Eucerin and Nivea manufacturer stops producing in Chile due to loss of competitiveness

The decision of Unilever to stop producing detergents in the country, the closure of the Iansa plant in Los Angeles and – a little longer ago – the end of the manufacture of Maersk containers in San Antonio, and other information still resonate. it hits the national industry. This time, the German company Beiersdorf, manufacturer of products for brands such as Nivea and Eucerin, announced the end of its local production, which will put about 290 people out of work.

This is a measure that is taken despite the fact that the plant, located on Lo Espejo avenue, Maipú commune, was recently expanded, which involved a millionaire investment. The decision was made by the company’s board of directors in Germany, and considers the transfer of production in Chile to other plants. The volume of production in Chile will gradually decrease until reaching the total closure, which will take place in mid-2021.

But despite having bet on the national market, one of the objectives set at the beginning did not occur: to create a local industry to acquire raw materials in Chile. This, they say, forced them to import inputs, produce here and export again, which raised costs and, in the long run, made their operation uncompetitive.

“The decision has been extremely complex to make and was finalized after analyzing different possibilities to reverse the causes behind this transfer. However, it has been an unavoidable path, based on the competitive disadvantages of the local plant compared to others of the company, located in other countries and which are related to the availability of raw materials and the distance from the main markets for marketing of the products ”, the company informed yesterday through a statement.

Consulted sources close to the company, they assured that this has nothing to do with the political and economic situation in the country, neither with the social outbreak nor with the local effect of the pandemic; although they recognize that the health situation has generated complications for their global operation, but it is the same for all countries.

The company assured that during the closing process that will be completed in 2021, support measures will be established for workers, through an exit package with additional benefits to those required by law, which is already being informed to each worker .

“Likewise, accompaniment measures are considered to work on employability and enhance the possibilities of relocation of our collaborators”, it was added.

In addition to Nivea and Eucerin, Beiersdorf markets brands such as Hidrofrugal, Hansaplast, Tesa and La Prairie, all of which are dedicated to personal care.

The decision to leave the country comes despite the fact that sales in the domestic market are growing in double digits, as reported by the CFO of Beiersdorf, Dessi Temperley, in his release of results for the third quarter.

“Our businesses in Brazil and Chile had double-digit growth. Sales from Mexico were below last year’s level. But we are also seeing very positive signs of recovery in the third quarter. Moving on to the Africa, Asia and Australia region, there we saw a decrease in sales of 11.4% so far this year and a decrease of the middle single digits in the third quarter (…). We see significant drops in sales in India, Indonesia and Japan due to the sharp drop in demand caused by lockdowns and restrictions, ”said the executive.

Consulted in this regard, sources close to Beiersdorf Chile, indicated that the decision is due to the cost situation of the operation, not income, since what is produced in Chile is sold abroad.