Essentra is set to enter a consultation with regard to its proposal to terminate the production of folding cartons at its IP5 facility located in Newport, UK.

As part of its strategic review, the company has identified healthcare and specific segments of the beauty industry to provide growth opportunities for its specialist secondary packaging solutions.

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Essentra chief executive Paul Forman said: “Specialist secondary packaging is strategically important for Essentra, given the size of the underlying market and our extensive product portfolio and expertise.

“However, if we are to rebuild solid foundations from which we can restore growth in our global health and personal care packaging business, it is imperative that we focus our capabilities on those activities which provide the most attractive, profitable opportunities in which we can add value to our customers.”

It is imperative that we focus our capabilities on those activities which provide the most attractive, profitable opportunities in which we can add value to our customers."

For the first six months of this year, IP5 reported an operating loss of £3.4m on a revenue of £6.1m, which caused the facility’s performance to deteriorate.

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Essentra noted that its senior management team evaluated multiple options for IP5, but the board argued that the proposal to close the IP5 facility was the most appropriate.

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If the proposal is confirmed, the production of folding cartons will be terminated by the end of this year.

The company now plans to conduct a formal consultation process to assess the options in detail.

Essentra also noted that it intends to provide support to IP5 employees who may lose their jobs if the facility closes.

The decision concerning IP5 is not expected to impact the company’s adjacent labels site in Newport (IP4), where production will continue.