Cosmetics packaging success relies on US consumer confidence: Rexam

By Katie Bird

- Last updated on GMT

Related tags Personal care Health care Rexam

Packaging supplier Rexam has said that success in the coming year for its personal care division will rely very much on consumer confidence and discretionary spend in the US.

The UK-headquartered company has suffered in 2009 and has been forced to cut costs leading to a number of site closures and business restructuring.

Sales for the year in the company’s plastics packaging division (which includes healthcare, personal care and closures) came in at ₤1.24bn (€1.41bn), a decrease of 3 per cent when compared to last year’s figures and 7 per cent excluding the impact of acquisitions, disposals and currency effects.

Personal care volume sales down

Personal care and closures were the sectors that really dragged results down and healthcare stood up relatively well throughout the year, the company said.

Initially volume drops were down to customer destocking, Rexam said, but subsequently, lower consumer demand was to blame for a decrease in sales volume.

According to the company, during the second half of 2009 sales began to recover particularly due to increased demand for lotion products, some new product launches and the H1N1 outbreak leading to increased demand for foam pumps.

“Trading conditions were difficult throughout 2009. However, we produced a strong cash performance, our cost reduction programme is ahead of plan and we delivered record efficiencies,” ​said CEO Graham Chipchase.

Back in May, Rexam announced a reorganisation of the plastics division which it estimated will cost an exceptional charge of ₤45m, with the aim of saving ₤30m a year from 2010.

The closure or consolidation of seven plants is marked in the plan, and 2 out of the 7 have now been closed, involving 1,100 redundancies.

Looking to 2010 Chipchase said that although the market was likely to remain challenging the company would start reaping the benefits from the cost saving measures.

“Overall we expect our performances to improve in 2010,”​ he added.

Sales for the company as a whole, including its beverage can division, came to ₤4.87bn for the year with an operating profit of ₤446m.

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