Not Much Uncertainty as Integra Closes Plants and Cuts Low Growth Lines

Integra LifeSciences Holdings Corporation, the company that aims to limit uncertainty, is certainly doing that as it says it has provisional plans to eliminate two of its manufacturing operations. At the same time the company has  announced that its ongoing product rationalization initiatives will result in the discontinuation a number of low growth, low margin products.

Background

Integra plans to close its manufacturing facility in Burlington, Massachusetts and is consulting with employee representatives to eliminate its manufacturing operations in Andover, England. The company says it currently expects these actions to be complete by the end of 2014.

Burlington operations will be consolidated into the Company’s facilities in Cincinnati, Ohio and York, Pennsylvania. The proposed changes in Andover, subject to the outcome of consultations, include consolidating electronics assembly into Integra’s facility in Ireland and discontinuing certain non-core product lines.

Speaking of which, the lines in question include several products and product lines in the U.S. Instruments segment that are low-margin and low-growth. Also included are a what the company refers to as a few small, non-strategic and/or low-margin product lines currently manufactured in both Burlington and Andover together with similarly categorised extremities and neurosurgery products. The stated hope is that this will simplify the product offering and reduce its complexity.

And while they’re at it, the company is identifying the revenues related to products within its Private Label business that are being substantially reduced or eliminated because Integra’s customers found other sources during the supply disruptions earlier this year.

The impact on the top line looks like it is a diminishing one in any event, revenues on the identified product slipping from $28m in 2011 to only $8m in the first half of this year.

Company comments

“I want to express my gratitude to our colleagues in Burlington and Andover, for whom we have the greatest respect, for their dedication and hard work over the years,” said Peter Arduini, Integra’s President and Chief Executive Officer. “Unfortunately, we believe these moves are necessary to remain competitive due to increased costs and regulatory requirements in the medical device market.”

“The simplification of our product portfolio enables our selling and operations teams to focus their efforts on our core product lines, which present the most value to our customers,” said Mr. Arduini.

Source: Integra Lifesciences Holdings Corporation

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