Nestlé has quantified the financial impact of its decision to close its Wyeth Nutritionals infant formula plant in Askeaton, County Limerick, placing the cost at €472.4 million. The phased closure, set to occur between March 2025 and March 2026, will result in 542 job losses and marks a significant economic blow to Ireland’s mid-west region and its dairy sector.
The Askeaton facility, which produces infant formula primarily for the Chinese market, is supplied annually by approximately 50 million gallons of milk from local farmers. However, declining birth rates in China, Nestlé’s largest market for infant formula, have sharply reduced demand. Births in China have fallen from 18 million in 2016 to an estimated nine million in 2023.
Financial Impact
Recently published accounts for Wyeth Nutritionals Ireland Ltd. reveal a pre-tax loss of €460.3 million for 2023, attributed largely to exceptional closure-related costs of €472.4 million. These costs include €263 million in impairment charges, with €136.1 million allocated to plant and machinery and €127.8 million to freehold land and buildings.
The directors stated that research and development operations at the site will cease in March 2025, with manufacturing continuing until the plant’s full closure in March 2026. A consultation process with employees and unions concluded successfully in April 2024, and plans are in place to liquidate the company after operations end.
Operational and Economic Impacts
Despite the closure announcement, Wyeth Nutritionals Ireland Ltd. reported a modest revenue increase of €16.4 million last year, rising to €242 million. However, production volumes fell by 10% year-on-year, contributing to an overall 21% decline in output since 2021.
The plant’s closure underscores its economic significance to the region. Staff costs totaled €64 million in 2023, a decrease from €68.5 million in 2022, reflecting a slight reduction in workforce to 489 employees.
The company’s financial position has deteriorated significantly, with a shareholders’ deficit of €209.96 million recorded at the end of 2023 following a full write-down of tangible assets valued at €307.8 million.
Strategic Shift
Nestlé cited “external trends” for its decision to shutter the facility, emphasizing the long-term decline in Chinese birth rates as a key factor. The closure aligns with broader market adjustments in response to shifting global demand for infant nutrition products.
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