Merck confirms plan to close sites in US, Brazil and Japan
Merck trims network to realise Sigma-Aldrich production synergies
In March, Merck told stakeholders it expected to achieve cost synergies of around €90m ($100m) in 2016, following the completion of its $17bn acquisition of life science and biotechnology firm Sigma-Aldrich last November.
Speaking on a call last week to discuss Q2 2016 results, Udit Batra, CEO of Merck Life Science said the “synergy execution is very much on track,” citing four planned site closures as evidence.
According to Merck spokeswoman Neetha Mahadevan, the sites earmarked for closure are: a manufacturing and distribution site in Rio de Janeiro, Brazil; a custom peptide and DNA oligos manufacturing site in Ishikari, Japan; and two sites in the US – Haywood, California and St. Charles, Missouri.
“St. Charles is legacy [EMD] Millipore, as well as Hayward. Rio de Janeiro and Ishikari are legacy Sigma-Aldrich sites,” she told Biopharma-Reporter.
“We are also transferring capabilities of some of these sites. For example, St. Charles is being transferred to St. Louis and production in Hayward, California is being transferred to Cork [Ireland] and Seattle [US].”
Site evaluations
During the conference call, Batra said the pace of the closures have been “a little bit ahead of plan,” but said the firm has been evaluating other sites and so far only around “50% of the headcount measures have already taken place” in realising the full synergies of the Sigma-Aldrich deal.
For the second quarter 2016, Merck KGaA reported revenues of €1.4bn ($1.6bn) across its life science division, which includes tools and products focused on serving the the biomanufacturing industry.
Sigma-Aldrich contributed nearly €600m in sales to the quarter, but organically the division grew 8% year-over-year, with Batra attributing continuing solid demand for cell culture media and single-use systems as the main drivers.
