Martek Restructures Kentucky Plant, Lays Off 45

COLUMBIA, Md.Martek Biosciences Corp. announced restructuring plans at its Winchester, Ky., manufacturing facilities that include laying off 45 workers and transferring certain manufacturing and distribution processes to its Kingstree, S.C., facility. The move, slated to be completed by the end of fiscal 2010, will streamline operations, improve capacity utilization and reduce manufacturing costs and operating expenses.

The changes are in line with Marteks strategy to offset a significant portion of price reductions that result from its infant formula contract extensions by implementing manufacturing cost savings and product innovation initiatives, and by growing its non-infant formula business. When combined with DSM's current ARA production capabilities, Martek's DHA and ARA production capacity will be substantially in excess of current and forecasted requirements for the next several years.

The company expects to incur total cash charges of approximately $1.5 million in fiscal 2010, of which $500,000 will be recognized in the third quarter and $1 million in the fourth quarter of fiscal 2010. The company also is mulling the potential sale or lease of a portion of its Winchester operations. Any such sale or lease would be contingent upon Martek's ability to maintain the necessary production redundancies through continuing access to certain key processes at the Winchester facility and/or arrangements with contract manufacturers.

"These actions are essential to Martek becoming a stronger and more efficient company that is better able to serve its customers, execute on its growth strategies, and create shareholder value," said Steve Dubin, CEO of Martek Biosciences Corp. "I continue to be encouraged by the demand for Martek's products as our base infant formula business is expected to post solid growth this year, our non-infant formula DHA business is growing rapidly, and our Amerifit division continues to perform well."