Issue Date: November 2, 2009
Lonza Cuts Jobs, Spending
In light of several unexpected events, especially since the end of September, Swiss custom chemicals maker Lonza says its 2009 operating earnings will be about $360 million, down from the $432 million reported in 2008. The company attributes the decline to unexpected volatility, including postponements and cancellations in large-scale biopharmaceutical production. In response, Lonza plans to reduce its costs by about $70 million over the next two years by consolidating business units and reducing overhead. This 5% cut could lead to elimination of as many as 450 jobs. The company also will adapt some of its large-scale biopharmaceutical capacity for smaller scale projects. Overall capital spending will be reduced by about 20%, or $100 million per year. The volatile environment is expected to continue for the next two to three years, according to CEO Stefan Borgas. Still, he says Lonza’s life sciences-focused business strategy is intact and that the company will continue to grow. Despite dropping its bid for formulation specialist Patheon last month, Lonza will continue to explore strategic investments, Borgas says.
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