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Merck closing 16 facilities

Merck has announced it will close eight R&D facilities and eight manufacturing plants following its merger with Schering-Plough

Merck is continuing to consolidate its operations following its merger with Schering-Plough, announcing on Thursday that it will close eight R&D facilities and eight manufacturing plants.

The research facilities will be phased out over the coming two years. One of the sites is near the biotech hub of Cambridge, Mass. Three are in the Netherlands, three are in Europe and one is in Canada. The company's women's health research, which is currently centered at one of the sites in the Netherlands, will be relocated to the US.

In addition to women's health, Merck said the company will retain its R&D focus on cardiovascular disease, diabetes/obesity, infectious disease, oncology, neuroscience/ophthalmology, respiratory/immunology and endocrine diseases.

Transfer of production from the eight manufacturing plants to other locations will begin this year. The company said it intends to sell its facility in Miami Lakes, Florida. The other manufacturing sites that will be sold or closed include two in Europe, two in Mexico, two in South America and one in Singapore.

"The company's core manufacturing activity will be focused on areas where it has unique expertise and capabilities, while leveraging a virtual global network of suppliers," Merck explained. "Merck will continue to make new strategic investments to support its worldwide product supply needs, particularly in emerging markets. In Latin America, for example, new investments are being made by Merck at its Xochimilco, Mexico and Campinas, Brazil facilities to increase capacity."

Merck said that the newly announced closings do not affect its previous estimate that it will reduce its total workforce by about 15 per cent across all areas and will achieve ongoing annual savings of $3.5bn as a result of restructuring related to the merger.

After the transition, Merck will have 16 major research and development facilities in seven countries. The company will have 77 manufacturing sites, down from the 91 that were owned by the two merged firms.

8th July 2010

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