US packaging group Berry Global (Evansville, Indiana; www.berryglobal.com) has announced that it is considering “strategic alternatives” for its Health, Hygiene and Specialties (HH&S) division, as recently stated by outgoing CEO Tom Salmon.

The segment with nonwovens and speciality films had sales of USD 3.17 bn (EUR 2.96 bn) in the previous business year and accounted for almost 22% of the group’s total sales.

Berry outlines several future scenarios for HH&S, including a sale, a strategic partnership or a joint venture. Whether a decision will actually be made in this direction is usually not clear at this early stage. In view of the group’s recent cost-cutting efforts, however, the probability is high. The key factor in all three cases will be the price a competitor or investor is willing to pay. The board around CEO Kevin Kwilinski, who is to succeed Salmon in October, has hired Citigroup Global Markets and Wells Fargo Securities as financial advisors. 

Related: Berry Global plans to close 15 production sites

The HH&S division – one of a total of four in the globally positioned packaging group, with 265 production sites – had to contend with declining sales volumes in the fading pandemic phase; infection protection products and filter products made of nonwovens were no longer in very high demand. While sales for the full year 2021/22 (30 September) were still close to the previous year’s level, the division’s adjusted EBITDA fell 28% to USD 420 mn. The operating result dropped 43% to USD 230 mn.

A German location is also being affected by the currently uncertain future – Fiberweb Berlin produces 6,000 t/y of nonwovens with 80 employees for the pharmaceutical and automotive industries, among others.

Whether or how the now-initiated future scenarios of the division overlap with the plant closures announced a few weeks ago could not be determined by press time. In the course of the announced cost-cutting measures, 20 production sites worldwide are to be closed.