Lonza to carve-out and trim down Specialty Ingredients business

By Ben Hargreaves

- Last updated on GMT

(Image: Getty/CarlosAndreSantos)
(Image: Getty/CarlosAndreSantos)

Related tags Lonza LSI

Lonza announces that its Specialty Ingredients business will operate independently by ‘mid-2020’ and will cut away approximately 130 roles at the same time.

Lonza’s Specialty Ingredients (LSI) business will include its Consumer Health (excluding its Nutrition section), Agro Ingredients, and Coatings and Composites divisions.

The company announced it would proceed with the carve-out today but noted that the separation process has already begun and is expected to complete by mid-year 2020.

LSI will operate under independent management, though Lonza will retain full ownership.

Lonza CEO, Marc Funk, commented, “This is an important moment for our business and the LSI segment. Our decision will allow the segment to focus on its strengths and drive future growth in a dynamic and competitive environment.”

In full-year 2018 results, LSI saw its core EBITDA drop by 5.4% compared to 2017. In total, the division managed sales of CHF 2.3bn (€2.06bn), representing 3.4% growth over the previous year.

A spokesperson for Lonza told us that the carve-out was taken as a part of its ‘portfolio review’ process.

“In that way, we can strengthen our strategic focus on microbial-control solutions and provide transparency on the operational and administrative cost structure of LSI, so the leadership is able to make a thorough assessment of the business,”​ the spokesperson outlined.

LSI will also carry out a redundancy plan ahead of the completed carve-out, which will see approximately 130 roles removed – this will involve around 50 roles cut away in Switzerland, where the company is headquartered, and 35 roles in the US, with the other areas of job losses not specified.

The spokesperson stated the decision was taken to “improve the business efficiency of LSI and certain support functions.”

It is expected that the redundancies will be mostly completed by the end of this month, with employees to be offered internal transfers and early retirements.

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