Procter & Gamble’s Manufacturing Footprint to Shrink

The global manufacturing capacity of Cincinnati, OH-based Procter & Gamble (P&G) is “set to shrink to the smallest it has been in more than 20 years,” USA Today reported Wednesday. 17 of the companies factories have been shuttered or sold over the past half-decade. Coty, maker of cosmetics and perfumes, is taking over eight P&G plants next month.

As the company’s manufacturing footprint gets smaller in an attempt to reduce its costs by $10 billion over the next five years, USA Today said Procter & Gamble is shifting toward larger factories with more automation.

The closure of P&G facilities over the past five years is paired with the loss of over 10,000 jobs in its manufacturing network. The forthcoming plant closures and sales are expected to impact an additional 25,000 jobs, the paper said.

After executing changes to its manufacturing footprint in North America, the company said it plans on making similar changes to its manufacturing networks in Europe, Latin America, India, the Middle East and Africa.

While plans to close some P&G facilities move forward, the company is also constructing a new, $500 million manufacturing facility in West Virginia. The company said the plant will likely make products like Pantene shampoo and Olay products. The newspaper said that P&G is looking at developing facilities where a number of products for various business units can be produced in one facility.

“P&G is really looking to maximize their efficiency with significant up-front investments in factories, but that means the closure of less efficient plants in time,” Leon Loewenstine, chief investment strategist of Riverpoint Capital Management, told USA Today.

See the full list of plant closures here.