BOOTS is to shed 200 jobs at its Nottingham factory, parent company Alliance Boots said today.
The health and beauty retailer employs 1,200 factory workers in Beeston making Boots products such as Soltan sun cream and its Boots No 7 cosmetic range.
Alex Gourlay, chief executive of Alliance Boots, Health and Beauty, said the company will reduce the 1,200 strong factory workforce by 15 per cent over the next two years.
It is to step up production of Boots own products and reduce production for third parties where demand is falling and is becoming unprofitable.
BCM, the contract manufacturing arm, has also seen an increase of regulatory compliance requirements.
Mr Gourlay said the investment will refocus the business on activities where it has a sustained competitive advantage, including its leading beauty and skincare product brands.
It will invest in new product technologies for Boots product development, as well as building a stronger factory for the future, he said.
"This will better position the business to seize growth opportunities generated by the further internationalisation of the group's product brands, including within the US market," Mr Gourlay added.
The one-off cost of this reorganisation will be just over £30 million.
Mr Gourlay said the company had invested £25m in th efactory over five years and a further £20m will be invested over the next two years.
The move will allow Boots to step up production of its own Boots ranges destined particularly for the US market.
Alliance Boots signed s strategic partnership with IS drugstore group Walgreens last year under which the US company will acquire it completely by 2015.
Boots products such as No7 will become available in Walgreens 8000 stores across the States.
The Boots factory, D10, manufactures 45 per cent for its own stores and 55 per cent for third parties, products such as toothpastes.
Mr Gourlay said the job losses were regrettable and staff would have an opportunity to redeploy, where possible.
He said the strategic approach was an important step in keeping manufacturing in Nottingham.
Mr Gourlay added: "By modernising and improving the efficiency of our Nottingham factory, we strengthen its position for the future and make it more suited to support the increasing global footprint of our product brands.
"It is an important step in our continued efforts to keep contract manufacturing in the UK, despite the ongoing challenges that the industry faces."
