Essity Contemplating US Production Shift Amid Tariff Threats
Essity Evaluates Potential Production Shift to the U.S.
By Agata Rybska
In light of recent tariff discussions, Essity, the renowned Swedish hygiene product and tissue manufacturer, is contemplating increasing its production capacity in the U.S. Currently, a significant portion of their manufacturing occurs in Mexico and Canada. If these tariffs are implemented, CEO Magnus Groth has indicated that this could prompt a migration of more production to the United States. However, he emphasized that there are no plans for plant closures at their existing facilities.
Current Manufacturing Distribution
Essity generates approximately 14% of its sales from the U.S. market, with about 10% of the products available domestically being imported, primarily from neighboring countries like Mexico and Canada. During his recent interview, Groth reaffirmed the company's commitment to exploring options to expand local production capabilities as needed. This flexibility hints at a proactive approach to potential changes in trade policy.
Local Impact of Increased U.S. Production
Despite considering a more localized production strategy, Groth assured stakeholders that the plants in Canada and Mexico would remain operational and serve local demands. Specifically, Essity operates a tissue manufacturing plant in Drummondville, Canada, along with five facilities in Mexico located in cities such as Ecatepec, Monterrey, and Reynosa. These establishments are crucial for Essity's ability to meet not only U.S. needs but also the demands of local markets abroad.
Essity's U.S. Footprint
In addition to its international operations, Essity has eight production facilities situated within the United States. These plants focus on similar business sectors as those in Mexico, producing a diverse range of products, including tissue, personal care, and medical solutions. It is noteworthy that Essity employs around 3,200 individuals across its U.S. operations, contributing significantly to the local economy.
Workforce Distribution
Essity maintains a robust workforce of 404 employees in Canada, with 3,800 personnel in Mexico, and 3,200 in the United States. This diverse employment landscape illustrates Essity's dedication to being a leading player in the hygiene and tissue production sector across North America.
Frequently Asked Questions
Why is Essity considering moving production to the U.S.?
Essity is exploring a potential production increase in the U.S. due to possible tariff introductions that could affect their operations in Mexico and Canada.
What is Essity's current sales distribution in the U.S.?
Essity generates approximately 14% of its total sales from the U.S., with a portion of its products imported mainly from Mexico and Canada.
Are there plans to close any plants in Canada or Mexico?
No, CEO Magnus Groth has stated that there are no current plans for plant closures in either Canada or Mexico.
How many facilities does Essity have in the U.S.?
Essity operates eight production facilities in the United States, focusing on the same business areas as its Mexican plants.
What types of products does Essity produce?
Essity produces a variety of hygiene and tissue products, particularly in the markets of personal care and medical solutions.
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