West to close US plant and downsize UK site

By Gareth Macdonald contact

- Last updated on GMT

Related tags: Economics

West Pharmaceutical Services will close a plant in Pennsylvania, US and sell part of a factory Cornwall in the UK to reorganise production operations ahead of impending contract expiries.

The firm said the move, which will cost 320 jobs across the sites and up to $21m (€16m) in charges, will "reduce manufacturing capacity devoted to product lines that no longer support sustainable, competitive operations​."

Company vice president Mike Anderson told in-pharmatechnologist that: “The current volume of business is not sufficient to cover the costs of maintaining operations at the Montgomery facility.

Efforts to replace lost business have been unsuccessful during this period of soft economic activity and reduced investment in new products from our customers.”

He went on to explain that a number of factors were involved, citing competitive market conditions as a key.

The availability of lower-priced products from other regions, including lower-cost sources of supply for customers, and lower- priced competition for their products, is certainly a factor that has impacted the industry at large and West specifically​.”

Anderson also discussed West’s plans for its St Austell facility, explaining that the move was in preparation for the expiry of a $10m-a year contract for the production of non-filled single-use syringes that is due to end in 2012.

He added that the UK plant, which will continue to make inhalation device components, is the subject of an “asset purchase and long-term supply agreement with [German contractor] Poschmann Union.”

Under the new supply agreement Poschmann will manufacture injection moulded plastic components for West’s internal needs, retaining 46 of the facility’s 200-strong workforce.

West expects the move to have a minor impact on its financials for 2010, predicting that earnings will be at the “lower end of the previously announced range of between $2.13 and $2.20 per share​.”

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