Dive Brief:
- GlaxoSmithKline announced Thursday it will close its skin care manufacturing plant in Sligo, Ireland by 2021, cutting 165 jobs. Manufacturing will ramp down over the next three years.
- The company cited lackluster demand for skin care products produced at the plant, below company expectations. GSK will continue to operate its other manufacturing sites in in Cork and Dungarvan and commercial operations in Dublin, however.
- The plant was previously on the chopping block, but plant executives made the case they could deliver on new products, and GSK kept the plant going with a fresh investment in 2012, The Irish Times reported.
Dive Insight:
The move marks the second plant closing revealed this month for GlaxoSmithKline, as it restructures its production and supply networks. GSK earlier said a manufacturing plant in Bangladesh would close and more than 1,000 jobs would be eliminated in the process.
The Irish plant in Sligo was opened in 1975 under Stiefel Laboratories, which GSK acquired in 2009. The manufacturing site currently makes 40 different formulations of skin healthcare products, including Physiogel, a body cream for sensitive skin, Oilatum, products for dry skin sold as a cream, soap and bath formula, and Driclor, an antiperspirant for excessive sweating in the underarm area, feet or hands.
The move comes after GSK announced in March that it would pay Novartis $13 billion to acquire the Swiss pharma's 36.5% stake in the two companies' joint consumer health care venture, which sells products such as the pain reliever Excedrin and the over-the-counter flu medicine Theraflu. The deal was part of GSK's effort to boost its consumer business operating margins to the mid-20s by 2022.
As it reevaluates its consumer health business after the Novartis purchase and seeks to maximize returns, GSK determined that the Sligo plant's skin care line would not be profitable enough without significant further investment, the company said in a statement.
GSK pledged to support the professionals laid off at the plant; some will also seek state support to pay their bills, according to The Irish Times.