Novartis Plans to Close UK Grimsby Plant, Potentially Cutting 400 Jobs

Novartis CEO Vas Narasimhan recently reported to investors that the company is moving toward integrating its manufacturing operations into a single entity more focused on advanced technologies. The latest development is the company’s plan to cease operations at its Grimsby site in the UK, one of Novartis’ three major manufacturing facilities, whose production team enjoys a strong reputation within the company.

It is reported that the factory covers an area of 220 acres, with some assets available for separate sale. Novartis stated that unless a buyer can be found, approximately 400 workers will lose their jobs, resulting in a blow of at least £23 million to the local economy.

According to BusinessLive, local officials and Novartis met on February 12 to discuss how to implement the closure process in the event that the buyer fails to honor its commitments. In 2018, after Novartis first announced the closure of this factory, a special task force was established locally to assist workers and unemployed residents in the town.

In September 2019, Novartis stated that six companies had engaged in discussions regarding potential acquisition since the announcement of its closure plan. However, no further updates have been announced since then.

Novartis plans to begin layoffs in April as it shuts down this facility, and will cease remaining operations by the end of 2020.

Interestingly, former Grimsby MP Melanie Onn had previously pressured Novartis to uphold its responsibilities as a major employer before preparing to leave. However, she lost her seat in the December 2019 election.

To raise funds for the research and development and acquisition of innovative drugs, Novartis reduced its corporate operating costs. In 2018, Novartis listed its Grimsby plant among five facilities slated for sale, closure, or downsizing; the other four were located in Basel, Schweizerhalle, Locarno, and Stein, affecting 2,000 jobs.

In October 2019, Novartis also initiated a plan to shut down part of the production facilities at its Ringaskiddy plant in Ireland, consolidating its active pharmaceutical ingredients (API) business in the region. This will result in the loss of 320 jobs.

Novartis has been closing and selling large-scale and formulation manufacturing facilities as the company shifts toward high-margin specialty drugs, such as cell and gene therapies, while divesting from long-established medications and generic drug manufacturing.

Previously, Novartis added 450 jobs to its cell and gene therapy division in Stein to expand the production of its gene and cell therapies, primarily new drugs such as the CAR-T therapy Kymriah and the gene therapy Zolgensma. However, these production facilities are much smaller and require highly skilled workers who must reprogram cells and genes before transplanting them into patients for potential treatment.

Narasimhan stated, “We will continue to implement robust productivity initiatives, targeting $2 billion in absolute savings across technology operations, manufacturing, procurement, and commercial services.” In a conference call two weeks ago, he further clarified that the company is enhancing its capabilities in procurement and manufacturing, reducing excess inventory, and more aggressively deploying data and digital solutions across Novartis’s global manufacturing network.

Reference Source: 400 Novartis workers prepare for job losses at U.K. manufacturing site

Source: Pharma First Time Author: sinayiyao