Updated on 13 June 2014
Teva is on a cost-cutting drive and is reportedly closing 11 plants and evaluating 16 others
Singapore: Teva Pharmaceutical Industries executives said that reducing manufacturing and procurement costs from its vast manufacturing system will be key to cutting overhead by $2 billion by the end of 2017.
"The company was created by a series of mergers and acquisitions. We managed to accumulate 75 manufacturing facilities. We can reduce this number to half of what we have today, and the remaining facilities will be efficient, productive and of course of the highest quality, which is very important," said Teva CFO Mr Eyal Desheh in a news report. It is reportedly closing 11 plants and evaluating 16 others.
The company also said it can get savings by moving from smaller plants to larger, more efficient facilities. Executives said they intend to reduce the logistics costs, in part by reducing the number of warehouses it operates.
But even as the company is closing older and smaller, less efficient plants, it is building others so it can expand in markets, like Eastern Europe and Russia, where it needs more presence. "Building a plant in Russia will help us in reducing cost of foreign product duty. Local manufacturing has an advantage," Mr Desheh said.