West Pharmaceutical Services to consolidate operations

Plans to close Pennsylvania plant and downsize UK operations

US-based West Pharmaceutical Services is to consolidate selected operations to improve operating efficiencies. The company, which manufactures components and systems for injectable drug delivery, expects to close its manufacturing facility in Montgomery, Pennsylvania, and to downsize operations at its facility in St Austell, UK.

The move is expected to result in savings of approximately US$6m in 2011, with the expected full annual savings of approximately $12m to be realised beginning in 2013.

The closure of the Pennsylvania operation will result in approximately 170 job losses, beginning in January 2011 and continuing into the third quarter of 2011. Activity at the plant will wind down as production is transferred to other facilities, predominantly in the US. The Pennsylvania plant has been engaged primarily in contract manufacturing of moulded plastic components and assemblies for consumer-product applications.

In Cornwall, West is expecting a significant portion of the plant's disposable medical device components manufacturing to cease when a customer contract expires late in 2012. Anticipating this business drop-off, West will transfer the remaining production to its other plants in Europe, resulting in the elimination of 150 full-time positions at the Cornwall location over the next two years.

The facility produces moulded elastomeric components for disposable medical devices, as well as elastomeric and plastic components used in pharmaceutical packaging and will continue to fulfil customer requirements under existing contracts during the period. Production of a line of unique pharmaceutical packaging will remain in Cornwall, supported by production and administrative personnel.

In addition, West is negotiating a transaction under which a third party would acquire a portion of that facility and supply West's internal needs for certain plastic pharmaceutical packaging components. Upon completion of that transaction, the acquirer would continue to employ 46 current West employees at the site.

The ancillary restructuring of administrative, engineering and other operating positions will result in the net reduction of approximately 50 positions at other locations and will be accomplished through attrition and early retirement wherever possible.

‘The plans will reduce the manufacturing capacity devoted to product lines that no longer support sustainable, competitive operations, and will unfortunately result in the loss of a number of jobs over time,’ said Dr Donald E. Morel, chairman and ceo. ‘These are difficult decisions that fall most heavily on our employees in these locations, and we will be providing support that should ease the burden placed on them.’

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