LIG's plant closures to cost 1,000 British jobs: Durex maker's net assets to vanish

LONDON International Group yesterday spelled out the human and financial cost of its profits slump, when it revealed that half of the 2,000 redundancies announced in December would be made in the UK at a cost of around pounds 19m.

The condoms and film processing group, which has debts of at least pounds 154m, also admitted that its current restructuring, which includes the disposal of its troubled photoprocessing arm as well as the closure of a number of manufacturing plants, would virtually wipe out its pounds 112m of net assets.

It acknowledged this would mean it would need a refinancing, but said that the timing, and whether it would involve a rights issue, would not be decided until the outcome of its attempts to sell its non-core businesses was known.

But Nick Hodges, chief executive, insisted the company was not in breach of its loan covenants and had the support of its bankers.

The UK redundancies stem from the closure of two plants - Chingford, with the loss of 600 jobs, and Llanelli, where there will be 240 redundancies.

A further 60 jobs will be lost at the group's health and beauty aids plant at Dundee and around 100 will go at the London head office. But the company gave no sign of where the 1,000 job losses would bite in its plants worldwide.

The closures mean that none of LIG's condoms, including the Durex brand - it has a 75 per cent market share here - will be manufactured in the UK.

Mr Hodges said condoms sold in the UK would now come from the group's Italian and Spanish plants, where investment in automation made production costs much lower.

Many of LIG's problems are traceable to its ColourCare photoprocessing business, which processes film for companies such as Boots, but which has been badly hit by the recession and competition.

This year photoprocessing is expected to lose around pounds 15m, wiping out trading profits from condoms, gloves and health care.

Mr Hodges declined to be drawn on whether progress had yet been made on a sale of the photoprocessing arm, but he promised a statement in June to coincide with the the release of the full-year results to March.

The photoprocessing businesses shows no signs of improving. However, the company indicated a substantial pick-up in operating profits from the healthcare business in the second half, but these were still 'considerably reduced' compared with the same period in the previous year.

Some non-core activities and brands have been sold. A contract has been signed with the Pfizer subsidiary, Unicliffe, for the sale of the UK cough medicines Buttercup, Galloway's and Liquafruta for around pounds 11m. The assets had a net book value of pounds 500,000 and made annual profits of pounds 700,000.

The company is also in talks on the sale of other over-the-counter brands such as Wright's soap, Eucryl toothpowder and Goddard's embrocation oil.

It is pinning its hopes in future on its core businesses of condoms and surgical and household gloves, and says the world branded condom market, in which it has a 22 per cent share, is continuing to grow at 2 to 3 per cent a year.

The company said that Michael Moore, chairman of Tomkins, would take over as chairman from Alan Woltz, who is retiring. The shares fell 8p to 121p.

View from City Road, page 28

News
The Banksy image in Folkestone before it was vandalised
people
Life and Style
tech

Sales of the tablet are set to fall again, say analysts

News
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister
news

Met Police confirm that there was a 'minor disturbance'

Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

PROMOTED VIDEO
Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
News
i100
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
News
ebooksAn unforgettable anthology of contemporary reportage
Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
News
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)
news

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style
gaming

I Am Bread could actually be a challenging and nuanced title

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Salisbury ranked seventh in world’s best tourist cities

The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album