Freudenberg Performance Materials has ceased production at its Villa Zagala, Argentina facility amidst economic challenges in the region. Production of materials at the site, which is located near Buenos Aires, have been transferred to Freudenberg's plant in Jacarei, Brazil. The move impacts Freudenberg's hygiene business, where it is a niche player suppplying acquisition and distribution materials for diapers and feminine hygiene products.
“This decision was necessitated by the joint effects of market characteristics over recent years in combination with structural conditions in Argentina that have been unfavorable for this type of business,” executives say. “We continue to serve our clients in the usual way from a modern facility with a highly efficient production system as part of our strategy of asset consolidation. Other Freudenberg Group companies and the shoe and interlinings divisions belonging to Freudenberg Performance Materials have and will continue their operations as usual.”
The closure was not the first measure Freudenberg made to secure itself against difficult conditions in Argentina. In 2016, the company launched a major restructuring of its hygiene operations, making its facility there fully dedicated to the hygiene market. This effort was initially successful and executives said the initial turnaround in South America was a major contributor to profit growth in the division in 2016.
