VIENNA—In a move it's describing as its "biggest strategic decision" in recent decades, Semperit A.G. is looking to divest its medical business unit, Sempermed. Doing so, the Vienna-based company said, will allow it focus its resources on the production of conveyor belts, construction materials and hoses.
"We have made the biggest strategic landmark decision of the past decades very deliberately," CEO Martin Fuellenbach said in a statement. "The future of Semperit is clearly in the industry sector."
Fuellenbach noted in his comments that Semperit is facing intense competition and price pressures in the medical segment. Competitors, according to a Semperit news release, are investing as much as 20 percent of their annual revenue in capacity expansions and automation, a pace that is difficult to match.
"Despite our clear improvement of the operating performance indicators at Sempermed from the second quarter of 2019 on, we are faced with drastically intensified competitive dynamics in the medical sector; the capacity-based gap between us and the market leaders is growing," Fuellenbach said. "This is why we are firmly convinced that our medical business can be better continued and developed by different owners."
Sale of Semperit's medical segment, which includes latex gloves, could be done in whole or in part. It also would affect the Sempermed production sites as well as Semperit's facility in Wimpassing, Austria, which produces surgical gloves in addition to serving the Semperform and Semperflex segments.
"Our main site in Wimpassing will unquestionably remain a part of the Semperit Group," said Fuellenbach, who added that domestic production will remain a priority for Semperit. "Against the backdrop of a slowdown of the global economy, we are currently working on a site concept."
Fuellenbach also said Semperit will be working with those employees affected by any sales agreement,
Sempermed, originally set up as a joint venture business with Sri Trang, was demerged in early 2017, following a series of legal disputes with the former Thai partner.
Within the last two years, Semperit has launched a major restructuring program to increase its profitability.