RICHMOND, Va.—Ansell Ltd. will close three production facilities, two located in Juarez, Mexico, and one in Janggye, South Korea.
The closings come as part of Ansell's transformation program, first put into action in July 2017. The plan is on track to realize a targeted $30 million in cost savings by fiscal year 2020, according to an Ansell news release.
The two Juarez facilities manufactured medical gloves, according to a Mexico Now article.
Production will cease at all three sites, with the exception of some medical products, which will continue to be produced in Juarez. Ansell will consolidate manufacturing activities into its leading facilities in Vietnam, Sri Lanka, Malaysia and Thailand, the company said.
The transformation program focuses on four main objectives for the company: A simplified, lower cost organizational structure, an increased focus on global supply chain, increased investment against Ansell's growth strategy and enhanced returns on capital through its manufacturing base. Ansell said the decision to close the facilities primarily was about achieving the fourth objective.
Over the past two years, Ansell has reviewed its global manufacturing footprint, and benchmarked all facilities against long-term requirements for cost, quality and process capability. The company will invest significantly in its Vietnam, Sri Lanka and Malaysia facilities, with other investments expected.
In the plan launched in 2017, Ansell would make cash investments over a three-year period between $70-$100 million, with an additional $20-$30 million in non-cash asset write-downs, according to a prior news release. About $40-$50 million of that total would enable the company's cost reduction plan, and the balance would go to new manufacturing technology and capacity.
Prior to rolling out the transformation plan, Ansell had agreed to divest its sexual wellness business in May 2017, which closed later that year.