The Rexam group, which makes beverage cans, as well as packaging for food, healthcare and cosmetic products, has announced strong profit growth for the year ended 31 December 2011, with a 15% rise in underlying pre-tax profit. In this context of record profits driven by beverage cans, Rexam has confirmed its intention to divest its personal care business whose performance is deemed disappointing compared to other operations.
“Following a strategic review of our Personal Care business, the board recently decided that, given our focus on returns, it should be marketed actively for divestment in its entirety. We also believe that this will improve the range of projects in which we can invest in both Beverage Cans and Healthcare. So, while Personal Care is an attractive, well run business and given that we can generate better returns elsewhere in the Group, it is likely to be of greater value to another owner,” the company explained in a release.
Actually, Rexam intends to focus its investments in beverage cans, mostly in emerging markets, including Brazil and India. The company’s overall beverage cans business grew by 4% in 2011, and the underlying operating profit margin improved to 11.8% (compared to 10.7% in 2010).
In comparison, Rexam said the overall personal care trading was “disappointing despite pockets of good performance,” varying significantly by region. “In Europe volumes were flat. We saw some growth in dispensing systems for fragrances and make up and some weakness in foam pumps. In North America, the consumer remained cautious which led to lower volumes, particularly in Home and Personal Care. In emerging markets, good growth in Brazil was more than offset by weakness of make up in Asia due to high input costs and competitive pricing.”
The packaging maker said it has started the process to actively market its personal care business for divestment. However, the company plans to retain its healthcare unit.
