Nestlé Skin Health will cease operations at its Egerkingen factory in canton Solothurn and move manufacturing activities abroad, threatening 190 positions.
“Production volumes in Egerkingen are and have been very low, resulting in underutilisation of assets and hence additional pressure on manufacturing cost,” the company, which creates skin, hair and nail products, said in a statement on Thursday.
It did not foresee a significant volume increase over the next years in Egerkingen, “even taking into account growth forecasts for markets served by the factory”.
Nestlé Skin Healthexternal link said it intended to transfer manufacturing activities from the Egerkingen site to its other manufacturing facilities across the world and move its Swiss sales office and the consumer business unit to other locations in Switzerland. The transfer will happen in several waves over the next 12 to 18 months.
The trend of Swiss manufacturers moving jobs to countries with cheaper labour costs has generated heated debate. The strengthening of the franc against the euro and US dollar has shrunk margins at Swiss factories and made their exports more expensive for foreign buyers.
A survey of Swiss firmsexternal link by manufacturing lobby group Swissmem and the University of St Gallen earlier this year found that nearly half planned to move at least part of their production to low-cost countries in future.
“The main reason for this is to reduce production costs. Apart from product and process innovation, this is the only way in which businesses can increase their profitability in Switzerland,” Swissmem said in February.
The survey also predicted a decrease in manufacturing jobs and an increase in research and development activities in Switzerland. Some 12,600 manufacturing jobs have been lost in Switzerland in the past two years, according to Swissmem.
swissinfo.ch and agencies/ts