, foot and body protection used in almost every industry.

    The initial result from the restructuring: Sales of almost $1.5 billion from continuing operations in fiscal 2018, up 8 percent from those recorded in fiscal 2017, the company reported in late August. Profits rose to about $484.3 million, including a $345.5 million after-tax gain on the sale of the SW business, up from $147.7 million last year. Profits from the firm's continuing businesses totaled $138.8 million, up from $119.5 million in fiscal 2017.

    "This year has seen significant positive changes in our company as we reshaped it to be a sharper focused enterprise following our exit from the Sexual Wellness business," Chairman Glenn Barnes said in the company's fiscal annual report.

    He said Ansell's directors "have been pleased to see the maintenance of organic growth (which rose 4 percent in constant currency in fiscal 2018 compared to the year before) in a year when our people have been called upon to complete the challenges of exiting from a major business and reshaping our remaining core.

    "Our structural transformation program is tracking well, with current year benefits ahead of plan, and the whole program (is) on track to deliver gains in sustainable profit and cash flow for the next two years."

    Magnus Nicolin, CEO and managing director, was equally pleased, noting that the company continues to make progress in the execution of its growth strategy. He cited "innovation, emerging market expansion, brand focus and distribution partnerships" as the prime reasons for the improvement

    Overcoming obstacles

    There were hurdles Ansell—which is headquartered globally in Sydney and has its North American base in Iselin—had to overcome during the last year. Topping the list was a temporary spike in raw material costs "which affected our cost of goods sold during the early months of fiscal 2018," according to Nicolin.

    Ansell's spokesman said the spike was driven partly by the carryover impact from higher cost raw materials held in inventory from fiscal 2017. "Also, pricing on other raw materials, particularly synthetic nitrile latex, increased on strong demand/supply dynamics."

    However, he said, "that eased off—particularly as natural rubber latex pricing eased from its peak in late fiscal 2017—and margins were restored in the second half of the financial year."

    Heading into fiscal 2019, the spokesman said raw material costs are rising again, "driven by increases in nitrile and advanced synthetic latex, offsetting the lower natural rubber raw material costs and approaching the peak levels seen in fiscal 2017."

    Ansell has a multitude of strategies to leverage the macroeconomic environment and plans to offset increasing cost pressures stemming from the hike in raw materials, he said.

    Another obstacle could be new tariffs on imports from the U.S. to China, the company said.

    "Rising concerns about the U.S./China trade dispute and increased tariffs are expected to increase Ansell's U.S. import costs by $5 million—$10 million annualized, although the timing remains uncertain," the spokesman said.

    He said that "any escalation of the dispute between the two countries could significantly increase the range of the impact as well as its effect on U.S. demand."

    The potential for a trade conflict between the U.S. and the European Union "appears to be receding and currently we expect no direct impact on Ansell in fiscal 2019. Escalation of conflict to other regions—particularly Asia-Pacific—could have a significant impact, although currently this appears a remote risk," the spokesman said.

    Focused changes

    Ansell's transformation program is continuing to progress well, according to Nicolin, "and is slightly ahead of expectations at this point."

    He said the company's manufacturing and supply chain components of the project "are well advanced to deliver expected benefits in fiscal 2019 and more specifically in fiscal 2020."

    Changes have been made and the initial steps of the program "have been completed smoothly in line with expectations and we are on track to meet or exceed our savings targets of at least $30 million by fiscal 2020," Nicolin added.

    Ansell's original goals for the project encompassed both cost reductions and growth investments, he said. "These plans are also on track. The expansion of our Vietnam facility is progressing smoothly and we are confident the site will be a cornerstone of Ansell's manufacturing leadership in advanced hand protection for years to come."

    Thus far, the firm has spent about $20 million on the expansion of the Vietnam plant, the spokesman said.

    "We are in the advanced stages of finalizing a $30 million multi-year investment in our differentiated stage use chemical resistance technology with a focus on industrial end markets," Nicolin said. "This new investment will allow us to retain in-house the critical process and technical know-how essential to the product range, while also allowing us to build the scale to be highly cost competitive."

    In addition, the company is developing plans to invest more than $10 million in its chemical and life science manufacturing centers in Malaysia, he said.

    Ansell also plans to begin a multi-year program of upgrading the operating systems used in its supply and manufacturing facilities, "a key enabler to our overall supply chain excellence, manufacturing productivity objectives and digital E-commerce deployment," Nicolin said.

    Looking ahead

    Rising raw material prices and possible tariffs on U.S. imports remain concerns for the safety product manufacturer. They could be key negative factors as the fiscal year progresses.

    External market conditions in fiscal 2019 are expected to support future growth, the firm said, but they are also creating tight demand/supply conditions, particularly for nitrile rubber latex products, which recently led to increases in raw material costs for those and other materials.

    But overall, Ansell is targeting continued organic growth in the range of 3-5 percent. And it expects transformation cost benefits, product and product mix actions to benefit EBIT growth.

    Nicolin said the company remains on the lookout for merger and acquisition possibilities, as long as they fit strategically and create value.

    Ansell has passed on some possible acquisitions in the last year following thorough due diligence processes, he said. "In other cases we remain in active discussions and our pipeline remains robust."

    In addition to acquisitions that fit well with the company, the spokesman said, Ansell remains focused on investing in its core businesses through continued investment in the transformation program, research and development, and manufacturing innovation and upgrades.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • Women in Tire & Rubber
      • ITEC
      • International Elastomer Show
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION