BD Medical to Shut Down 60-Year-Old Drogheda Plant and Cut 200 Jobs Amid Strategic Restructuring
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Yesterday (July 3), according to The Irish Times, BD Medical will close its Drogheda plant and lay off 200 employees.
BD Medical spokesperson stated that this decision was made after a review of the global supply chain, and the plant closure plan is expected to be completed by the end of 2026.
Going back to the early 1960s, BD Medical initially set its sights on Ireland, leading to the establishment of the Drogheda plant.
As the oldest of the four major sites of BD Medical Ireland, the Drogheda plant has celebrated its 60th anniversary.
Source: BD Medical Official Website
In terms of functions, the plant mainly provides support for BD's largest business segment—healthcare, specifically covering areas from diabetes care to drug delivery solutions.
It is reported that this manufacturing-focused factory, which has more than 35 molds for the production of pen needles, pen needle safety devices, and components of PosiFlush, has always been a leader in product batch control and continuity.
In view of the importance of its functions, BD has made several large-scale investments in this old factory over the past few years.
According to the statement, nearly $160 million (approximately RMB945 millionYuan).
In 2021, BD also announced an investment of 62 million euros (approximately RMB480 million), to expand the production of PosiFlush syringes.
The announcement of factory closures and layoffs caused a great uproar locally.
Labour MP Ged Nash said the news was devastating for workers, andDrogheda Area"It's also 'a huge blow'."
"Drogheda is the largest town in Ireland. It is now set to lose its only major manufacturing company supported by the IDA," he said.
In fact, before this plant closure, this old factory had already laid off 60 people in July last year.
At that time, the company stated that this layoff "does not reflect the performance of the plant," which has "met BD's operational expectations," but is part of the company’s effort to "adjust the scale of its manufacturing operations based on today’s realities."
Coincidentally, in August last year, BD Medical also acquired another company with a 57-year history, HoldREGE FactoryNeedle and Syringe Production LineTransfer to existing plants in Canaan, Connecticut, and cut100 NamesEmployee.
So, why does BD keep cutting jobs at the old factories despite decent performance?
This requires starting with a recent business divestiture case.
BD's diabetes care business was officially spun off in 2022 to establish a separate subsidiary, named embecta.
It is reported that BD's diabetes business dates back 100 years to 1924, making it one of the world’s leading producers of diabetes injection devices, having introduced the world's first dedicated insulin syringe.
However, over the years, this long-standing business has gradually shown signs of fatigue.
It is reported that during the fiscal years 18-20, BD's consolidated compound annual growth rate was 3.5%, whileDiabetes Care BusinessOverallA decrease of 1.0% year-on-year.
Years of sluggishness have weighed down overall growth, and for both parties, the spin-off is an attempt to add value.
Although the business split has been completed,Some plants with diabetes care businesses are still in transition., the two factories that have successively laid off employees this time are among them.
It is worth mentioning that, apart from being affected by the company's business spin-offs, the dramatic change in market demand is another significant factor influencing BD's strategic adjustment.
BD Spokesperson Affirms Critical Role of Holdrege and Drogheda Plants During COVID-19 Pandemic Amid Dual Layoff Announcements
It is reported that BD's Holdrege plant produced millions of doses of vaccines at the time to protect Americans from the coronavirus, and the company even temporarily suspended the production of some other products to meet the surging demand at that time.
However, as supply chain issues ease and the COVID-19 pandemic gradually becomes a thing of the past, BD will inevitably adjust its factory operations under the new changes.
In fact, as the global economic cycle progresses, some companies have long anticipated potential crises in recent years and have thus launched "cost reduction plans."
BD Medical is one of them.
In the company's released 2025 Strategy ("BD 2025 Strategy"), "Simplification" is clearly listed as one of the key pillars, and it explicitly states to "Reduce the complexity of the entire manufacturing network and rationalize the product portfolio”。
Source: BD Medical Official Website, 2023 Annual Report
This closure and layoff also takes this aspect into consideration. The Drogheda plant has historically supported the diabetes business, and labor costs in Ireland have been increasing year by year. Retaining this "vestige of an era" after the spin-off would do more harm than good to the company’s new objectives.
