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Drugmaker Merck closing eight plants, eight research sites

Posted July 8, 2010

— Drugmaker Merck & Co. (NYSE: MRK) said Thursday it is shutting down eight manufacturing plants and eight research sites around the world, including two domestic locations, in the latest phase in its strategic pruning of operations.

Merck is in the process of a $300 million expansion of its vaccine manufacturing facilities in Durham, N.C.

The moves, which include consolidating some offices, are part of ongoing consolidation following Merck's acquisition of Schering-Plough Corp. last November.

That deal made Merck the world's second-biggest drugmaker but the company said it would eliminate about 15 percent of the combined work force, or roughly 16,000 jobs.

"As part of today's announcement, Merck plans to phase out operations at eight research sites over the next two years," the company said in a statement.

"These sites include: Montreal, Canada; Boxmeer (Nobilon facility only), Oss, and Schaijk, Netherlands; Odense, Denmark; Waltrop, Germany; Newhouse, Scotland; and Cambridge (Kendall Square), Massachusetts, U.S."

The production cutbacks were listed by site in the announcement:

"Beginning in the second half of 2010, the company will phase out operations at eight manufacturing facilities and these sites will exit the global network as activities are transferred to other locations. Specifically, the company intends to cease manufacturing activities at its facilities in Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico, and Santo Amaro, Brazil, and intends to sell the Mirador, Argentina and Miami Lakes, Florida, facilities. In Singapore, chemical manufacturing will be phased out at the legacy Merck site, but it will continue at the legacy Schering-Plough site. The company's extensive pharmaceutical manufacturing operations will continue at these two Singapore facilities."

Those cuts are intended to save the Whitehouse Station, N.J., company about $3.5 billion a year.

Merck said the consolidation is part of its strategy to diversify, focus on patient needs and invest in biologic drugs, emerging markets and other key areas for future growth.

"Today's announcement is another important step as we successfully integrate out global operations on schedule and move forward with Merck's strategic priorities," Chief Executive Richard Clark said in a statement.

Over the next two years, the company will phase out operations at eight research sites, including one in Massachusetts.

And beginning in the second half of this year, Merck will phase out operations at eight manufacturing plants, transferring production to other factories. One of the affected locations is in Miami Lakes, Fla.

In morning trading, Merck shares rose 35 cents to $35.78.

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