Roche Ireland runs up further losses following €130m writedown

Pharma giant continuing with plans to close Clarecastle plant after failing to sell facility

The Clarecastle facility was initially established in 1974 as Syntex Ireland but later became part of Roche following its $5.3bn acquisition of the Syntex Corporation in 1994

The Clarecastle facility was initially established in 1974 as Syntex Ireland but later became part of Roche following its $5.3bn acquisition of the Syntex Corporation in 1994

 

Swiss pharma giant Roche said it had failed to find a buyer for its Co Clare manufacturing plant and intended to proceed with plans to close the facility after running up further losses.

The oncology drug specialist two years ago announced plans to shut the Clarecastle plant by 2019 with the loss of 240 jobs.

The company’s Irish subsidiary, which booked a €130 million writedown on the facility in 2015 relating to the closure, ran up additional costs last year as it continued to search for a possible buyer.

Accounts recently lodged with the Companies Registration Office for Roche Ireland Limited, which makes active ingredients that are sold to other Roche operations, show the Irish subsidiary reported a €78.5 million pre-tax loss in 2016. This compares to a €130 million loss a year earlier and a €9.59 million profit in 2014.

The accounts show Roche Ireland recorded a €22.2 million impairment charge for property, plant and equipment last year. A decommissioning provision of €8.5 million was also recorded. In addition, a provision for redundancy and restructuring has been set aside by Roche of €23.5 million for employes who have yet to depart but will have done so by 2019.

Restructuring

The planned closure of the Co Clare facility was announced as part of a broader restructuring programme that sees the group cut 1,200 jobs and closing four manufacturing plants worldwide.

As part of its phased shutdown of the Clarecastle facility, which will continue to run until 2019, Roche Ireland has made a provision for decommissioning the plant.

“Following extensive negotiations during 2016 with a potential acquirer for the company, those negotiations ended without agreement being reached. Accordingly, and in the absence of any alternative acquirer, the company will commence the planned closure of the plant estimated to be completed by December 2019,” Roche Ireland directors said in a note accompanying the latest accounts.

The Clarecastle facility was initially established in 1974 as Syntex Ireland but later became part of Roche following its $5.3 billion acquisition of the Syntex Corporation in 1994.

Overall exceptional costs for the subsidiary, which include provision for impairment of stock, property and equipment, as well as restructuring charges, totalled €80.2 million.

Staff costs at the site totalled €25.9 million last year, down from €27.5 million in 2015. The company employed 223 people on average last year, the accounts show.