Smith & Nephew closes U.S. facility, sells another in U.K. with 100+ to be laid off

Smith & Nephew ($SNN) is on a consolidation drive when it comes to wound care. Last week it announced the layoff of 108 employees due to the closure of its St. Petersburg, FL, operations, saying the advanced wound care business would be better off if it operated in a single location in Fort Worth, Texas. This week it sold its Gilberdyke, England, factory, saying it would manufacture polyurethane films for its wound dressings from nearby Kingston upon Hull facility instead.

The sale of the factory to Alpharetta, GA-based manufacturer SWM for an undisclosed amount affects 91 workers, according to the Hull Daily Mail, though the company declined to discuss how many would be transferred to the Hull facility, or if there would be any layoffs. The Gilberdyke plant also produces plastic foams and nets, which Smith & Nephew considers noncore assets.

"Our predominant need for the site was for our internal supplies and we couldn't really invest, or weren't willing to invest, in a third-party bulk net business," said the company's senior vice president of global operations Noel Waters in the Hull Daily Mail. "What we realized over many years of reviewing our manufacturing strategy was the noncore business would be better-served by being purchased by another company. We will bring the polyurethane assets and the people who work with those to the Hull site."

SWM said in a statement that its newly acquired business produces an annual revenue of about $16 million. It expects the transaction to close by year-end. The products will be integrated into the SWM's DelStar Technologies unit, a maker of thermoplastic nets, nonwovens, laminates, and extruded components for healthcare and other applications.

SWM CEO Frédéric Villoutreix

"Gilberdyke represents a highly complementary asset to DelStar's existing medical business, which is largely focused on the finger bandage category. The manufacturing capabilities and customer relationships we will acquire through this transaction will elevate our presence and product depth in the attractive healthcare industry, and accelerate growth of SWM's Filtration segment," SWM CEO Frédéric Villoutreix said in a statement.

As is often the case in manufacturing, both the St. Petersburg and Hull facilities have an interesting back-story involving China. In 2007, Smith & Nephew moved the St. Petersburg facility's manufacturing operations to China, but kept the wound division's sales and administrative offices in the city, though they won't be there much longer. The layoffs will occur by Jan. 9 of next year, reports the Tampa Bay Times.

Meanwhile, in July, Smith & Nephew announced that it is transferring up to 140 jobs from Hull to China. But it simultaneously announced an investment of £9 million ($14.1 million) in the English facility, and said the site will focus on innovation. The Hull plant remains part of the company's plans, as evidenced by its absorption of the Gilberdyke plant's capacity.

The wound care and orthopedics company has been subject to the speculation that it will be bought over amid a bout of med tech merger mania, as well as constant rumors that its French CEO, Olivier Bohuon, will jump ship to French pharma giant Sanofi ($SNY).

- read the article in the Hull Daily Mail | another one about the outsourcing to China
- read the story in the Tampa Bay Times
- read the statement from SWM

Suggested Articles

Akoya Biosciences raised $50 million to help boost its commercialization in research, drug development and clinical testing markets.

The dream of a comfortable, tabletop blood testing device, needing only a few drops taken from a finger and a handful of minutes, has now arrived.

Novartis is now teaming up with Amazon’s mammoth cloud computing division to overhaul its manufacturing, supply and business operations.