Eli Lilly has announced a major shake-up of its global manufacturing businesses to better support the company's current portfolio and future pipeline.
In an attempt to “compete and win in a more challenging business environment," Scott Canute, Lilly's president of manufacturing operations, said several changes are being made “to ensure the company has the right capacity in the right places. This requires investing in new growth areas and reducing resources in others."
Firstly, the firm said it will stop construction of an insulin manufacturing plant in Prince William County, Virginia, USA because it can meet expected demand with other sites and new capacity at its plant in Sesto, Italy. The 120 workers at the site will be given opportunities for jobs at other Lilly locations.
The company is also offering a voluntary exit package to up to 250 of 1,000 workers at an ingredient-manufacturing site in Lafayette, Indiana.
However, Lilly’s plant in Kinsale, Ireland, is going to benefit from “significant new investments” to manufacture a new generation of biotechnology compounds and the firm noted that it expects to launch one biotech product per year, on average, beginning in 2010. In addition, Lilly will expand its Indianapolis operations so that the site can convert the active ingredients made in Kinsale into final dosage form.
As a result of these moves, the company said it would take estimated restructuring and asset impairment charges of $155-$185 million, to be spread over fourth-quarter 2006 and first-quarter 2007. Last month, the company announced it would pay $85-$95 million in restructuring charges with regards to the closure of a manufacturing facility in Basingstoke, UK, where 550 people work.