Bentley-based animal pharmaceutical company Chemeq Ltd will lay off approximately 50 employees as a part of its new corporate growth strategy.
Bentley-based animal pharmaceutical company Chemeq Ltd will lay off approximately 50 employees as a part of its new corporate growth strategy.
Along with the redundancies, the company has announced plans to move its leased corporate headquarters to the company-owned facility in Rockingham.
Chemeq chief executive David Williams said the decisions were a commonsense next step following the strategic review undertaken by the company in July this year - after the company had attracted the attention of ASIC and the ire of investors.
"Chemeq is in a strong financial position with $23.1 million in cash as at 31 August 2006, and this reorganisation will ensure that our strong financial resources are focused on those activities that directly create value for Chemeq shareholders," he said.
"It is unfortunate that redundancies will occur, however it is crucial that Chemeq aligns its organisation with its corporate strategy, particularly given we do not intend to participate at all points in the overall product commercialisation process in the future."
The news comes two weeks after the resignation from the board of company founder Ian Melrose.
The full text of an announcement by Chemeq is pasted below
Chemeq Limited (ASX: CMQ) today announced that it had decided to implement a major reorganisation of its business to match its new corporate strategy.
The reorganisation follows the announcement of the results of a wide ranging strategic review on 5 July. This strategic review found that Chemeq should focus on its core competencies and seek to pursue further commercialisation of its intellectual property and products through strategic partnerships.
Following the conclusion of that review, the Board considered the optimal organisation size and structure to successfully pursue Chemeq's new growth strategy.
As a result, the Board has decided to reorganise Chemeq's operations. The reorganisation will involve a rationalisation of total headcount by approximately 50 full-time staff. Headcount reductions will be across all divisions including head office administration, research and development, sales and marketing and involve a streamlining of the Company's manufacturing operations at Rockingham.
Together with the planned move of corporate headquarters from leased premises at Bentley to the Company-owned facility at Rockingham, the reorganisation is expected to lead to a significant reduction in the Company's overheads and annual cost structure.
Chemeq Chief Executive Officer David Williams said that this reorganisation was a logical extension of Chemeq's new growth strategy.
"A rationalisation of our operations is a commonsense next step to match our organisation resources and capabilities to our core operations in research and development, intellectual property development, manufacturing know-how and managing new product commercialisation," he said.
"Chemeq is in a strong financial position with $23.1 million in cash as at 31 August 2006, and this reorganisation will ensure that our strong financial resources are focused on those activities that directly create value for Chemeq shareholders."
"This includes work on achieving further regulatory approvals for our products, expanding product label claims through new field trial dossiers and the examination of strategic partnerships in manufacturing and distribution."
"It is unfortunate that redundancies will occur, however it is crucial that Chemeq aligns its organisation with its corporate strategy, particularly given we do not intend to participate at all points in the overall product commercialisation process in the future."
"Our Rockingham facility remains an important strategic asset for Chemeq, we have been able to streamline our manufacturing operations considerably and have now satisfied ourselves that the facility can operate at design nameplate. In addition, we will buy in raw materials that are currently manufactured on site at Rockingham.
"These measures will increase our production flexibility and reduce plant overhead whilst ensuring we have the capacity to continue to manufacture and deliver product in accordance with current sales demand."
"This is a major rationalisation of Chemeq's operations, however I believe it is in the best long-term interests of the Company as we aggressively pursue our strategy of value creation through strategic partnerships and alliances."
Chemeq is currently in the process of implementing the changes across the business.
The changes are expected to be reflected in Chemeq's cost structure immediately.