NPIL Pharma last week told workers at its former Pfizer plant in Morpeth, UK that the company is considering hiving off jobs in a bid to maintain the site's viability.
According to a statement released by the Indian firm, the site appears to have struggled in making the transition from its former role as Pfizer's in-house manufacturing facility to a competitive contract manufacturing plant.
As such, proposals have been drawn up which include cutting around 17 per cent of the site's work force, a total of 70 positions.
"Although the [Morpeth] site has seen some success in winning new contracts and business, it is clear that the global pharmaceutical sector has become highly competitive," the company said when the news broke late last week.
In order to remain a viable concern for NPIL, the company has proposed the 'strategic realignment of the business' cost base' at the site, with a 30-day company-wide consultation being held to deliberate the potential job cuts and efficiency issues.
According to an NPIL spokesperson, the current review "covers not only internal operating efficiencies, but also every area of spend on site, such as raw material and component purchasing, energy consumption [and] maintenance."
The company maintains that the much of any eventual headcount reduction can be achieved through voluntary measures taken by employees, although it is likely that some additional job losses will be unavoidable. These job cuts will be phased in during 2008.
NPIL is, however, also planning to create 14 new positions through 'internal reorganisation' which could reduce the need for redundancies, the company said.
Despite recent major refurbishment and upgrades to the pharmaceutical development area to support good manufacturing practice (GMP) compliant supply of materials for clinical trials, the site is proving tricky to handle, and has prompted a "holistic review of the Morpeth site operations."
A spokesperson for the company was keen to point out that the measures being taken at Morpeth are very site-specific, tied as they are to the adjustments needed to convert from an in-house facility to an API contract manufacturing facility.
As such, the consultation taking place regarding the Morpeth site will have no impact on the company's other UK plants in Huddersfield, Grangemouth or Billingham.
The site itself specialises in manufacturing APIs and solid dosage forms, particularly in the areas of cardiovascular and arthritis pain management, as well as providing contract development services.
While the company was unwilling to disclose any precise financial estimates regarding possible savings as a result of the site's restructuring, in-PharmaTechnologist.com was told that saving should run into "multi-millions" of pounds.
"Savings from the proposed reductions now in consultation (in partnership with other measures...) would deliver a site financial position to keep Morpeth competitive for current business and in pitching for new work," the company said.
"Management does not envisage any significant further reductions in staff complement once the envisaged savings have been delivered."
NPIL took over operations at the Morpeth plant in June last year after buying the site from Pfizer, which also landed the company a five-year supply agreement estimated to be worth over $350m.