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Merck KGaA (MKGAF.PK) to Shutter Four Sites, Lay Off 200 Employees

7/13/2017 6:05:06 AM

Merck KGaA to Shutter Four Sites, Lay Off 200 Employees July 13, 2017
By Alex Keown, Breaking News Staff

DARMSTADT, Germany – Merck KgaA (MKGAF.PK) is consolidating its western European life science production network that will close four manufacturing sites in Germany, resulting in the layoff of about 200 employees.

Since 2010, the Germany-based company has consolidated 18 manufacturing sites to drive efficiency. Now the company is continuing that trend with the consolidation of four sites in Germany, Switzerland and France. Merck said it intends to invest about $102 million (€90 million) in consolidating those sites as part of “continued efforts to drive operational excellence and improve efficiency of its life science business.” The funds will be invested to “develop a manual filling capability and increase capacity” at the facility in Schnelldorf, Germany.

Additionally, Merck said the funds will be used to further develop capabilities in at two German sites, Darmstadt and Buchs, as well as a site in Molsheim, France. The existing Hamburg, Germany site will continue to operate as before, Merck said in a statement.

Three sites in Germany, in Darmstadt, Steinheim, Hohenbrunn, along with a facility in Buchs, Switzerland, will be consolidated into a central distribution center in Schnelldorf, Germany, the company said. Those sites are used for the filling and distribution of non-regulated laboratory chemicals and reagents, Merck said.

As part of its restructuring, Merck KGaA said it will relocate and shutter sites in Steinheim, Eppelheim, Hohenbrunn and Berlin. Those sites are expected to begin ceasing operations between 2019 and 2022, Merck said in its statement.
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“Centralizing filling of small quantities and their distribution will continue to increase our speed and responsiveness to customer requests. This is something that the acquired Sigma-Aldrich excelled in and we see positive impacts of this effort already in North America,” Udit Batra, chief executive officer of Merck KGaA’s life science business said in a statement.

Merck acquired Sigma-Aldrich in 2015, which gave the company 65 production facilities and 130 distribution centers around the world. The company said it will continue to evaluate its operations to “assure the right capacity levels to serve customer needs” and improve efficiencies.

Christos Ross, head of Merck’s integrated supply chain operations, said the company has also focused its streamlining operations on its U.S. facilities, including St. Louis and Massachusetts. In January, Merck KGaA laid off 43 employees at a company accounting office in the Boston suburb of Quincy, Mass. The cuts are part of a company realignment, according to reports. In July 2016, Merck announced plans to build a $115 million facility in Burlington, Mass. for its North American life sciences subsidiary, MilliporeSigma, and shift employees from its existing site in nearby Billerica. The facility, which will include a customer collaboration laboratory, training center and office space, will be located in the town of Burlington, just outside of Boston. The collaboration center, called a M Lab Collaboration Center, will be a state-of-the-art, shared, exploratory environment where the company's scientists and engineers work together with customers to help solve their toughest life science challenges.

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