New York City-based flavors and fragrances major, International Flavors & Fragrances Inc. (IFF - Analyst Report) recently announced plans to shut down the Augusta, Georgia based Fragrances Ingredients manufacturing facility, by July 2014.
The Fragrances Ingredients facility forms a part of the company’s Fragrances Business Unit. In the fourth quarter of 2012, this sub-segment grew approximately 6.0%, year over year, on a constant currency basis. The closure of the facility is a strategic move taken by the company in order to implement its cost reduction measures more effectively, which was a major driver to the increased segmental margins in the last reported quarter.
The fragrance ingredients are used by the company to manufacture perfumes for its own brand as well as by its competitors. Approximately 55% of the ingredients produced by the company are consumed internally and the balance is sold to third-party customers.
IFF has neither assessed the financial impact of the decision nor has it made public its plans with respect to the workforce employed in the facility. We expect the company to provide more details regarding the planned shut down in its next conference call when it reports its first quarter 2013 results tomorrow, i.e. May 7, before market opens. The current Zacks Consensus Estimate for the stock stands at $1.13 per share, with an expected year-over-year growth rate of 13.2%.
International Flavors & Fragrances currently has a Zacks Rank #3 (Hold). Other stocks to watch out for in the industry are Avon Products Inc. (AVP - Analyst Report), Methanex Corp. (MEOH - Analyst Report) and Nu Skin Enterprises Inc. (NUS - Snapshot Report); each bears a Zacks Rank #2 (Buy).