Today, Unilever has announced that it is undertaking a review of the future of its washing powder factory in Warrington, where Persil and Surf laundry powder detergents are manufactured.
Over recent years, there has been a sustained and irreversible decline in demand for washing powder, as consumers increasingly switch to other types of laundry product, particularly liquids and laundry capsules. As a result of this decline, a review of the future of the Warrington factory is now necessary, a potential outcome of which could be the closure of the site. Unilever appreciates that this is difficult and unsettling news for the 123 employees at Warrington and will support them through this review.
Consumer demand for washing powder has been steadily declining for many years as consumers buy more laundry liquids and capsules. In the last four years market volumes have fallen by 15%. This trend is set to continue, with demand for washing powders expected to decline by a further 10% every year for the next few years. As a direct result of this structural shift in the market, the Warrington factory is now running at less than half its capacity. This has a significant impact on the site’s competitiveness.
Unilever has made considerable efforts to address the site’s challenges in recent years, from investing in new product innovations, to offering product promotions in an attempt to drive consumer demand, to reducing costs and improving efficiency. However, these efforts have not been enough to offset the sustained shift in consumer behaviour taking place.
Unilever will now work with trade union representatives and employee representatives on a focussed review of the future of the site. During the review, we will share more detail on the options for the site that we have evaluated so far. We will also evaluate any commercially sustainable options not yet considered. However, we believe it will be challenging to find a commercially sustainable alternative to the closure of this factory.
While we are committed to conducting a thorough review, we do not want to extend this period of uncertainty for our employees for longer than necessary, so are planning a review of around four weeks.
Jon Strachan, Vice President, Supply Chain, Unilever said:
“As a result of a sustained and irreversible decline in consumer demand for washing power, our Warrington factory is currently running at less than half its capacity. Despite considerable efforts by Unilever to address the site’s challenges, a review of the future of the site is unfortunately now necessary.
“This decision has not been taken lightly. Whatever the outcome, the review is likely to require difficult decisions. We understand this will cause considerable concern for our Warrington employees, suppliers and the local community and that the outcome may have significant implications for them. We are committed to treating our employees fairly throughout and providing support during this period of uncertainty."
Unilever remains committed to manufacturing and R&D in the UK. In recent years, Unilever has invested more than £200m in its North West operations. This has included investments in Port Sunlight in laundry capsules and liquids production, and building a new personal care factory at that site to manufacture products such as Lynx body wash, Tresemmé and Alberto Balsam shampoos and conditioners.
In addition, in partnership with government bodies and academic groups, Unilever has invested in the Materials Innovation Factory at the University of Liverpool and established world class Advanced Manufacturing capability within Research & Development Port Sunlight.
The Unilever Warrington factory is situated on a site shared with another company, PQ Corporation that produces catalysts, specialty materials and chemicals. This announcement affects Unilever only.
Notes to editors:
Washing powder relates specifically to the powder detergent format. Unilever’s laundry gel capsules and liquid detergents are manufactured in its Port Sunlight factory which is not impacted by this review announcement.