Meda cuts Recipharm contract: Swedish plant and jobs under threat
Recipharm’s facility in Strängnäs, Sweden, is producing a number of penicillin products for Meda but the contract development and manufacturing organisation (CDMO) announced today the contract, which accounts for 2% of total sales, has been terminated.
Meda will transfer the manufacture of these products offshore to other European CDMOs, a Meda spokesperson told this publication, with production set to end at Strängnäs by the end of December 2015.
Recipharm’s EVP of Corporate Development Mark Quick told Outsourcing-Pharma.com these pull-outs were not due to Swedish manufacturing costing more than in other economies.
“We see similar levels in Sweden to the rest of Western Europe and we continue to win new customers and volumes here. I think the requirement for a high level of service and/or complexity in the product or supply chain is a factor in these successes though.”
Currently 60 people work at Strängnäs and while Quick could not say how many employees will lose their jobs, the company confirmed there will be a reduction and the pull-out could lead to the closure of the facility.
CEO Thomas Eldered said: “I am disappointed that a long relationship will be terminated and in particular how it will affect a number of our Swedish employees, who have demonstrated their commitment and hard work to provide a high quality product and service to Meda."
“We have worked hard to explore opportunities to improve the business for both companies. Unfortunately our offers have been rejected and they have now decided to transfer this range of products to other manufacturers abroad.”
Meda has six contracts ongoing with Recipharm, and is one of the CDMO’s largest clients. The pharma firm has already served notice of termination at Recipharm’s Höganäs, Sweden, plant.
