Aspen job cuts loom - more than 200 positions at risk

More than 200 jobs are on the line at Aspen Pharmacare’s production facilities in Port Elizabeth and East London, as Africa’s biggest pharmaceutical manufacturer seeks to remain globally competitive.

Staff were told that the company had to work more efficiently, more cost-effectively across the value chain, and that automation had been adopted so that Aspen could produce affordable, high-quality medicine on time.

This was detailed in a letter sent to Aspen employees on December 9.

The news comes as SA is facing a retrenchment bloodbath due to the weak economy, with major companies such as Telkom and Massmart already starting talks about job cuts.

Telkom is expected to axe 3,000 jobs while there are 1,440 jobs on the line for Massmart, which owns leading SA brands such as Game, Makro, Builder’s Warehouse and Dion Wired.

Workers at Aspen’s Korsten facility were told on December 9 about the potential job losses.

The announcement created much uncertainty and anxiety among staff, who are in the dark about the positions that would be affected.

A Section 189A notice was issued, which essentially starts an employee consultative process.

The first hearing at the Commission for Conciliation, Mediation and Arbitration (CCMA) took place on January 14.

In the letter, Aspen Pharmacare’s executive head of pharm finished dose form operations, Grant Swart, said companies had to continuously reinvent themselves to enhance competitiveness.

“Aspen is no exception ... we will be implementing the next phase of our transformation journey which will guide our organisational actions for a sustainable, competitive, customer-centric operation,” he said.

“We anticipate that approximately 219 employees may be affected across our Port Elizabeth and East London operations.”

He said an accurate number would be available only once the consultation process was complete and possible redeployment opportunities had been explored.

“Aspen is committed to treating every impacted employee with respect and dignity.

“We are grateful for your service, and we will be working with all stakeholders to develop a comprehensive social plan to mitigate the impact of the proposed retrenchments.”

Swart said Aspen was bullish about the long-term future of the company in the Eastern Cape.

“Our partnership with this province is for the long haul, which is why we are operationalising two new factories in Port Elizabeth.”

One is a high-containment oral solid dosage plant for the manufacture of immunosuppressants and chemotherapeutic agents.

“The facility has been commercial since 2018 but it is not currently running at full capacity.”

The second plant is a sterile injectable facility for the manufacturing of ampoules, vials and cartridges.

“The facility is currently in project phase and will become operational in the next two years and ramped up over a three-year period,” he said.

When contacted, Aspen Pharmacare Holdings group operating officer Lorraine Hill said: “[The company] has embarked on a transformation journey to transition its South African manufacturing operations into a globally competitive, technologically advanced and sustainable business, enabling it to access a number of niche therapeutic areas.”

She said this had led to the company’s manufacturing operations in Port Elizabeth and East London starting with a restructuring process in terms of Section 189A.

“While a position can only be determined once the CCMA consultation process has been concluded and all options explored to minimise potential job losses, there is a potential for some employees to be impacted,” Hill said.

“We are working hard to find suitable alternatives to minimise the impact of this process.

“This is not something that Aspen takes lightly and is a last resort in a transformation journey that has been transparent and involved employees and their input.”

Staff at the Port Elizabeth facility said the news had caused consternation.  

“It is all everyone talks about. Wherever you go, people are just speaking about it.

“Spirits are down and no-one is happy,” one worker said.

He said the worst part was the uncertainty about who would be affected.

“It could be anyone and we must just wait for the process to unfold,” the man said.

Another employee said no-one knew whether they would still have jobs or not.

“And they have altered organigrams with different titles, so you’re not sure where you can fit in,” she said.

“Everyone seems most upset about the fact that they are not being transparent about the whole thing.”

The JSE-listed Aspen was found guilty of collusion last year by the UK’s Competition and Markets Authority (CMA).

The company undertook to pay £8m (R149m) to resolve the case.

SA Chemical Workers Union general secretary Tumediso Modise said he believed that Aspen had performed poorly in the international market and that this may be why some jobs were on the line in Port Elizabeth and East London.

The union represents 8% of the company’s 2,600 strong workforce in the two cities.

“We will be attending the meetings to find out why and get more answers,” Modise said.

“It is terrible that these people might be joining the army of unemployed people in SA.

“We will do our best to stop this,” he said.

Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union regional co-ordinator Karools Adams said Aspen had for some time been talking about a “transformation journey”.

“This so-called journey has ended up with retrenchments,” he said.

The union represents 14% of the employees, with the remaining staff not affiliated to any union.

“People are going to lose their  jobs in this tough economic climate. That is a big problem.”

Adams said he was struggling to get a full explanation from the company about the reasons for the retrenchments.

“All they say is that Aspen has to start a recovery plan to recoup R400m in savings.”