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January 18, 2010

 

Lonza to close three plants, strengthens Asian operations

 

 

In response to the economic pressures of the past 18 months, Lonza will strengthen its Asian platform and close three plants in Europe and the US.

 

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 CHF60-80 million (US$58.4-US$78 million) over the next two years.

 

The closures would cost around CHF140 million (US$136.3 million), with the majority of that accounted for by write-off of capital assets.

 

The plants are located at Conshohocken, Philadelphia, US, Wokingham in the UK, and Shawinigan, Quebec, in Canada. The closure of the sites will affect 175 employees.

 

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

 

The pilot scale plant for the vitamin K3 activities in Shawinigan will cease its activities by the end of March 2010 after completing the full technical development of a new, proprietary, environmentally-friendly technology.

 

The offices and warehouse in Wokingham will be closed and the activities will be transferred to Verviers, Belgium. The Verviers facility already supplies European supplies and can readily handle orders from UK and Irish customers.

 

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 closure of the three sites will help optimise Lonza's global operational network and further increase competitiveness, according to CEO Stefan Borgas.

 

Headquartered in Basel, Switzerland, Lonza offers nutritional and health ingredients for the food and feed industries. Lonza is a world 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.

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