Closed Nenagh Procter & Gamble plant part of firm that posted €11.6m profit

The cosmetics plant formerly owned by Procter & Gamble in Nenagh, which is to shut with the loss of 200 jobs, was part of the business that posted pre-tax profits of over €11.6m last year.

Procter & Gamble Manufacturing Ireland Ltd operated plants at Newbridge and Nenagh and its new owner, the giant beauty products firm Coty, last month announced the closure of the Nenagh plant following a study of its global manufacturing operations.

New accounts show that Procter & Gamble Manufacturing Ireland Ltd recorded pre-tax profits of over €11.6m last year. Revenues at the firm in the 12 months to the end of June increased from €96.77m to €97.9m.

However, the profits were 9% down on the €12.4m it posted in 2015.

The directors said the two plants had contrasting fortunes last year, with Newbridge growing and Nenagh contracting.

The Nenagh plant was the strategic hub for the business’s European Colour Cosmetics operation and was part of a €12.9bn deal under which Coty bought Procter & Gamble’s speciality beauty businesses last year.

The new accounts show that, prior to the acquisition, which was announced last October, the former owner paid a dividend of €42.2m to another Procter and Gamble company in September.

The €42.2m dividend paid last September by the firm to Procter and Gamble International Sarl was not paid out of profits but out of a €158m capital contribution made by Procter and Gamble firms to the company between 2001 and 2006.

The dividend payout came a number of days ahead of Procter and Gamble striking a deal with Coty. The Nenagh business was valued at €59m last September. The Procter & Gamble Manufacturing Ireland accounts were signed off on March 20.

Signalling the dangers that confronted the business, the directors in the accounts under “risks and uncertainties” state that the key risk then facing the firm in Ireland was the existence of lower cost manufacturing plants elsewhere.

“Those plants could also have “increasing technical capabilities”.

The directors’ report stated that the management continued to bid for additional business and was seeking opportunities to cut costs at both sites.

Staff numbers across the two manufacturing had fallen to 626 people from 606 in 2015. Staff costs had increased to €46.15m from €43.73m.

The directors also stated that initiatives had been taken at both sites to remain competitive. The Nenagh plant is to close by the end of next year.