Finnish plastic pipe manufacturer Uponor is ceasing operation in Asia as part of a strategy to focus on growth in Europe and North America.
In a 13 Dec stock exchange release, the company said the decision to move out of Asia was made as it was unable to establish a customer base for its “premium products” in a market primarily driven by low-cost offerings.
The withdrawal in 2019 will include shuttering the company’s production plant in China and sales offices in South Korea, Hong Kong and Malaysia. The company currently employs approximately 80 in the region.
Uponor’s operations in China began in 2010, initially as an export business offering indoor climate solutions projects. In 2016, the company opened its manufacturing facility in Taicang, near Shanghai, to produce plumbing solutions for growth markets throughout the region.
The Finnish pipe maker said that over the past eight years, the Asian operations had not met the set growth targets, and the business had not been profitable.
In 2017, the Asian operations net sales stood at €8.3m with a negative operating profit of €2.6m.
In the first nine months of 2018, net sales were at €6.9m but operating profit fell to -€2.8m. Uponor expect the ramp down to have a negative impact of €6m which will be reported in the Q4/2018 result as items affecting comparability (IAC).