Lonza marks three plants for closure
pharmafile | January 14, 2010 | News story | Manufacturing and Production |Â Â Lonza, facilitiesÂ
Swiss chemical manufacturer Lonza will close three of its plants in Europe and the US by the end of the year as the centre of gravity for its production continues to shift towards Asia.
The move is the latest in a series of measures announced by Lonza last October after a slump in profits caused by cancelled and postponed contracts. The aim is to cut 5% of its workforce and reduce costs by CHF 60 to 80 million ($59m-$79m) over the next two years.
The three plants facing the chop are at Wokingham in the UK, Conshohocken in Philadelphia, USA, and a Canadian facility in Shawinigan, Quebec, which collectively employ 175 staff.
Lonza has been steadily shifting its production towards Asia, and specifically a recently expanded large-scale API facility in Nansha, China, which is expected to take over some of the workload from the closed plants.
The Riverside plant in Conshohocken manufactures chemical intermediates and small-molecule active pharmaceutical ingredients (APIs) and accounts for the lion’s share of the job losses, with staffing estimated at more than 100 workers. It will cease operations in the fourth quarter of 2010.
Wokingham consists of offices and warehousing facilities, and Lonza says its activities will be transferred to Lonza’s similar site in Verviers, Belgium. Verviers will now handle orders from the UK and Ireland in addition to the remainder of Europe.
The Shawinigan facility specialises in the manufacture of vitamin K3 and has been working on a greener chromium-free process for making the ingredient, which is used in nutritional applications such as animal feed. The pilot-scale facility will continue to operate until March, and Lonza is still considering whether to transfer the technology to another site.
“The re-engineering project is a key element in our endeavour to bring Lonza back to a sustainable growth,” said Lonza chief executive Stefan Borgas.
In a statement, Lonza said the closures would cost around CHF 140 million ($137m), with the majority of that accounted for by write-off of capital assets.
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