Allergan targets Actavis legacy plant in Iceland in cost-cutting move

By Dan Stanton

- Last updated on GMT

The plant in Hafnarfjordur earmarked for closure is powered solely by geothermic energy
The plant in Hafnarfjordur earmarked for closure is powered solely by geothermic energy

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Manufacturing operations at an Actavis legacy site in Iceland will cease and products will be transferred out the country from 2016, Allergan has announced.

Earlier this year, drug giant Actavis completed its $66bn (€62bn) mega-merger and almost immediately cut jobs​ at Allergan’s headquarters in Irvine, California.

Two months on, the combined firm – officially named Allergan – is taking its axe to Iceland where it plans to shutter a manufacturing plant that produces over 1.5 billion generic pills per year.

Drugs made at the manufacturing and packaging facility, the majority of which are for export to Europe, will start to be transferred across Allergan’s network in the third quarter 2016 and operations will cease mid-2017.

“Transferring products from Iceland to alternative sites ensures that the Company’s products remain cost competitive in the global generics marketplace,”​ the firm stated.

Icelandic saga

An expansion in 2010​ at the site in Hafnarfjordur which is powered solely by geothermic energy added 50 new jobs to the firm’s estimated Icelandic workforce of 570, all of which the company said will not be affected until the end of 2016.

“We are committed to making this transition as smooth as possible by announcing this decision significantly in advance and by implementing a comprehensive transition plan for all eligible employees,”​ Robert Stewart, President of Allergan’s Generics and Global Operations said.

He added that this realignment did not mean Actavis is leaving Iceland as the firm will continue with its R&D, regulatory, and commercial business in the country, as well as its contract manufacturing business, Medis.

Actavis merged with Watson Pharmaceuticals​ in 2012 and the firm has continued its acquisition spree buying Forest Labs for $28bn​ before the latest agreement with Allergan.

But such deals have left the company with a large manufacturing footprint​, and the firm has responded with a number of facility closures.

In 2013​, it was announced production sites in California and North Carolina employing over 300 workers each were earmarked for closure, while post-Forest, closures in Missouri​ and New York​ affected almost 300.

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