Merck KGaA picks winners and losers as it streamlines EU production network, cutting 200 jobs

LSNE lyophilization vials
Merck KGaA is reworking its filling and distribution capabilities in Western Europe in a process that will see four sites share €90 million in investments while four others will be closed and 200 positions lost.

Germany’s Merck KGaA is investing more than $100 million in manufacturing as it streamlines its European production under a plan that also will result in the loss of four plants and 200 jobs.

The drugmaker said (PDF) Wednesday that it will spend €90 million ($102 million) on four sites in Germany, Switzerland and France, but will close sites in Steinheim, Eppelheim, Hohenbrunn and Berlin, all in Germany. Beginning in 2019, it will move operations from those sites to other facilities, a process that is slated to be complete in 2022. The company said there will be a net loss of about 200 jobs.  

The company said it will consolidate the manual filling and distribution of its nonregulated laboratory chemicals and reagents from sites in Darmstadt, Steinheim and Hohenbrunn in Germany, and Buchs, Switzerland, into a central distribution center in Schnelldorf, Germany.

“Centralizing filling of small quantities and their distribution will continue to increase our speed and responsiveness to customer requests. This is something that the acquired Sigma-Aldrich excelled in and we see positive impacts of this effort already in North America,” Udit Batra, CEO of Merck’s Life Science business, said in a statement.  

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The company will invest the €90 million to build manual filling capabilities and to boost capacity in Schnelldorf. It will also build capabilities at the Darmstadt and Buchs sites, as well at its Molsheim, France site. A filling site in Hamburg, Germany, will operate unchanged.

Merck noted that the streamlining of its manufacturing network has been an ongoing process and that it has consolidated operations from 18 plants since 2010. With the 2015 buyout of Sigma-Aldrich, it said it now has 65 production facilities and 130 distribution centers globally. It also pointed out that it has continued to invest in new facilities and upgrades in the U.S., China, Ireland and other sites around the world.

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“By continuously optimizing our site network, our company can better serve our customers and focus investments that develop capacity and capability most effectively and efficiently across our manufacturing and distribution operations,” Christos Ross, executive VP of integrated supply chain operations for Life Sciences, said in a statement.