Switzerland-based Nycomed says it is planning to move the vast majority of its raw material sourcing to India, a move which will result in the loss of around 200 jobs at sites in Germany and Austria.
The firm and Indian partner Cadila Healthcare set up a joint venture called Zydus Nycomed in 1999, and their existing agreement will be amended to include the transfer of Nycomed’s chemical production of active pharmaceutical ingredients from the sites in Linz (Austria) and Singen (Germany) within the next three to four years. The Zurich-headquartered firm said a maximum of 200 positions of about 1,400 people working in Singen and Linz might be affected.
Nycomed said that “chemical production in the pharmaceutical industry is shifting towards countries with lower production costs”, driving down market prices for APIs. “Producing these in the Indian JV would enable Nycomed to meet customer demand directly instead of outsourcing the production”, the firm added, noting that the JV, which is located in MumbaI, currently supplies key starting materials for the production of its best-selling anti-ulcerant pantoprazole.
Barthold Piening, Nycomed’s executive vice president for operations, said that chemical API production “is under increasing cost pressure from countries with lower wages. We will focus on the pharmaceutical production, because this is an area for future innovation where we can utilise all our know-how to compete.”
With 550 employees, Linz is one of Nycomed’s larger sites and it is dedicated to the production of sterile ampoules and biological products. Singen is Nycomed’s largest production facility and 840 people work there.
Operating income shoots up
The news came as Nycomed said that turnover for 2007 increased 3% to almost 3.5 billion euros, while operating income leapt 62.9% to 217.2 million euros.
Chief executive Hakan Bjorklund said the past year was Nycomed’s most successful year so far, noting that the integration of Altana Pharma “is well ahead of plan”. He added that “we are building a best-in-class, mid-sized healthcare company that is ready for the future and well positioned to take advantage of growth opportunities”.
Highlights included the acquisition of Bradley Pharmaceuticals, which was closed in early 2008, and licensing deals signed with Baxter for the haemostatic agent TachoSil and Sepracor for the corticosteroid ciclesonide. Mr Bjorklund noted that in geographical terms, “our markets in Latin America and Russia/CIS as well as in Southern and Eastern Europe continued to grow at very satisfactory rates”.
