Lonza moves production to Asia

17-01-2010 | Home | News

Swiss chemical manufacturer Lonza will close three of its plants in Europe and the US by the end of the year as it is moving its main production towards Asia.

The closures are the latest in a series of measures announced by Lonza last October after a slump in profits caused by cancelled and postponed contracts.

The aim is to cut 5% of its workforce and reduce costs by CHF 60 to 80 million ($59m-$79m) over the next two years.

In a statement, Lonza said the closures would cost around CHF 140 million ($137m), with the majority of that accounted for by write-off of capital assets.

Move to China

The three plants that will become redundant are at Wokingham in the UK, Conshohocken in Philadelphia, USA, and a Canadian facility in Shawinigan, Quebec, which collectively employ 175 staff.

Lonza has been steadily shifting its production towards Asia, and specifically a recently expanded large-scale API facility in Nansha, China, which is expected to take over some of the workload from the closed plants.

The Riverside plant in Conshohocken will cease operations in the fourth quarter of 2010.

The offices and warehousing facilities in Wokingham will be transferred to Lonza’s similar site in Verviers, Belgium. Verviers will now handle orders from the UK and Ireland in addition to the remainder of Europe.

The Shawinigan, Quebec facility specialises in the manufacture of vitamin K3. The pilot-scale facility will continue to operate until March, and Lonza is still considering whether to transfer the technology to another site.

Lonza offers nutritional and health ingredients for the food and feed industries as well as custom manufacturing and development services using advanced microbial fermentation.

Lonza is the world’s leading producer of Niacin/Niacinamide (Vitamin B₃) and operates three Niacin/Niacinamide plants in Europe and Asia. Vitamin B₃ is an essential part of human and animal nutrition.