West Pharma cuts staff as profits are pressured
pharmafile | December 13, 2010 | News story | Manufacturing and Production | West Pharma, drug delivery systems, job cuts, pharma packaging, pharmaceutical manufacturing, plastic packaging
West Pharmaceutical Services has taken the axe to its manufacturing facilities in the US and UK in order to cut costs, trimming around 5% of its 6,400-strong workforce.
Hardest hit will be West Pharma’s facility in Montgomery, Pennsylvania, which manufactures moulded plastic components and assemblies for consumer products and is set to close in 2011 with the loss of 170 jobs.
Meanwhile, the company’s facility at St. Austell in Cornwall, UK, will be downsized by around 150 staff over the next two years, with much of its workload transferred to other plants in Europe.
“West is expecting a significant portion of the plant’s disposable medical device components manufacturing to cease when a customer contract expires late in 2012,” said the company in a statement.
The Cornwall facility produces moulded elastomeric components for disposable medical devices, as well as elastomeric and plastic components used in pharmaceutical packaging.
One production line for a particular packaging component will remain at the plant, and West Pharma says it is also negotiating a deal with another company that could see this capacity change hands and continue to operate on an outsourced basis.
Upon completion of that transaction, the buyer would continue to employ 46 current West employees at the site, it said. Meanwhile, around 50 operational and administrative jobs will also be cut at the company.
“The plans announced today will reduce the manufacturing capacity devoted to product lines that no longer support sustainable, competitive operations,” commented Donald Morel, West Pharma’s chief executive.
The company, whose main business lies in components for injectable drug delivery systems and plastic packaging, said it hopes to bring in around $1.1 billion in revenues during 2010, with a 3-5% increase expected in 2011. However, it now believes profits will come in at the lower end of its earlier forecasts, at around $2.13 earnings per share.
The costs associated with downsizing the company’s manufacturing network and making staff redundant will be $18-21 million, it said, while savings will be around $12 million a year from 2013.
Phil Taylor
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