Vienna – Semperit AG is carving out its Sempermed medical business unit in what it has described as the group’s “biggest strategic decision” in recent decades.
Amid competitive pressure, the medical unit, which manufactures latex gloves, will be separated “as a whole or in parts,” the Austrian rubber engineering group announced 28 Jan.
The unit, 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.
Over recent months, the segment faced “strong competitive environment and price pressure” prompting Semperit to launch a major restructuring programme to increase its profitability.
“We are faced with drastically intensified competitive dynamics in the medical sector; the capacity-based gap between us and the market leaders is growing,” said Dr Martin Füllenbach, CEO of Semperit AG.
According to Semperit, Sempermed competitors invest up to 20% of their annual revenue in capacity expansion and automation.
“This is why we are firmly convinced that our medical business can be better continued and developed by different owners,” the CEO added.
While moving away from the medical sector, the Austrian group said it would shift its focus onto its industrial segment, which includes the production of conveyor belts, construction materials and hoses.
“We have made the biggest strategic landmark decision of the past decades very deliberately…The future of Semperit is clearly in the industrial sector,” said Füllenbach.
Semperit has now prioritised selling the medical business unit and will start consultation with employee representatives “in a timely manner”, the CEO stated.
Semperit AG is also restructuring its industrial rubber products business to enhance the geographical reach and application-focus of the segment.
Under the Austrian group’s SemperGrowth200 plan, launched last August, the rejig will increase the industrial unit's segments from the existing three to four.
Sempertrans conveyor belt manufacturing, Semperform construction materials and Semperflex hose production are being joined by Semperseal seal production segment.
Each unit, said Semperit, will focus on developing non-European core markets, through production expansion and regional sales organisations, particularly in North America.
In addition, Semperit has created a ‘customer excellence centre’ to ‘identify and develop’ new growth regions, industries and applications.
Going forward, the group aims to improve “customer intimacy”, while increasing focus on applications, according to the group’s statement.
Another focus of the new industrial strategy will be on innovation and digitalisation, it added.
“Rubber as our material has to face the requirements of Industry 4.0 and deliver digital functionalities as well,” said Dr Martin Füllenbach, CEO of Semperit AG.
Through “organic growth and a clear M&A strategy”, Semperit said it expects to achieve “significantly higher” revenues by 2024, when it will mark its 200th birthday.