(Source: Business Wire)
Affymetrix, Inc. (Nasdaq:AFFX) today announced the earlier-than-anticipated achievement of two key milestones in its plan to consolidate array manufacturing, set a new standard in reagent capabilities, and relocate US product distribution. That plan is part of a broader three-part strategic initiative to return Affymetrix to growth and market leadership by 1) reengineering the company's technology platform, 2) entering the new, higher-growth markets of validation and routine testing, and 3) improving operating leverage.
Affymetrix has consolidated all microarray manufacturing activities within its plant in Singapore, and moved all US distribution activities from Sacramento, California to a center operated by UPS in Louisville, Kentucky. These milestones were achieved three months ahead of schedule.
"These changes will create significant operating leverage for Affymetrix," said Kevin King, president and CEO of Affymetrix. "As a result, our manufacturing capabilities are significantly more efficient and in turn will lower our products costs and improve our gross margin. Now that all of our consolidation activities are complete, we anticipate annual savings on the order of $20 to $25 million."
"Affymetrix' decision to consolidate its entire microarray manufacturing activities in its Singapore facility, within three years of establishing operations here, is a strong vote of confidence for Singapore's competitiveness," said Dr. Beh Swan Gin, managing director, Singapore Economic Development Board. "With this expansion, Singapore will account for more than half of the global supply of microarrays, which are increasingly used by scientists to better understand complex disease biologies, and to identify predisposition to disease."
Array Manufacture
With the completion of its array manufacturing consolidation efforts in Singapore, Affymetrix becomes the first US life sciences company to take full advantage of the economic benefits offered in Asia.
"Customers of a relatively young industry such as biotech expect suppliers like Affymetrix to be nimble and take advantage of global opportunities to cut costs and improve delivery options," said Wayne Woodard, senior vice president, global operations. "In addition to fulfilling those needs, Singapore provides access to a highly skilled workforce, has a strong tradition of protecting intellectual property, and offers a stable geopolitical climate."
The Singapore facility achieved ISO 13845 certification in November, 2008.
