Merck names manufacturing and R&D sites slated for closure
pharmafile | July 12, 2010 | News story | Manufacturing and Production, Research and Development | Merck, job cuts, manufacturing, research and development
Merck & Co has taken an axe to its network of manufacturing and R&D sites around the world, closing down 16 facilities and cutting more than 16,000 jobs in a bid to cut costs by around $3.5 billion a year from 2012 onwards.
The cutbacks are pretty much in line with what Merck had previously said would ensue following its $41 billion merger with Schering-Plough in November 2009, with a reduction of around 15% in its global workforce.
The company said the restructuring plans announced to date would already bring savings of $2.7 billion to $3.1 billion in 2012, with the remainder coming from ongoing cost-trimming exercises.
The costs of implementing the programme will be hefty in the short-term, however, with estimates placing them between $3.5 billion and $4.3 billion, some of which will be booked in its second-quarter accounts.
In a statement, the company’s chief executive Richard Clark said: “these changes are crucial to drive future growth and realise the promise of being a global health care leader for the long term.”
Among the facilities earmarked for closure are eight R&D units, including its centre in Cambridge, Massachusetts, which focuses on developing cancer drugs. The others include one unit in Canada (Montreal), three in the Netherlands (Boxmeer, Oss and Schaijk), one in Norway (Odense), another in Germany (Waltrop) and Newhouse in Scotland.
That leaves Merck with 16 R&D locations worldwide focusing on seven key therapeutic areas, namely cardiovascular, diabetes and obesity; infectious diseases, oncology, neuroscience and ophthalmology, respiratory and immunology, and women’s health and endocrine, which is being transferred from Oss to the US.
Another eight plants in Merck’s manufacturing network will be shut down or sold, a move which along with closures announced earlier will reduce the number of production facilities to 77 from 91.
Those that will be shut down are in Italy (Comazzo), Portugal (Cacem), Mexico (Azcapotzalco and Coyoacan) and Brazil (Santo Amaro), while the company is hopeful it may find buyers for its Mirador facility in Argentina and Miami Lakes in the US.
The restructuring also affects its operations in Singapore, where chemical manufacturing will be phased out of a Merck site and transferred to a unit formerly operated by Schering-Plough.
There were some nuggets of good news for the manufacturing division workers, however, as Merck also announced investment programmes at plants in Mexico (Xochimilco) and Brazil (Campinas) that will help drive its presence in the merging Latin American pharmaceutical market.
Phil Taylor
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