Beiersdorf announces imminent end to supply chain organisation programme

By Louise Prance

- Last updated on GMT

Related tags Beiersdorf Investment Sales

Following the recent sale of its Hirtler soap factory to an
independent buyer, Beiersdorf has stated this week that it will
sell its logistics centre in Hamburg in a bid to bring the
realignment of its supply chain organisation programme to an end
ahead of schedule.

The company has been applying many cost saving strategies over the last year as part if its aim to underline its position as the worldwide skin care leader, with the sale of the logistics centre said to be the last in a long run of sales.

Beiersdorf announced the restructuring programme in 2005 and has since begun cost cutting with the intended sales of many manufacturing facilities in Sweden, Belgium and the Netherlands, moves that have led to job losses.

However, despite the cost saving measures that have taken place, the company stated that all staff affected in the imminent sale of the Hamburg site will keep their jobs, as conditions have been set ensuring any new operator must ensure all 148 employees at the facility retain their roles.

A decision was made by the company to sell against the 'background of the high technological standards offered by professional distributors, which Beiersdorf could not have met on its own'.

Additionally Beiersdorf stated that the new investors would be able to achieve 'optimum capacity utilization at lower costs by leveraging substantial synergy effects'.

Spokesperson for the Logistics Initiative Hamburg, Dr. Peer Witten, stated, " The logistics sector is booming, with growth of up to 10 percent in recent years.

Up to 14.000 new jobs in this segment in Hamburg are expected by 2015".

The latest development follows news that Budelpack International, one of Europe's leading contract manufacturers and packers of fast moving consumer goods, last week signed an agreement to acquire the company's Hirtler soap factory.

Budelpack International said that they intend to 'profit from the opportunity to manufacture products for other suppliers', allowing the Hirtler factory to achieve further growth.

The sale helped the company to end the realignment of its supply chain organisation (procurement/production/distribution) in Germany sooner than expected, with Beiersdorf continuing to sell soaps made by Hirtler under the Budelpack International umbrella.

Beiersdorf suggested that the savings made from the programme would be channeled into investments of the company's core brands, particularly in developing markets.

Its ultimate aim being to achieve a 5.5 per cent slice of the global market for personal care products by the year 2010, with growth particularly focusing on the markets of China, India, Brazil and Eastern Europe.

Indeed, it seems the latest moves have helped Beiersdorf significantly, reflected in recent financial results that showed the company's overall operating earnings rose to €590 million in 2006, an 11 per cent increase for the result in 2005, with group sales up 7.2 per cent to a record €5.1 billion from €4.7 billion last year.

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