Lonza CEO will adjust 'manufacturing footprint'

Lonza, the API and chemical giant, has been struggling to reduce manufacturing costs, particularly at its massive plant in Visp, Switzerland, where it has slashed 400 jobs. But CEO Richard Ridinger says more restructuring is in the cards.

Lonza CEO Richard Ridinger

Ridinger told analysts in discussing earnings that Lonza would trim manufacturing and make existing facilities more competitive, but he declined to give details, Reuters reports. He said he would adjust the company's "manufacturing footprint" and move it from a product-oriented to a market-oriented organization, Outsourcing-Pharma reports.

He expressed dissatisfaction with the performance of the company's custom manufacturing division. A spokeswoman told Outsourcing-Pharma that was tied to ramp-up costs of its new plants in Singapore and "quality-related" expenses tied to the Hopkinton, MA, facility. Both of those factors hurt the company's financial performance, which still came in above expectations.

The company has been working diligently to cut costs at the Visp site, its largest and in the home country. It has to get costs down and margins up to compete with lower-cost manufacturing in other parts of the world. It also has to pay down the debt it took on with the $1.35 billion acquisition last year of U.S.-based Arch Chemicals. Ridinger was brought in last year to get on top of the debt issue. In November, the company said it would cut 500 jobs from around its massive system, 400 of those coming from Visp.

But Visp has gotten some good news. The company is investing $15.2 million to double its capacity there to make antibody drug conjugates (ADCs), an area that Ridinger says holds promise.

- here's the Reuters story
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