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Merck unveils EU plant cuts and consolidation plan citing Sigma's US strategy

By Gareth MacDonald+

13-Jul-2017
Last updated on 13-Jul-2017 at 15:10 GMT2017-07-13T15:10:56Z

iStock/fotohunter
iStock/fotohunter

Merck KGaA has announced a plan to close some EU production sites and invest in others, citing the centralization strategy employed by Sigma-Aldrich as inspiration.

The plan will see Merck move reagent filling and distribution operations at sites in Darmstadt, Steinheim, Hohenbrunn, in Germany, and Buchs, Switzerland to a facility in Schnelldorf.

A spokesman explained that "In Steinheim, Darmstadt and Buch we fill and distribute classical laboratory chemicals like inorganic salts, acids, alkalis and solvents. In Hohenbrunn, we also fill hazardous chemicals."

Merck also said it will invest €90m to expand filling capacity at the Schnelldorf facility and to “further develop capabilities” in Darmstadt, Buchs and Molsheim in France.

The spokesman told us "Buchs will be strengthened with a focus on higher quality products with higher manufacturing complexity while Darmstadt would further focus on its key strengths in handling high-volume and automated and regulated processes.

"Molsheim is already a Center of Excellence for Biomonitoring and will be strengthened further in this area as the RtU Media from Eppelheim are being relocated to Molsheim."

Closures

The Steinheim site, which was gained when Merck bought Sigma-Aldrich, and Hohenbrunn facilities will close as will plants in Eppelheim and Berlin with activities being relocated to other sites.

Merck said the closures and reorganisation, which are due to be completed by 2022, will result in the loss of around 200 jobs.

Udit Batra, CEO of Merck’s life science business, said: “Centralizing filling of small quantities and their distribution will continue to increase our speed and responsiveness to customer requests.

This is something that the acquired Sigma-Aldrich excelled in and we see positive impacts of this effort already in North America” Batra continued.

This was echoed by the spokesman who told us: "Schnelldorf will become a manual down-filling and distribution Center of Excellence for non-regulated products and will serve as the central hub for down-filling and distributing non-regulated laboratory chemicals and reagents in Europe. Due to the direct connection to the logistics center which already exists in Schnelldorf, we will also be able to significantly improve our customer service.

"Further development of these Centers of Excellence in key European locations intends to reduce complexity of the Life Science global supply chain, while increasing production capacity to secure future supply, speed to market and service levels to customers."

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