SmithKline Beecham Phases Out Johannesburg Plant

As part of its worldwide integration program, SmithKline Beecham is forming a new company in South Africa, combining its consumer and pharmaceutical divisions. Following a detailed review of existing facilities and project needs, it was decided that medicinal product manufacturing should be consolidated at the existing facility in Cape Town. As a result, the Isando plant in Johannesburg is to close down. The closure will be phased out over the next nine months, SB announced.

The Isando plant has been operational since 1951, manufacturing non-prescription medicines, toothpaste and nutritional drinks for SB Consumer Health. SB's worldwide disposal of its personal care range and of a number of products marketed exclusively in South Africa has reduced the output of the factory, making it uncompetitive. The more modern plant in Cape Town, which manufactures prescription medicines, has unused capacity. Recommendations for the Cape Town site include the purchase of another site for expansion and the construction of new warehouse facilities.

Gunther Faber, director and vice president Southern Africa at SB, said it was a difficult decision, but if the company is to be successful in the future, "we must have a low-cost base, be innovative and flexible, and have the ability to switch from prescription to over-the-counter medicines successfully and profitably."