Ansell launches "transformation" plan following business divestment

Sydney, Australia – Ansell Ltd is implementing a four-point transformation programme following the agreed divestment of its Sexual Health business in May.

The company said on 20 July that it will be making a cash investment of $70-100 million (€60-85 million) over the next three years, mainly on “business transformation”, with an additional $20-30 million in non-cash asset write-downs.

The Australian company said it’s objective was to increase growth through focus on core businesses selling to industrial and healthcare end markets, streamlined operations, and accelerated investment in manufacturing technology.

Some $40-50 million of the amount will be invested in a cost-reduction programme, which the company said would deliver pre-tax savings of more than $30 million annually by 2020.

Additionally, the company will invest in new manufacturing technology and capacity to support “top line expansion” following an encouraging 2017 momentum.

Ansell said in the financial year 2018, started 1 July, it will streamline its global business units to two, merging its Single Use and Medical units into a new Healthcare GBU that will manage all single use exam products, surgical and life science products and account for approximately $750 million in sales.

The Industrial unit will manage all mechanical and chemical hand and body protection solutions accounting for approximately $700 million in sales.

The simpler GBU structure, said Ansell, will help reduce distribution cost and improve service to customers

In terms of manufacturing operations, Ansell’s 13 plants will be linked to the streamlined GBUs with three sites part of Healthcare, nine sites part of Industrial, and the Sri Lanka site supporting both businesses.

Additionally, the company will be working on improving manufacturing optimisation within its Industrial unit, and also investing in automation and technology through to 2020 to add further capacity.

“We completed our fiscal year 2017 with good momentum in all businesses, achieving 3.5% organic growth for the full year and 6% in 2H in the ongoing business excluding Sexual Wellness,” explained Magnus Nicolin, CEO & managing director at Ansell, commenting on the changes.

The Sydney-based company agreed 25 May to sell Sexual Wellness business for $600 million to Humanwell Healthcare and CITIC Capital China Partners.

The company said it expects to complete the sale by September.