The business week in Switzerland

Gold no more? Lego loses out as nearly 400 workers are laid off Keystone Archive

The past week was marked by bad news for workers at Lego's plants in canton Zug and less than impressive results from the pharmaceuticals giant, Roche.

Almost 400 workers are to lose their jobs following Thursday’s announcement that Europe’s largest toy-maker, Lego, is to close its two factories in Baar.

Management blamed the failure of a recent reorganisation to boost sales and strong competition from companies making more modern toys and games. Swiss Lego production is to be concentrated in the future in Willisau in canton Lucerne.

The pharmaceuticals and diagnostics company, Roche, released a mixed set of financial results this week for last year. Although net profit was up 50 per cent at SFr8.6 billion ($5.13 billion), sales showed a much more modest rise.

The vast rise in net profit is largely down to one off deals such as the sale of the company’s stake in the United States, biotechnology firm Genentech. That earned the Basel-based group SFr2.5 billion.

Net profit on an adjusted basis was up just 14 per cent to around SFr5 billion which was just about in line with analysts’ expectations.

Extraordinary income actually helped mask a rather poor sales performance. Sales rose eight per cent to SFr27.5 billion, which translated into a meagre one per cent increase in local currencies.

In other news this week, the healthcare giant, Novartis opened the world’s largest single research centre into respiratory problems. The centre, located in Horsham, England, cost SFr100 million. It will house around 180 scientists and 20 support staff.

This week also saw the creation of a giant property firm from the merger of Feldschlösschen-Hurlimann and Swiss Prime Site.

In a joint statement on Monday, the two companies said the merged enterprise would have a real estate portfolio of about SFr1.8 billion and a market capitalisation of about the same amount.

In other property news, the country’s largest telecommunications company, Swisscom, announced on Friday that it was selling 28 properties to a consortium led by Credit Suisse Asset Management in a deal worth more than SFr1.2 billion.

The company wants to concentrate on its core activities and is negotiating the sale of a further 162 sites.

There was good news for most workers at the rail technology group, ADtranz. Fifteen months after it announced the closure of its sites in Zurich and Pratteln in canton Basel, the company said this week that most jobs have been saved.

Some 585 employees out of 714 have now found new positions. Many are to be taken on by the new company taking over ADtranz contracts.

High-tech banking took a knock this week, when the private bank, Vontobel, abandoned plans to launch a separate venture for e-banking. Vontobel said the project had become too costly.

And finally, Zurich airport announced that it had boosted turnover by almost 10 per cent to SFr523 million last year as passenger volume climbed 8.4 per cent to 22.7 million.

Revenue from non-aviation sources such as advertising and duty free sales overtook aviation earnings for the first time.

by Michael Hollingdale