Food giant Nestle has put a €472.4m cost on its decision to shut down its Wyeth Nutritionals infant formula plant in Askeaton in west Limerick.
In October of last year, Nestle announced its decision to close the Wyeth Nutritionals production plant and R&D centre down on a phased basis between March 2025 and March 2026 with the loss of 542 jobs.
The plant produces infant formula for the greater China region and at the time Nestle stated that "external trends" had impacted demand for infant nutrition products across China and surrounding territories.
The company said that "the number of new-born babies in China has declined sharply from some 18 million per year in 2016 to fewer than 9 million projected for 2023".
Now, new accounts for Wyeth Nutritionals Ireland Ltd for 2023 show that the company recorded a pre-tax loss of €460.3m last year.
The loss arose from the company incurring an exceptional cost of €472.4m "due to the announcement of the closure. This includes both restructuring and impairment costs".
The accounts put an impairment charge of €263m on the company's tangible assets made up of a €136.12m impairment on plant and machinery and €127.84m on "freehold land and building".
The directors state that in a phased closure, R&D activities are to cease in March 2025 and all manufacturing continuing until closure in March 2026.
They state that "a consultation period with all union and employee groupings was undertaken and alignment achieved with all parties by April 2024".
They state that "following cessation of manufacturing, the management have indicated their intentions to liquidate the company in a timely manner post closure".
Revenues last year at Wyeth Nutritionals Ireland Ltd increased by €16.39m from €225.6m to €242m.
The directors however point out that overall volumes at the plant last year decreased by 10% on 2022 "representing a total decrease in volume output of 21% since 2021".
Underlining the economic contribution the plant makes to the midwest, staff costs at the company last year totalled €64.03m which was down on the €68.52m in staff costs for 2022. Staff numbers reduced by one to 489.
The pre-tax loss of €460.33m also takes account of non-cash depreciation costs of €22.85m. The company sustained a post tax loss of €444.7m after recording a corporation tax credit of €15.6m.
The write down in value of tangible assets from €307.8m to zero resulted in the company having a shareholders' deficit of €209.96m at the end of last year.
Reporting by Gordon Deegan
