FMCG restructuring: 17 closed plants in 3 years and 2,500 layoffs

In the past three years, 15 plants have been shut down in the consumer goods industry, which include six this year, with companies such as Nestlé, Coca-Cola, Colgate-Palmolive, Friesland and Bunge taking action. In this period, producers laid off over 2,500 employees, with cost efficiency as the most frequently cited reason. Some companies choose to concentrate their businesses in a single production centre, others keep certain units domestically and move part of production to neighbouring countries, while others prefer being present domestically only through imports. The last solution was chosen by Kraft US producer, which has recently shut down the only production capacity it held domestically. This has certainly been the plant closedown with the biggest impact in FMCG in 2008, with 440 people to be laid off. “(…) The relocation decision is exclusively made at multinationals’ headquarters and goes beyond the issues related to subsidiaries’ performances,” says Viorel Ghete, managing partner with BPI Romania, assisting companies undergoing restructuring. “The impact of these closedowns is particularly felt at a local level. Involved personnel has skills specific to the industry and a quite high average age,” Ghete adds.