The world’s largest consumer products company, Procter & Gamble (P&G), has opened a fragrance manufacturing plant in Singapore as part of a global restructuring of its business to improve productivity.

P&G is to cut 15% of its senior staff and reorganise international operations to increase the productivity of its $76.4bn business. Although the firm is cutting overheads in some markets, its top-performing markets such as China and Russia will be allowed to increase overhead costs by half the rate of sales.

Advertisement

P&G’s chief executive Alan Lafley told the Financial Times that the firm’s international strategy is shifting to a “hub and spoke” approach to managing businesses in regions such as south-east Asia in place of the single-country business model that has led its global expansion.

The new 6500-square-metre perfume manufacturing facility, situated in Tuas, is P&G’s first facility in Singapore and the first perfume factory to be launched by

a multinational consumer goods company in the region.

The operation will become a development hub for P&G’s major brands such as Pantene, Head & Shoulders, Olay, Ariel, Tide and Downy, to Support the firm’s Asian market. The new facility will become a critical link in the firm’s global perfume network, according to P&G Asia group president Deb Henretta. She said: “Singapore was a natural choice for P&G’s first Asian perfume plant, given its focus on innovation, strong infrastructure and business-friendly environment.”

P&G operates existing perfume plants in the US, Germany and Mexico but by leveraging Singapore’s status as an innovation hub, the new fragrance plant will play a significant role in propelling P&G’s global business as the incubator for its perfumes worldwide, said Ms Henretta.

The multi-million-dollar Singapore plant, which was completed in seven months, is supported by a team of 40 perfumers that has produced more than 20 fragrances since the facility’s inauguration in December last year. At its current production level, the plant will supply more than three million kilograms of perfume annually for P&G brands manufactured across Asia.

Based on extensive benchmarking with industry partners, the state-of-the-art design of the plant enables highly productive, complex but low-cost production of perfumes.