Lonza to implement restructuring plans

Swiss speciality chemicals group Lonza announced yesterday that it was to restructure two business sectors, resulting in the loss of 225 jobs or 3 per cent of its 6,400 workforce.

Swiss speciality chemicals group Lonza announced yesterday that it was to restructure two business sectors, resulting in the loss of 225 jobs or 3 per cent of its 6,400 workforce, according to a Platts report.

A company statement said restructuring will yield a one-time exceptional pre-tax charge of approximately SF100 million (€62.3m) in 2002 of which around SF25 million will require cash funding.

The company said that restructuring would focus on its active ingredients for the pharmaceuticals division and exclusive chemical synthesis of intermediates business in the US and Switzerland in response to poor trading conditions in these two sectors.

Lonza noted that the competitive outsourcing environment of exclusive manufacturing by the life sciences industry has increased in intensity during the last two years resulting in production overcapacities.

The company said that expected cost savings will amount to SF40 million per year, allowing for a payback period of two and a half years. The company also noted that restructuring will "in no way change the business targets in its other business units."

It said current biotechnology expansion projects at Visp, Switzerland were progressing according to schedule and will not be affected by the shake-up.

According to the report, the company's production site at Los Angeles, US will bear the brunt of losses with 100 jobs set to be terminated when the synthesis activities close. Of the remaining sites affected by the restructuring, around 75 jobs will be lost at the company's plant at Visp, Switzerland while operations at Pennsylvania will lose approximately 50 staff.