Shield Corporation Limited (SCL), a Pakistani manufacturer of baby care and hygiene products, has decided to discontinue producing diapers, while continuing operations in its other lines of business, according to a listing notice sent to the Pakistan Stock Exchange.
“The Board of Directors (BoD) has made the decision to discontinue the production of diapers while continuing other lines of business,” read the notice. The action, which was taken after a comprehensive review of operational and financial performance, market dynamics and future outlook of the product, is expected to be taken by June 15 or earlier.
Through the action, Shield will "explore and execute disposal of diaper machines and other assets related to production of diapers and carry out necessary enabling tasks." The discontinuation is limited to the diaper product, and the company will continue to support its other business areas, including manufacturing of its other baby care products such as baby feeder, baby nipple, soother, teethers and training cups.
SCL was incorporated in Pakistan as a public limited company in 1975. Its principal business activity is the manufacturing, trading, and sale of oral hygiene and baby care products. SCL caters to the needs of over 300 towns and cities in Pakistan and has a presence in Europe, Asia, and Africa.
In its most recent financial reports, the company sait sales had decreased 27.40%, due mainly to increased competition, pricing adjustments taken by the company and reduced purchasing power. Gross profit in value terms also decreased. To improve the financial performance thecompany has curtailed costs, resulting in reduction in selling and distribution expense by 31%. Future actions, the company said would include but not be limited to certain adjustments and realignment in pricing strategy of certain products, costs curtailing, etc., to improve the financial performance of the company.
Shield entered the disposable diaper category in 2014.
