Akzo's Diosynth plant proves a hard sell
have to close its Diosynth manufacturing plant in Scotland by the
end of the year since it cannot divest it, as the unit's lack of
competitiveness in the production of fine chemicals and
pharmaceutical starting materials appears insurmountable.
In 2004 the company responded to falling sales with jobs cuts and restructuring which failed to solve the basic problems of overcapacity in the Buckhaven site.
Although the factory has been up for sale since May 2005, no buyer has stepped forward, indicating a lack of demand for the plant's manufacturing services in both chemical and biological active pharmaceutical ingredients (APIs).
"Despite our very best efforts to find a new owner, it is now accepted that a buyer is unlikely to be found," said John Ivinson, managing director of Diosynth.
"Over the last months a number of interested parties have visited the site and entered into discussions with local senior management but regrettably no offer to acquire the business has resulted."
There are a number of contracts in place that will see production continue for a number of months until the plant closes at the end of the year, the company said.
"Difficult trading conditions continue to affect sales," Ivinson added.
"We have a magnificent workforce and a strong reputation with our customers so it is a sad time for everyone associated with the business at Buckhaven."
Redundancies are not expected until the end of the year when 85 jobs will be lost.
Akzo stresses the priority now is to manage a safe end to production and to consult with the employees.
The Dutch company acquired the plant in 1998 as part of the acquisition of Courtaulds.
In December 2002 the firm was on the verge of increasing its capacity in Scotland with an agreement to acquire GlaxoSmithKline's API plant in Montrose yet the company backed out of the deal in March of 2003, citing "changed economic circumstances in the pharmaceutical sector."
