Novartis boss reveals what might happen next at its Grimsby site

By Grimsby Telegraph | Posted: 26 Sep 2018

Novartis is actively seeking a new buyer for the Grimsby plant - and there is already "early stage interest".

Haseeb Ahmad, managing director for Novartis UK & Ireland, revealed new details about the future of its Grimsby site. 

It was announced yesterday that the Swiss-owned pharmaceutical facility on Moody Lane would close in 2020 with the loss of 395 jobs.

But Mr Ahmad, managing director for Novartis UK, denied that the Moody Lane site is losing money and said it is in fact "highly effective" and marketable.

Here are the main questions he answered and insights we learnt from his interview on BBC Radio Humberside this morning.

Why is the site closing?

Mr Ahmad said the "nature of healthcare is changing" as Novartis prepares to move towards more speciality medicines and even individualised medicines.

He said: “The facility we have in Grimsby manufactures some of our higher volume, older medicines so that’s the reason we’ve made the decision.

“The type of medicines we produce there are for hypertension or heart failure, medicines for breast cancer and a variety of other medicines across these areas."

He added: “In the next number of years, the same level of demand won’t be there for those medicines and we won’t require this level of manufacturing capability."

The Novartis plant in Grimsby which is set to close by 2020 (Image: Jon Corken)

The decision is not specific to Grimsby or the UK, and other announcements have been made today in Switzerland and previously in Japan and the United States.

Is the business losing money?

Speaking on the David Burns Show, Mr Ahmad denied the facility was loss making or could become loss making in the future.

Read more: Novartis factory up for sale in Grimsby as MP holds talks with owners about fate of staff

He said: “It is not (loss making), it is a very effective site, effective at producing the medicines we produce there but this is part of a global transformation of our manufacturing network.

"As we look over the next number of years, we see a change in the nature of medicines we produce globally, and that’s the reason we’ve made the decision.”

What and where next?

No definitive decisions have yet been made about where the manufacturing will be moved to.

Novartis workers are learning of the company's intention to close the Grimsby plant (Image: Jon Corken)

Mr Ahmad said: "Up until now we've just been really focused on making the decision today.

“We continue to operate the facility at the same level of output and effectiveness over the next couple of years and in the next 12-24 months we’re going to start making those decisions."

Is there a buyer?

Novartis confirmed it would actively look for a new buyer for the site.

While there is no buyer confirmed yet, there has been some "early stage interest".

The site will continue to operate until 2020, but in the meantime Mr Ahmad said the firm would be working with government and other routes to secure a sale.

He said the site was marketable: “We have, and this is recognised throughout the manufacturing community, a very effective site when it comes to producing these types of smaller molecules.

Novartis workers arriving at the Grimsby site as it is announced the company has proposed its closure(Image: Jon Corken)

“This is a highly effective site for this kind of medicines with strong capabilities, a very dedicated staff.

"If we’re not able to find a buyer by the end of 2020, Novartis will be exiting but until then we will continue to operate the site."

Deals could be constructed in "all sorts of ways", Mr Ahmad said, but it is envisaged that any sale would take time to become reality.

What support is there for staff?

Mr Ahmad said today's announcement was "very difficult" and recognised the need to look after staff in the coming days and weeks.

He said: "We are going to treat every employee with the utmost respect and fairness.

"We will be setting up consultative groups of the employees where we will be sitting with them, listening to them and understanding their needs and consulting with them on all of the different options.

"We will be keeping them abreast, both through the consultative groups and also individually on how this plays out and what it means for them."

Novartis closure: 'It hurts a small town to take a hit in the higher paid grades' - by business editor David Laister.

The earth-shattering news that one of Grimsby’s biggest, best and longest standing employers is proposing closure hoisted a dark cloud over a gleaming Humber Bank, and it is going to take some shifting.

Novartis’ bolt out of the bright blue, via Basel, comes at a huge cost to North East Lincolnshire, with 395 well paid positions likely to disappear as the decade does, and further impact likely in the contracting sector that supports it.

The pharmaceutical giant has been a firm fixture on the South Humber Bank since post-war attention turned to economy building. It has been a leading company when it comes to community engagement and played a critical role in the development of the process cluster it has been at the forefront of.

With handsome remuneration, excellent sports and social facilities, and a drive to educate the next generation when it comes to science and engineering, it was a clear employer of choice. But technological and medicinal advances, often twinned, and the competition within and structure of the wider sector, appear to have done for the town’s 226-acre plant.

As one of the global innovators, Novartis has been at the forefront of new products, with hundreds of millions of pounds invested in mass batch processing. Now, as licences expire on once safeguarded products – with time-limited protections in place for exclusivity of production and sale – it has opened the doors to third party manufacturing for global markets in developing countries.

Medicine is also changing too, with active ingredients in treatments tailored to a patient, making it a highly specialised process – not a one batch suits all, which the town’s plant has traded so strongly on.

This, clearly, can be done cheaper elsewhere, if still desired. Whispers were first heard on the eve of the eventual announcement, but the perverse ray of hope that the first Swiss job losses brought, was quickly shattered with the devastating blow for Grimsby.

This was not a town hall meeting to deliver the global news as a single business entity, but a hammer blow at the heart of the Humber business community. It hurts a small town to take a hit in the higher paid grades.

So much has been made of it being an exemplar employer, from encouraging cycling to work to flagging up careers in glossy destination magazines aimed at bringing further inward investment, attracting and retaining talent.

It is the profile it holds that makes it all the more the bitter pill to swallow. Just like Grimsby MP Melanie Onn , I recall it being flagged up at school, with the importance of science subjects. It was the first real push of the vital Stem skills we’re now so well versed in.

What is important is this doesn’t play a part in diminishing aspirations just as so much promise abounds with the Grimsby Town Deal , East Marsh regeneration and Energy Estuary status.

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