P&G is unlikely to disclose where its axe will fall in the UK until autumn, although it is fair to assume the combined business will not need two HQs and two separate sales and marketing functions.
As for factories, production at Gillette’s Reading toiletries plant could move elsewhere in P&G’s network, while the razors plant in Isleworth was already earmarked for closure with production switching to a cheaper site in Poland, said analysts.
The future of Gillette’s third UK site - a Duracell hearing aid batteries plant in Wrexham - was more secure, they predicted.
P&G, which has its UK HQ in Weybridge, has four main plants in the UK and Ireland - a paper plant in Manchester, a haircare and fragrance site
in Northumberland, a laundry, haircare and detergents site in West Thurrock and a skincare and cosmetics plant in Co Tipperary. It also has technical centres in Newcastle and Egham.
However, the biggest opportunities to cut costs and drive growth would be overseas, said Investec analyst David Lang. “Savings are made on a global scale through cutting overheads in marketing and admin, and in driving growth in emerging markets, where one company will be able to use the other’s infrastructure to boost distribution.”
While brands such as Duracell and Pringles arguably sat outside P&G’s core stable, it would be in no rush to divest them while they continued to generate cash, he said. More interesting was the impact on the rest of the market. “The middle ground in branded manufacturing is disappearing - it’s polarising between very big and very small, and all eyes are now on Unilever.”
Unilever’s dual management structure is expected to be streamlined when it publishes full-year results on February 10, but the real issue was its innovation pipeline, claimed Panmure Gordon analyst Justin Scarborough. “Something like half of Gillette’s and Reckitt Benckiser’s sales over the last five years were generated by new products. Ask Unilever what its percentage is.”
In terms of mergers and acquisitions activity, a tie-up between Colgate-Palmolive and Reckitt Benckiser would make sense, he added.
As for factories, production at Gillette’s Reading toiletries plant could move elsewhere in P&G’s network, while the razors plant in Isleworth was already earmarked for closure with production switching to a cheaper site in Poland, said analysts.
The future of Gillette’s third UK site - a Duracell hearing aid batteries plant in Wrexham - was more secure, they predicted.
P&G, which has its UK HQ in Weybridge, has four main plants in the UK and Ireland - a paper plant in Manchester, a haircare and fragrance site
in Northumberland, a laundry, haircare and detergents site in West Thurrock and a skincare and cosmetics plant in Co Tipperary. It also has technical centres in Newcastle and Egham.
However, the biggest opportunities to cut costs and drive growth would be overseas, said Investec analyst David Lang. “Savings are made on a global scale through cutting overheads in marketing and admin, and in driving growth in emerging markets, where one company will be able to use the other’s infrastructure to boost distribution.”
While brands such as Duracell and Pringles arguably sat outside P&G’s core stable, it would be in no rush to divest them while they continued to generate cash, he said. More interesting was the impact on the rest of the market. “The middle ground in branded manufacturing is disappearing - it’s polarising between very big and very small, and all eyes are now on Unilever.”
Unilever’s dual management structure is expected to be streamlined when it publishes full-year results on February 10, but the real issue was its innovation pipeline, claimed Panmure Gordon analyst Justin Scarborough. “Something like half of Gillette’s and Reckitt Benckiser’s sales over the last five years were generated by new products. Ask Unilever what its percentage is.”
In terms of mergers and acquisitions activity, a tie-up between Colgate-Palmolive and Reckitt Benckiser would make sense, he added.
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