Procter & Gamble Co. will build a giant manufacturing plant in Berkeley County, W.Va., as part of a previously announced supply chain overhaul.
The Cincinnati-based consumer products titan announced Feb. 10 that it would spend about $500 million on a facility with a footprint exceeding 1 million square feet due to open in 2017.
“This new plant will leverage economies of scale and standardized manufacturing platforms to P&G's advantage by allowing us to produce multiple brands at one strategic location,” noted P&G global product supply officer Yannis Skoufalos in a news release.
The new plant, in the Tabler Station Business Park south of Martinsburg, W.Va., will be integrated into its distribution network of large facilities in Ohio, Pennsylvania and Georgia, enabling one-day transit or less to some 80 percent of customers in the eastern half of the United States. P&G now runs 29 plants in the United States but it wants to move to fewer, more diverse plants.
A P&G spokesman declined to comment on whether packaging or plastic goods will be made in the pending West Virginia operation. He also wouldn't disclose which brands P&G will make there.
P&G's revamp of its supply chain and distribution network dovetails with the company's strategy of gradually eliminating more than half its brands. It has begun shedding 90 to 100 underperforming businesses, which will leave it with 60 to 70 high margin, leading brands.
In October P&G Chairman, President and CEO A.G. Lafley told analysts he saw no reason to delay the portfolio paring program, which could take as much as two years.
“We don't want to spend $1 billion on redoing the supply chain for the wrong businesses,” Lafley explained.
The supply chain upgrade could mean changes in packaging and its suppliers. P&G also has sustainability and productivity drives under way to reduce material costs, which could impact its packaging strategies.
P&G's launch of an injection molding technology subsidiary, Imflux Inc., could also influence its future approach to packaging. P&G has not commented publicly on what the subsidiary's main focus will be but Imflux's recruitment drive sought mold engineers and personnel who will interact with customers at customers' plants.
Influx is based in the Cincinnati suburb of Hamilton, Ohio.
Although P&G is shedding its weakest businesses, it hasn't shut the door on new opportunities. Officials said in a conference call last November that P&G might build on its premium branded razors by getting into disposable razors. Major brand names in that market typically rely on injection-molded plastic bodies.