Notably, in the 2023 annual report, BD also showed strong performance.
Revenue for the 2023 fiscal year was $19.4 billion (approximately RMB 141 billion), representing a reported growth of 2.7% and a currency-neutral growth of 4.5%.
BD Chairman, CEO and President Tom Polen said, "With the outstanding execution of our BD2025 strategy and differentiated medical technology portfolio by our team, we have achieved another strong quarter and year. These technologies are improving healthcare efficiency and enhancing the lives of patients worldwide."
Looking ahead, we will continue to execute our category leadership strategy in high-growth markets, advance our robust innovation pipeline, and implement simplification initiatives, all of which position us for sustained growth in fiscal year 2024 and beyond."
As he said, BD Medical has been undergoing constant changes. In addition to spinning off its diabetes business as an independent entity, it has also successively announced major moves such as divestitures and acquisitions.
On June 20, 2023, BD Medical announced that it had signed a definitive agreement to acquire for $540 million (approximately RMB3.87 billionYuan) to sell it at the price ofSurgical Instrument PlatformSold to STERIS, a global top 100 medical device company.
It was reported that BD divested its surgical instruments, laparoscopic instruments, and sterilization containers.Product Line.
These include products from the V. Mueller™, Snowden-Pencer™, and Genesis™ brands, as well as the divestiture of three BD manufacturing facilities located in St. Louis, Missouri, Cleveland, Ohio, and Tuttlingen, Germany.Factory。
And there are approximately 360 supporters of the platformEmployeeWill be transferred to STERIS upon completion of the transaction.
BD Says Divesting Surgical Business Aims to Implement "Simplify" Plan in 2025 Strategy; Proceeds from the Sale Will Be Allocated to the Company’s Core Businesses.
It is worth mentioning that while "simplification" is important in the BD2025 strategy, the need for "growth" comes before "simplification," with details including the explanation of "supplementing internal growth through strategic acquisitions."
Moreover, cost-saving methods are not limited to selling off businesses; reasonable mergers and acquisitions are also indispensable tools for companies to reduce costs and increase efficiency.
BD Medical stated that "differentiated technology," "attractive base market growth," "digital and connected devices/solutions," and "medication management" are key criteria for its acquisitions.
Just last month (June 3, 2024), BD Medical officially announced that it will$4.2 billion (approximately30.4 billionRMB)Cash Acquisition of Edwards Lifesciences' Critical Care Division by a Cardiovascular Giant.
Source: BD Medical Official Website
Upon completion of the transaction, Critical Care will operate as an independent business unit within BD's Medical segment.
In terms of transaction amount，This is the second-largest M&A deal in the medical device sector this year after Johnson & Johnson's acquisition of Shockwave, and also BD's another large-scale expansion since its $24 billion acquisition of Bard Medical in 2017.
Strategically speaking，BD Officially States That This Move Aims to Expand Medical Monitoring Solutions and Establish BD as a Leader in This Field.
Undoubtedly, this will be another resource reallocation that shakes up the competitive landscape of the niche market.
For acquisitions, BD has always spared no effort. According to the company's official website, in the past 10 years, BD Medical has carried out more than 30 acquisitions, and in 2021 alone, it acquired six companies/product lines.
Through continuous adjustments of addition and subtraction, BD Medical's competitiveness has increased year by year, and its total assets have multiplied several times over.
In the recently announced Medtech Insight's latest global top 100 medical device companies ranking, BD has moved up from 7th place to 5th place, demonstrating the effectiveness of its strategic adjustments.(Extended Reading:Change at the Top! Global Medical Device Top 100 Rankings See Major Upheaval, Mindray and United Imaging Achieve Significant Breakthroughs.）
However, it should also be noted that "old rivals" on the same list of top 10 medical device companies, such as Medtronic, Johnson & Johnson, and Siemens, are also continuously restructuring. "Cost reduction and efficiency enhancement" has become the new normal in the industry.
In the turbulent sea of medical devices, with towering waves ahead and surging ones behind, it is both a necessary move and a response to the situation to assess the circumstances and optimize oneself.
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