Cost concerns stall, drive contract services

Swiss contract manufacturer Lonza is reportedly migrating its business from specialty chemicals toward higher-margin pharmaceutical ingredients, aiming to protect itself against cost competition, including that of compatriot Clariant. Industry cost consciousness is manifesting itself in more manufacturing remaining in-house, says Lonza CEO Stefan Borgas, in a Reuters report.

It's been no specialty-chemical picnic for Clariant, either. The company confirmed in late January that it is cutting 500 jobs and has closed plants in France, Britain and Mexico. It had shed more than 3,000 employees last year, and now some positions in Switzerland may be in jeopardy.

Onyx Scientific, by wishful contrast, predicts the cost squeeze will accelerate drugmakers toward contract providers for non-core chemistry services and away from the use of contractors as a tactical means of overcoming capacity shortages. "Increased productivity, quality results and optimum cost savings will be the collective aim," the company says in an announcement, "in order to reap ever greater returns."

- read the Reuters report
- see the Clariant item
- here's the Onyx news

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