US drug maker Merck to shut Singapore chem ops by end-2011

16 July 2010 04:17  [Source: ICIS news]

SINGAPORE (ICIS news)--US-based drug giant Merck will be ending its chemical operations in Singapore by the end of the next year as part of a consolidation exercise after the company’s merger with Schering-Plough, a company source said on Friday.

“The API (active pharmaceutical ingredient) plant in Tuas will be phased out by end of 2011 as announced earlier,” the source from the company’s subsidiary Merck Sharp Dome (MSD) in Singapore said, without further elaborating.

The facility to be shut is capable of producing chemical intermediates and final active pharmaceutical ingredients for several MSD active pharmaceutical ingredients, according to its website.

Merck said in a statement this month that the phasing out of its operations in Singapore was part of its plans to close operations at eight research sites and eight manufacturing sites worldwide as part of a restructuring program that began in December 2009 following its merger with drug maker Schering-Plough.

While chemical manufacturing would be phased out, the company would continue chemical and pharmaceutical manufacturing operations at the Schering-Plough facility at the same site, Merck said.

“The company's extensive pharmaceutical manufacturing operations will continue at these two Singapore facilities,” it said.

The company also plans to phase out operations at eight manufacturing facilities beginning in the second half of 2010, with their activities transferred to other locations, it said.

Merck’s facilities in Italy, Portugal, Mexico, and Brazil would be phased out, while the company intends to sell off its operations in Argentina and Miami Lakes, Florida, the company said.

Merck added it expected its total global workforce of around 10,000 to be reduced by around 15% across all areas of the newly-merged company in two years.

The drug maker said that initial phases of the merger restructuring program would result in savings of around $2.7-3.1bn (€2.1bn-2.4bn) in 2012, with the aim of yielding about $3.5bn in annual savings upon completion of its consolidation exercise.

Merck posted net income of $12.9bn and sales of $27.4bn last year, according to its 2009 annual report.

($1 = €0.78)

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By: Nurluqman Suratman

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