Why did Bayer cut Yasmin plant shifts?

Is Bayer's Yasmin line in trouble? A German newspaper over the weekend quoted sources saying that the company's pharma unit planned to cut contraceptive pill production by one-fourth this year. The production facilities would work in three shifts instead of five and produce 180 million packing units instead of 240 million, the paper said.

But a company spokesman struck back at the report, telling Reuters that Bayer switched to a five-shift schedule only at times of peak demand, and that running three shifts was normal. "Revenue from our Yasmin product family continues to rise as planned," the spokesman told Reuters on Sunday. Der Tagesspiegel had reported that Yasmin demand was expected to suffer on pricing pressures stemming from the economic crisis.

If Yasmin sales did suffer materially, then Bayer's pharma sales would suffer as well; the contraceptive pills are Bayer's best-selling product group, with first-quarter sales of $443.2 million, up 7.4 percent from the same quarter of 2008.

- check out the Der Tagesspiegel report (in German)
- read the Reuters story
- see the Reuters follow-up

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