Lonza Closes Sites in North America and UK

Lonza Group (Basel) plans to reinforce its presence in Asia, including its platform in Nansha, China, and close its Conshohocken (Riverside), Pennsylvania; Shawinigan, Canada; and Wokingham, United Kingdom, sites in 2010. These cost-reduction measures are part of Lonza’s response to economic pressures.

The site closures will affect 175 employees. After consulting with local employee representatives and authorities, Lonza created a comprehensive severance package and pledged to treat employees in a fair and transparent manner.

The Riverside plant will close in the fourth quarter of 2010. Lonza is working to ensure a continuous supply of drug substances to customers by transferring projects from Riverside to other operations within Lonza’s global network.

The pilot-scale plant in Shawinigan that manufactures vitamin K3 will cease production by the end of March 2010 after developing new, proprietary, environmentally friendly technology. Lonza is considering ways of providing customers with chromium-free vitamin K3 from other sites.

Lonza will close the offices and warehouse in Wokingham and will transfer its activities to Verviers, Belgium, in an effort to modernize and streamline its supply chain. The Verviers facility now supplies all countries in Europe, including customers in the UK and Ireland.

The company’s restructuring cost totals approximately CHF 140 million ($136 million), of which 75% represents restructuring activities in small molecules. The amount also includes impairments of assets and other restructuring activities and will be booked into 2009.

The restructuring follows Lonza’s October 2009 statement that it would reduce fixed costs by CHF 60–80 million ($58–78 million) over a period of 18–24 months and review its business units’ strategies. The company said it was taking these measures in response to the volatile market environment.

Lonza produces and supports small- and large-molecule active pharmaceutical ingredients for the pharmaceutical, healthcare, and life-science industries.