Rhodia Pharma Solutions has completed a new extension to its production operation in Dudley, outside Newcastle, in the UK to strengthen its ability to provide custom manufacturing services to pharmaceutical companies.
The upgrade comes at a time when Rhodia is in the throes of a major restructuring drive and lends further weight to the idea that the pharmaceuticals business is one of the group's stronger units.
Last year, RPS consolidated its US activities in its development services unit into a new 101,000 square-foot purpose built facility at DuPont Pharmaceuticals' site at Chambers, New Jersey that came on-line in early 2004.
The upgrade to the Dudley site includes a new chemical reactor stream that the company said brings more flexibility to the plant and allows the introduction of new products at minimal cost, two new pharmaceutical product isolation facilities, and improvement to gas emission technology to ensure compliance with regulations.
The Dudley facility is a large-scale general purpose cGMP active pharmaceutical ingredients and intermediates manufacturing operation. Formerly a Sterling Drug facility, it employs 350 people.
"These strategic actions allow us to increase our line of services to pharma customers," said Nick Green, president of PS.
He insisted that outsourcing remains a valid business model, despite the fact that consolidation of pharmaceutical companies and the lower number of new chemical entities (NCE) compared to the late 1990s have resulted in more unused capacity.
Meanwhile, Rhodia has arranged a refinancing plan totalling about €1.8 billion, part of a restructuring of its finances that is aimed at avoiding a cash crisis next year.
The company said that under the refinancing plan it would increase capital by about €450 million, issue bonds to raise at least €600 million, and would have access to a line of bank credit totalling €758 million.
The company is in the process of selling off assets to help bring down debt that earlier this year topped €2.1 billion.
Rhodia has posted three years of losses and expects two more unprofitable years because of escalating raw materials costs, the impact of the weak US dollar on its euro-recorded sales and a slump in demand for its products and services.
The company narrowly avoided defaulting on its loans in December after reaching an agreement with banks on refinancing part of its debt.