Patheon has announced plans to consolidate its Puerto Rico operations into its manufacturing site located in Manati. The company will either close or sell its plant in Caguas.
The company estimates this consolidation will result in total expenses of approximately $7.0 million, of which approximately $2.4 million will be booked in the first quarter of fiscal 2010. Patheon also expects to book an impairment charge of approximately $1.3 million in the first quarter of fiscal 2010 in connection with the plan. The consolidation will be completed by the end of fiscal 2011, and will also result in accelerated depreciation of Caguas assets of approximately $7.0 million during the 2010-2011 fiscal year period.
Wes Wheeler, Patheon's chief executive officer and president, remarked, "We remain committed to growing our contract manufacturing business in Puerto Rico. We believe our customers continue to need a high quality and reliable supplier on the island. However, we have decided that it is not practical to operate two plants within close proximity of each other. We will consolidate our people, resources and investments at Manati and therefore concentrate on growing one 'flagship' site. We will work carefully with our customers, employees and authorities in Puerto Rico to affect a smooth and seamless transfer of existing products."
He added, "We are keenly aware that the closure of Caguas may impact many of our employees and their families. With this in mind, we are developing plans to offer affected Caguas employees available positions at our Manati site. For those employees who are not able to be accommodated in Manati, we will work to assist them in the transition."
Luis Fortuno, Puerto Rico's governor, commented, "We appreciate Patheon's contribution to the continued economic growth of the northern most region of the island, as well as its efforts to maintain its operations as the sole provider in Puerto Rico of contract development and manufacturing services to the global pharmaceutical industry."
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