L'Oreal lets go of costly Welsh factory

By Guy Montague-Jones

- Last updated on GMT

Related tags United kingdom

L’Oreal plans to cut 200 jobs at a Welsh factory, blaming unsustainable logistical costs associated with higher overseas sales and a decline in the UK supplier base.

The factory at Talbot Green was used by L’Oreal to produce shampoos, conditioners and styling products for the European market.

Too far from market

But the company now intends to sell the manufacturing operations to France-based Fareva because the site is too far from both consumers and suppliers.

More than two-thirds of current production is exported and L’Oreal has gradually reduced the use of UK suppliers in recent years.

L’Oreal said the UK supplier base had declined so the company now imports 70 per cent of its raw materials and components from overseas.

These factors make the logistical cost of the Welsh factory no longer tenable especially in the context of high fuel prices and sustainability targets.

Setting up in the UK

Fareva nonetheless took an interest in the facilities because the company currently has no UK manufacturing base and is looking to increase sales in the country.

Subject to appropriate consultation, ownership of the Welsh plant will transfer to the pharmaceutical and cosmetic company in the middle of next year.

Most of the jobs at the factory will be lost but L’Oréal and Fareva plans to sign a sub-contract agreement for shampoo and conditioner production in order to preserve some of the jobs at the factory.

In the long run, Fareva has expressed interest in rebuilding the site over the next few years so that it returns to current levels of activity and employment.

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