Lonza Streamlines its Operations in Chemical Manufacturing
• Next step of strategic move of small molecules production
towards Asia
• Closure of Riverside, Shawinigan and Wokingham sites, 175
employees affected
• Network optimization results in higher value for
customers
• Total restructuring cost of approximately CHF 140 million
booked into 2009, 70% of charges are non-cash
Basel, Switzerland, 12 January 2010 – End of October 2009
Lonza Group Ltd announced its intention to adjust the organization
to the more volatile market environment, to reduce fixed cost in
the range of CHF 60-80 million in the next 18-24 months and to
review the detailed business unit strategies.
The economic pressures of the past 18 months have clearly
accelerated the cost reduction efforts of the pharmaceutical
industry. In response to that Lonza is strengthening its platform
in Asia and will close the sites of Conshohocken (Riverside), PA
(USA), Shawinigan (CDN) and Wokingham (UK) in 2010. This step
complements Lonza’s existing platform in Nansha (CN) and is
the response to customer needs for mature regulated products at
competitive conditions in a new market segment for Lonza.
The closure of the sites will affect 175 employees. Lonza has put
in place a comprehensive severance package in consultation with
local employee representatives and authorities. Lonza is committed
to treat all employees in a fair and transparent manner. The total
restructuring cost amount to approximately CHF 140 million of which
75% account to restructuring activities in small molecules. The
amount also includes impairments of assets and other restructuring
activities and will be booked into 2009, 70% of the charges are
non-cash.
The Riverside plant will cease its activities in Q4 2010. Lonza is
in contact with all Riverside customers to offer tailored solutions
that will strengthen the supply security of their individual drug
substances by transferring the projects into other operations
within Lonza’s global network.
The pilot scale plant for the vitamin K3 activities in Shawinigan
will cease its activities by the end of March 2010 after having
completed the full technical development of this new, proprietary,
environmentally friendly technology. Lonza will evaluate further
opportunities to provide its customers with chromium-free vitamin
K3 from another site in the future.
As part of a modernisation and streamlining initiative within the
Lonza Bioscience supply chain, the offices and warehouse in
Wokingham (UK) will be closed and the activities will be
transferred to Verviers, Belgium. The Verviers facility already
supplies all other countries in Europe and can readily handle
orders from UK and Irish customers, while maintaining an equivalent
level of service to that enjoyed by customers today.
“The closure of the three sites will help to optimize our
global operational network and further increase the competitiveness
for our customers. The re-engineering project is a key element in
our endeavour to bring Lonza back to a sustainable growth”,
comments Lonza CEO Stefan Borgas. “We will continue to drive
this project throughout the year and we will see many initiatives
rising from it. We are confident that we are on the right track and
that the identified measures support the Lonza
strategy.”
The operational EBIT for 2009 before special charges for these
restructuring cost is fully on track and will be, as announced in
Q3 2009, well within the range of CHF 360-380 million.
About Lonza
Lonza is one of the world's leading suppliers to the
pharmaceutical, healthcare and life science industries. Its
products and services span its customers’ needs from research
to final product manufacture. Lonza is the global leader in the
production and support of active pharmaceutical ingredients both
chemically as well as biotechnologically. Biopharmaceuticals are
one of the key growth drivers of the pharmaceutical and
biotechnology industries. Lonza has strong capabilities in large
and small molecules, peptides, amino acids and niche bioproducts
which play an important role in the development of novel medicines
and healthcare products. Lonza is a leader in cell-based research,
endotoxin detection and cell therapy manufacturing. Lonza is also a
leading provider of value chemical and biotech ingredients to the
nutrition, hygiene, preservation, agro and personal care
markets.
Lonza is headquartered in Basel, Switzerland and is listed on the
SIX Swiss Exchange. In 2008, Lonza had sales of CHF 2.937 billion.
Further information can be found at www.lonza.com.
For further Information
Lonza Group Ltd
Head Corporate Communications
Michael Frizberg
Tel +41 61 316 8624
Fax +41 61 316 9624
michael.frizberg@lonza.com
Lonza Group Ltd
Media Relations
Dominik Werner
Tel +41 61 316 8798
Fax +41 61 316 9798
dominik.werner@lonza.com
Lonza Group Ltd
Investor Relations
Dirk Oehlers
Tel +41 61 316 8540
Fax +41 61 316 9540
dirk.oehlers@lonza.com
Posted: January 2010
