West Pharma to merge manufacturing and exit sites in network shake-up

By Flora Southey contact

- Last updated on GMT

(Image: Getty/Ridofranz)
(Image: Getty/Ridofranz)

Related tags: Investment

A network reshuffle will see West Pharma consolidate manufacturing and close some facilities to “streamline” its plant network.

The contract packaging and delivery technology firm announced its plans last week, telling investors during its Q4 and full-year 2017 results​ call it intends to restructure certain manufacturing operations and locations over the next 12 to 24 months.

As West Pharmaceutical Services migrates “those products over and those customers over, then [it] will have the opportunity to exit those facilities and those activities,” ​said CFO Bill Federici.

“A couple of those locations will actually close, but it will take some time to do that,” ​he told investors.

According to CEO Eric Green, the changes will enable the firm “to make investment to drive [its] high-value proprietary products and healthcare-related contract manufacturing business, and drive expansion.”

West Pharma plans to execute these changes over the next 12 to 14 months, expecting to incur between $8m (€6.5m) and $13m in restructuring expenses, and pay between $9m and $14m in capital expenditure.

Upon completion, the firm predicts an annual return in savings of between $17m and $22m.

The firm did not disclose additional details regarding the restructuring.

The firm reported full-year 2017 net sales of $1.599bn – demonstrating year-on-year growth of more than 6% – and predicts net sales at constant-currency growth between 6-8% in 2018.

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